Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
At our phone lines. They are open to you right
now if you have questions for our retirement planning professionals
from Class Financial. Telpe number to get on the air
this morning six oh eight three two one thirteen ten.
That's six oh eight three two one thirteen ten gets
you on the air with Eric Schwartz and Kyle Kite
of Coloss Financial.
Speaker 2 (00:18):
Don't forget.
Speaker 1 (00:18):
You can learn more about Class Financial on their website
Class financial dot com. That's Closs k l aas Financial
dot com. Teleph number for the office right here in Madison,
six oh eight four four two five six three seven.
Don't forget. No charge for that initial get to know
your appointment tech Loss Financial. It will be complimentary to you.
And again they're telephone number six oh eight four four
two five six three seven as mentioned, joined this morning
(00:41):
by Eric Schwartz and Kyle Kite. Eric, how you doing
this morning?
Speaker 3 (00:45):
I am doing great. Sean, how are you doing this week?
Speaker 1 (00:47):
I'm doing fantastic.
Speaker 2 (00:48):
Great to talk with you and Kyle. How have you been.
Speaker 1 (00:50):
It's been a little while.
Speaker 2 (00:52):
It has been John, Yes, I'm doing well. Good to
catch up with you again.
Speaker 1 (00:55):
I was on the I was at Class Class Financial
dot com this morning and I was reading your bio
and I noticed you have an interest in cruising Route
sixty six on a motorcycle.
Speaker 2 (01:05):
It is it's one of those bucket list items that
I'm going to do eventually.
Speaker 3 (01:08):
Here.
Speaker 2 (01:09):
I just bought myself another motorcycle last year, so we'll
get it planned one of these days.
Speaker 1 (01:12):
That's I've taken I forty from Illinois to California, which
kind of a lot of it kind of goes over
that Root sixty six. But that's yeah, that's gonna be
a great It's gonna be a lot of fun. As
we talked this morning with Kyle and Eric, we're going
to talk speaking of retirement and free time and being
able to do those things. We're gonna be talking this
week about estate planning and you know, one of those
(01:34):
topics that it's a necessary topic for sure, and we're
going to get into it. It's gonna be a lot
of great information. Had a chance to kind of go
over the notes before the show, and it's it's pretty
good and important stuff. You want to pay close attention
to the program for a couple of reasons. One get
some great information, some great conversation. Also coming up a
little bit later in the show, we're gonna have your
chance to win a great prize from our friends at
Class Financial with the class Quiz question of the week.
(01:57):
I would give you a little tip listen closely. Oftentimes
supposed to quite answer to the class quiz question, leak
come up during the program, So again it beys, it's
a great benefit to not listen just for the information,
but also for an opportunity to win this week's prize,
which is a twenty five dollars gift card to Starbucks.
Speaker 2 (02:13):
So listen closely.
Speaker 1 (02:14):
And before we get to this week's topic, let's actually
rewind to last week's show and talk about the question
and answer there.
Speaker 2 (02:22):
Absolutely so.
Speaker 3 (02:22):
Our winner last week was Alisha from Verona, and the
question was true or false? Traditional defined benefit pension plans
have become significantly less common due to their complexity and
their cost. And the answer to that, Sean was true.
Speaker 1 (02:37):
And that was a great show speaking of things that
are true? Was it a great show? That is a
true statement as well? You can listen back at clausfinancial
dot com. Of course, subscribe to the podcast sign up
as well for the meat weekly Market Pulse newsletter. I
was a fantastic show, and this week we got a
great show as well. We're going to be tackling a
state planning. Of course, the topic, then, let's be honest,
(02:59):
is it's a very necessary, very important conversation, but a
lot of folks try to kind of avoid that topic.
Speaker 2 (03:05):
We don't like to think about it.
Speaker 1 (03:06):
But let's talk about then, why it's so critical in
your work when it comes to financial and retirement planning.
Speaker 2 (03:12):
Kyle, Yeah, great question, Sean. It is. It's not fun
obviously to talk about this, but obviously it's very very important,
you know, and we see ourselves as your financial quarterback
in coach, so we want to help you put the
work with a bunch of different professionals to make sure
that everything makes sense and that the whole plan works together.
And let's be honest to state planning is often one
(03:32):
of the weaker links just because if you do set
it up, you usually don't check it again for a
long time because again, it's not the most fun topic.
So but before we get rolling today, just remember that
we're not lawyers with them. So all this stuff we're
going to talk about today, try and give you some
good information, but always be sure to seek out advice
from your own attorney. And you know, when it comes
to a state planning, you know, life happens, we like
(03:53):
to say, and it throws you some curveballs. And estate
planning is all about being prepared. So we're going to
cover a lot of different things today, but some of
the most common ones or your wills, your trusts, powers
of attorney, and then healthcare directives. So all of these
things that we're going to cover are about making sure
that your wishes are on ORed no matter what happens.
And you know, like I mentioned before, a lot of people,
we hear it so many times. They finally get that
(04:14):
will set up when the kids are born, and then
they don't touch it for thirty plus years. Right, So
that's not a good idea either. So we do believe
in regular checkups. Just like your financial plan that you'd
work with an advisor on, your state plan needs to
evolve with your life. A good advisor helps you keep
everything aligned. So we hear this all the time. Like
I said, set it up when the kids are born,
or you know, they didn't change it when they've had
(04:35):
you know, maybe it's grandkids time and they've had a
grandkids and all that kind of stuff. So it's definitely
something that you want to continue to double check on,
so in a reality check. And this is a real
recent survey here, So for March twenty twenty four, Survey
and Financial Advisor magazine found that only twenty six percent
of Americans have estate plans. That number jumps to fifty
(04:55):
percent for people with over five hundred thousand dollars in assets.
And another surprise, thirty two percent of men have estate plans,
but only twenty three percent of women do. So I
know that I would not have guessed that men are
better at this than women do well, for sure, that's
the first it is. Yeah, and obviously this is super
timely because we're we're in the midst of the biggest
wealth transfer in history. There's eighty four trillion dollars that's
(05:19):
moving from the baby boomer generation to the Gen X
and millennials. So how much of that goes to your
loved ones versus the lawyers and the courts depends on
your planning. And without a plan, you could lose you know,
three to eight percent just due to unnecessary costs and
probate fees and all that, which we'll talk about here.
In a minute.
Speaker 1 (05:37):
Really great layout this morning from Kyle Kite, of course,
joined by Kyle Kite and Eric Schwartz. They are our
retirement planning professionals from Class Financial the website class financial
dot com. That's cost klaas Financial dot com. That's open
number six So eight four four two, five, six three seven.
So Eric, why do you so few people have a will?
Why do they skip having that will? And let's talk
(05:57):
about the importance of power of attorney documents.
Speaker 3 (06:00):
Yeah, this is a topic, and I think Kyle would
agree that we spend a lot of time talking to
our clients about And I always joke with clients that
when I tell them, hey, it's time to either get
an a state plan in place or review your state plan,
it generally is about five years before they actually do it,
and you know, it's just me telling them frequently over
that time. But I think the reasons here are pretty simple.
(06:24):
I mean, death is uncomfortable, nobody likes thinking about it.
It's easy to just put it off and procrastinate, say
I'll get to it later. I don't know where to start,
I don't have enough stuff to worry about, I don't
need an estate plan, or I don't know how to
do it. I don't know how to make a will.
It's too expensive. So these are all really common refrains
that we hear from folks.
Speaker 2 (06:45):
But here's the kicker.
Speaker 3 (06:45):
Estate planning isn't just about what happens when you're not
here anymore, because we often hear people say, well, my
kids will have to deal with that. I guess, but
it can impact you while you're still here. So power
of attorney documents, as you mentioned, they're vital while you're
still here. Think of it as choosing someone you trust
to make decisions for you. If you can't make decisions.
(07:06):
You can have a medical power of attorney which handles
your healthcare and you're in decisions around that. And then
you also have a financial power of attorney so they
handle your money. You can have one person that does
both of these things, or you can split it up.
I would say that's pretty common to split it up,
but you can choose, and remember that beneficiaries only get
(07:29):
involved after your death. Okay, so powers of attorney they're
handling things while you're still here and typically when you
can't make your own decisions. So which is more likely
incapacitation or early death right. In either case, you need
to have a plan in place.
Speaker 1 (07:46):
Really and it's pretty eye opening as well. As we
talked this morning with Eric Schwartz and Kyle Kite, they
are retirement planning professionals from Class Financial. You learn more
online Class Financial dot com. That's css k l aa
S financial dot com. They're telephon number six oh eight
four four two five six three seven again that's six
oh eight four four two five six three seven no
(08:08):
charge for the financial gets to know your appointment at
Class Financial. It will be complementary to you. We're going
to continue our conversation with Eric and Kyle. We're going
to talk a bit more about about things like probate,
what exactly is probate and I some people probably had
a little shutter like we'll talk about what it is
and UH and what you need to know there. We'll
get all the details next as Money in Motion with
(08:28):
COSS Financial continues right here on thirteen ten wib I
from Class Financial, Eric Schwartz and Kyle Kite. You can
learn more about Claus Financial colss financial dot com. That's
COSS k l a A S Financial dot com. You
can learn more about the team at Coss Financial. You
can also learn about their separate divisions, how they can
help you or if you're an employer, what they can
do for you of course, and also a great opportunity
(08:49):
there to sign up for the weekly Market Pulse newsletter.
It's a weekly news letter that you get in your
email inbox. Got a snapshot of the most recent market
news as well as a link to the most recent
podcasting and that available to you at cossfinancial dot com.
This week, we are talking about estate planning and I
mentioned that word probate. Does everyone need a will? And
(09:10):
what is this probate thing that we often hear about?
Speaker 2 (09:13):
Yeah, great question, Sean, Yeah, in a you know, in
the real world here, pretty much everybody needs a will.
And I say pretty much, but I really mean everyone,
because if you don't have a will and estate plan
set up, the state that you pass away in definitely
has one for you, and it might not be what
you would what you would want with your assets here.
So and people think that this is that a state
(09:34):
planning and all these things that we're talking about are
only for the super rich or only about wills and trusts,
and that's that's a myth. So almost everybody has something
of value, right You've got maybe a jewelry collection, or
you've got an airloom, piece of furniture, cars, all this
kind of stuff. So wills and trust kind of deal
with all of these different assets that people. And because
everybody has something of value, you need a plan for
(09:57):
how it's distributed. And as I mentioned, if you don't,
I don't have a play in the state does and
it's probably not what you want. So let's talk a
little bit about will versus a trust because we're going
over a lot of different topics here today. So will's
kick in after death, which means, you know, while you're living,
obviously you control everything. Will's just kicking after death. But
trust can kick in as soon as they're created, so
(10:18):
you can have a trust actually own assets like bank
accounts or homes that kind of stuff. And trust can
also help you avoid probate. And we're going to dig
into trust a lot deeper here in a couple of minutes,
but probate itself proving your will and settling your estate,
and it can be costly and time consuming. So the
number one thing, and this is why anytime we're talking
(10:40):
about you know, we talk a lot about four one
ks and investments is that you name beneficiaries on those
accounts on your bank accounts. Naming beneficiaries on accounts will
bypass probate. Having a trust can also bypass probate as well.
And why do we want to avoid probate Because it's
a costly, time consuming process. So it can take months
(11:00):
or even years to go through their probate process, and
attorney fees obviously come into play with this. And then
in Wisconsin aspect, four to five percent of your issues
for probate and about half of that it's going to
the attorney fees. So this is why beneficiary designations are
so important. And beneficiary designations on your investment accounts often
(11:22):
override your will or trust, so double check to make
sure they line up with the directions that you wish
to have happened with your assets. So this is an
extreme example, but we've heard about it before. We've probably
been mentioned it on this this call, before this radio show.
Before is that you know, we've had that worst case
scenario where you know, you go through a divorce but
you never change your beneficiary of your four O one
(11:43):
K at work from your ex spouse and one of
your passes away and that xpouse ends up getting that
money because it doesn't matter what your will, it's going
to go based on that beneficiary designation.
Speaker 1 (11:52):
So really important conversation to have and a really important
reminder to keep things updated. As we talked this morning
with Eric Schwartz Kyle Kite, our retirement planning professionals from
Class FINANCEEL So, Eric, you know, how often should we
then be updating our estate plans?
Speaker 3 (12:10):
Great question, and I think you can imagine if it's
hard enough to get people to do their initial estate plan,
it's not very easy to get them to go back
and update it. But the same reasons that that people
put off putting a state plan together in the first
place tend to be this the same reasons people don't
update them regularly. So most most attorneys that I work
(12:32):
with here locally, and I've I've asked this question of
they'll say, you know, you should review your state plan
at least every five years or after major life events,
right birth of a child, death of a family member, divorced,
as Kyle was saying, any kind of health changes. Right,
these are these are generally red flags for all Right,
(12:54):
I better, I better go back and make sure that
that my wishes are still being carried out as I
intended that too, And don't forget to check how your
assets are titled. Okay, So getting the documents put in
place is and drawn up that is one step. But
actually implementing those so retitling your home or your investment
account or updating your beneficiaries, they need to match your
(13:18):
wishes as well. You can't just put the documents together.
Speaker 1 (13:21):
That's important, important nuance there for sure. From Eric Schwartz
of course, joined this morning by Eric Schwartz and Kyle
Kite from Class Financial. So Kyle, how often then excuse
me until I touched on that. We got to talk
though about the wills and trucks trust and kind of
get a little deeper on that. So why should somebody
consider a trust as part of their estate plan? And
you think about you know, that being an option. Sometimes
(13:44):
it's not always the best option. Let's talk about some
of the nuances there, Kyle.
Speaker 2 (13:49):
And you know, this is a really really good question
because in all honesty, like we say, in a perfect world,
everybody would have a trust just because it gives you
the most control over how you want your stuff distributed.
If something order to happen to you, but realistically not
everybody needs one. So the first thing that you would
need to trust for is to avoid probate. So as
we mentioned, trust can often bypass the probate process. This
(14:12):
saves time, money, and can keep your state private. Probate
to public process, and trusts are generally outside of the
court system, meaning if you just have a will, it's
actually public records, so somebody can go in there and
look in and see how your stuff got divvied up. In
that kind of stuff. This is especially full of different
situations where I say a trust is basically a non
(14:34):
negotiable that everybody should have one. If you have homes
in multiple states or property in multiple states, you should
definitely probably have a trust set up just because you
would go through probate in multiple states because you own
property in multiple states if this isn't one of them,
and then control over asset distribution. So trust allow you
to specify exactly how and when your assets are distributed
(14:56):
to your beneficiaries. You can set conditions such as you know,
distributing at certain ages or for specific purposes like cars
or education, that kind of stuff. And it's especially useful
for beneficiary to be responsible or if you want to
protect assets for future generation. So think of this as
anytime that money is going to do more harm than
good to the people receiving it, you probably want to
(15:19):
put a trust in place so that you can again
have it distributed out to them on in a reasonable manner.
Another one is managing assets during incapacity. So if you
become incapacitated, a trust allows your trustee to manage those
assets without court intervention. And this is a big advantage
over a will, which only comes into effect after death.
(15:39):
So again think of this as also like the power
of attorney would do something similar, but this allows a
trust see to step in and not just a power
of attorney. And then tax planning, so certain types of
trust can help minimize the state taxes. This is particularly
relevant for those with larger estates or maybe really complex
estates and things like that. And then another big one
(16:00):
is protecting assets from creditors. So in some cases trust
can provide a layer of protection against creditors, shielding assets
from potential law. So this works for you, know, if
you were to leave your money to your kids, and
your kids inherit this money and they put it in
like a joint account with their spouse, and then their
spouse says, oh, but we just got a big dump
(16:20):
of money in our checking account. Now I want a divorce. Well,
if that money is co mingled, that can be a
marital asset, which that spouse could obviously, you know, take
half and run or something like that. So it protects
from future x spouses as well as creditors. And the
final one in this one is another big one too,
is special needs planning. So a special needs trust can
provide for a beneficiary with disabilities without jeopardizing the eligibility
(16:43):
for government benefits. So again that's another situation where if
you have a child with special needs or a grandchild
with special needs, a trust is going to be something
that you absolutely want to get set up for that situation.
Speaker 1 (16:55):
You know, it's interestings. We talk on this show, you know,
each week, and sometimes you think, you know, it's it's
very this stuff is very specific. And as as Kyle,
as you're kind of working through some of these, some
of these bullet points, you're thinking, yeah, those are all
very very unique situations, things that can interact with other
assets and other facets of your life. It's really important
(17:16):
to have this conversation and to be doing this kind
of work again, it's really really an important conversation, which
is of course talking about a state planning as we
chat with our retirement planning professionals, Eric Schwartz and Kyle Kite.
Of course, Eric and Kyle, they come to us from
Class Financial their website Closs financial dot com. That's Coss
k l aasfinancial dot com. To tell forh number six
(17:37):
oh eight four four two five six three seven. No
charge for that initial get to know you appointment tech
Loss Financial. It will be complementary to you again their
number six oh eight four four two five six three seven.
We'll talk about when a trust may not be the
best option. Whilst our Closs Quiz question of the week
that so much more. Next as Money in Motion with
Coss Financial continues right here on thirteen ten WIBI This
(18:00):
Morning with Eric Schwartz and Kyle Kite, both of them
they are our retirement planning professionals from Class Financial. Don't
forget if you missed any part of today's program. You
want to listen back to the show, you want to
share the show or get caught up on previous programs.
You can, of course subscribe to the podcast right online
Cossfinancial dot com. That's Coss k l aa S financial
dot com. You can also learn more about the staff
(18:21):
and the team at COSS Financial. I can learn about
separate divisions at COSS Financial, as well as sign up
for the weekly Market Pulse newsletter. That all available to
you at cossfinancial dot com. That's Coss k l aa
S Financial dot com. Delphy number six oh eight four
four two five, six three seven. No charge for that
initial get to know you appointment at COSS Financial. It
will be complimentary to you again in the office right
(18:43):
here in Madison six oh eight four four two five
six three seven. Talking this week about estate planning, and
we've left off talking about why a trust may be
something that you should be using. There's also some situations
where a trust might not be the best options. Tell
us about that, Eric Hoop, do we have Eric?
Speaker 3 (19:02):
Oh?
Speaker 1 (19:02):
There we go, Eric, Sorry about that.
Speaker 2 (19:03):
We miss part of you here.
Speaker 1 (19:05):
Yep, you're back.
Speaker 3 (19:05):
Welcome to the show, all right, Guy, glad to be here. Yeah,
So there's definitely some reasons you might want to think
about not going the trust route. You know, it's not
not the right fit for absolutely everybody. One reason is
is just simply the cost. So setting up a trust
is generally more expensive, and it's it's more complex too
(19:26):
than just creating a general will, and there's there can
be ongoing administrative costs associated with maintaining the trust. So
that would be one one kind of roadblock to going
going this route. And if you have a simpler estate
your state, maybe it's relatively small and straightforward, you may
be you may be just fine with the will. So
if all your assets have beneficiary designations, I think like
(19:49):
life insurance for one k's I RAS, those those beneficiary
designations are are going to be sufficient to actually transition
your your assets. And you may not need to have
an additional trust over the top of the will asset titling.
So to fully benefit from a trust, you need to
retitle your assets into the trust's name. This can be
(20:12):
a time consuming process and sometimes gets overlooked. I was
kind of alluding to this earlier. You'd be surprised how
many times folks will will say, hey, I finally did
my estate plan after all these years, and they come in,
I said, great, how do you retitle the house? Well, no,
do you update the beneficiaries not yet like Okay, we're
way there, We're have way there. The ongoing administration. So trusts,
(20:37):
depending on what type they are, they can require ongoing
administration like filing tax returns, maintaining accurate records. The flexibility.
While while trusts offer a lot of control, they can
be less flexible than a will, And once a trust
is established, it can be more difficult to actually make
changes and more expensive. And finally, because laws trust laws
(21:01):
vary from state to state, it's really crucial that you
work with an attorney who is familiar with your state laws,
so that can you know that can introduce some additional
costs and ongoing maintenance as well, So those would be
maybe some of the roadblocks to establishing a trust and
using it in your state plan. But the last piece
I want to cover here is if you do go
(21:23):
to the trust route, it's important to understand the difference
between a revocable and an irrevocable trust. So a revocable
trust can be changed or as its name suggests, revoked
anytime during your lifetime. On the other hand, an irrevocable
trust cannot. It's it's much less flexible. Each type has
(21:44):
its own advantages and disadvantages. Revocable trusts are very common
and are used to avoid probate. They also allow for
management of assets if you're incapacitated. On the other hand,
irrevocable trusts are often used for tax planning or asset
protection purposes, like protecting your assets from nursing home costs.
Speaker 2 (22:05):
For example.
Speaker 3 (22:06):
So there's a lot of a lot of complexity here,
and like Kyle said earlier, we are we are not attorneys.
We just happen to work with them a lot. So
it's it's essential to work with an experience the state
planning attorney to determine whether a trust is the right
fit for you in your situation and is sure that
you're actually putting that together correctly.
Speaker 1 (22:26):
Really impactful stuff this week as we talk with our
retirement planning professionals, of course, Eric Schwartz and Kyle Kite.
They come to us from Class Financial the website COSS
that's Colssfinancial dot com, k l aa S Financial dot com.
Great website. To learn more about the teams set up
for the weekly Market Pulse newsletter. Listen back to this
previous shows podcast. There's just so much stuff at Cossfinancial
(22:46):
dot com. You definitely want to check them out online again,
it's Coss Financial dot com Delphy number six oh eight
four four two five six three seven. No charge for
that initial get you to know you appointment at Coss Financial.
It will be complimentary to you again their number six
oh eight four four two five six three seven. You
want to hold on to that telephone number now as well,
because it's time for the Coss Quiz Question of the Week.
Speaker 2 (23:07):
It works like this.
Speaker 1 (23:07):
In just a moment, I'll ask you the Class Quiz
question of the week. We'll then have thirty minutes from
the end today's program to call the Class Financial office
right here in Madison at six oh eight four four
two five six three seven. If you are the first
car correct answer, you win this week's prize, which is
a twenty five dollars gift card to Starbucks. This week's
Coss Quiz question the week Is this true or false?
Your beneficiary designations on your investment accounts will often over
(23:32):
ride your will or trust. Is that true or is
that false? Telephone number six oh eight four four two
five six three seven, first Corot correct answer when that's
twenty five dollars gift card Starbucks and again that's COSS
Financials office right here in Madison. That number six oh
eight four four two five six three seven. Eric Kyle,
It's always great chatting with you, always very informative. You guys,
(23:53):
enjoy this beautiful Dan and we'll talk real soon. Yeah,
thanks Sean, see you guys. Doctor Marty Greer, she joins us.
Next talk about what kind of we're going to look
behind the scenes of what goes on in a vet clinic,
what it takes to become a veterinarian or a vet
tech or work in a veterinary clinic. We're to talk
with doctor Grew about that next. Right here on thirteen ten,
Wiba
At our phone lines. They are open to you right
now if you have questions for our retirement planning professionals
from Class Financial. Telpe number to get on the air
this morning six oh eight three two one thirteen ten.
That's six oh eight three two one thirteen ten gets
you on the air with Eric Schwartz and Kyle Kite
of Coloss Financial.
Speaker 2 (00:18):
Don't forget.
Speaker 1 (00:18):
You can learn more about Class Financial on their website
Class financial dot com. That's Closs k l aas Financial
dot com. Teleph number for the office right here in Madison,
six oh eight four four two five six three seven.
Don't forget. No charge for that initial get to know
your appointment tech Loss Financial. It will be complimentary to you.
And again they're telephone number six oh eight four four
two five six three seven as mentioned, joined this morning
(00:41):
by Eric Schwartz and Kyle Kite. Eric, how you doing
this morning?
Speaker 3 (00:45):
I am doing great. Sean, how are you doing this week?
Speaker 1 (00:47):
I'm doing fantastic.
Speaker 2 (00:48):
Great to talk with you and Kyle. How have you been.
Speaker 1 (00:50):
It's been a little while.
Speaker 2 (00:52):
It has been John, Yes, I'm doing well. Good to
catch up with you again.
Speaker 1 (00:55):
I was on the I was at Class Class Financial
dot com this morning and I was reading your bio
and I noticed you have an interest in cruising Route
sixty six on a motorcycle.
Speaker 2 (01:05):
It is it's one of those bucket list items that
I'm going to do eventually.
Speaker 3 (01:08):
Here.
Speaker 2 (01:09):
I just bought myself another motorcycle last year, so we'll
get it planned one of these days.
Speaker 1 (01:12):
That's I've taken I forty from Illinois to California, which
kind of a lot of it kind of goes over
that Root sixty six. But that's yeah, that's gonna be
a great It's gonna be a lot of fun. As
we talked this morning with Kyle and Eric, we're going
to talk speaking of retirement and free time and being
able to do those things. We're gonna be talking this
week about estate planning and you know, one of those
(01:34):
topics that it's a necessary topic for sure, and we're
going to get into it. It's gonna be a lot
of great information. Had a chance to kind of go
over the notes before the show, and it's it's pretty
good and important stuff. You want to pay close attention
to the program for a couple of reasons. One get
some great information, some great conversation. Also coming up a
little bit later in the show, we're gonna have your
chance to win a great prize from our friends at
Class Financial with the class Quiz question of the week.
(01:57):
I would give you a little tip listen closely. Oftentimes
supposed to quite answer to the class quiz question, leak
come up during the program, So again it beys, it's
a great benefit to not listen just for the information,
but also for an opportunity to win this week's prize,
which is a twenty five dollars gift card to Starbucks.
Speaker 2 (02:13):
So listen closely.
Speaker 1 (02:14):
And before we get to this week's topic, let's actually
rewind to last week's show and talk about the question
and answer there.
Speaker 2 (02:22):
Absolutely so.
Speaker 3 (02:22):
Our winner last week was Alisha from Verona, and the
question was true or false? Traditional defined benefit pension plans
have become significantly less common due to their complexity and
their cost. And the answer to that, Sean was true.
Speaker 1 (02:37):
And that was a great show speaking of things that
are true? Was it a great show? That is a
true statement as well? You can listen back at clausfinancial
dot com. Of course, subscribe to the podcast sign up
as well for the meat weekly Market Pulse newsletter. I
was a fantastic show, and this week we got a
great show as well. We're going to be tackling a
state planning. Of course, the topic, then, let's be honest,
(02:59):
is it's a very necessary, very important conversation, but a
lot of folks try to kind of avoid that topic.
Speaker 2 (03:05):
We don't like to think about it.
Speaker 1 (03:06):
But let's talk about then, why it's so critical in
your work when it comes to financial and retirement planning.
Speaker 2 (03:12):
Kyle, Yeah, great question, Sean. It is. It's not fun
obviously to talk about this, but obviously it's very very important,
you know, and we see ourselves as your financial quarterback
in coach, so we want to help you put the
work with a bunch of different professionals to make sure
that everything makes sense and that the whole plan works together.
And let's be honest to state planning is often one
(03:32):
of the weaker links just because if you do set
it up, you usually don't check it again for a
long time because again, it's not the most fun topic.
So but before we get rolling today, just remember that
we're not lawyers with them. So all this stuff we're
going to talk about today, try and give you some
good information, but always be sure to seek out advice
from your own attorney. And you know, when it comes
to a state planning, you know, life happens, we like
(03:53):
to say, and it throws you some curveballs. And estate
planning is all about being prepared. So we're going to
cover a lot of different things today, but some of
the most common ones or your wills, your trusts, powers
of attorney, and then healthcare directives. So all of these
things that we're going to cover are about making sure
that your wishes are on ORed no matter what happens.
And you know, like I mentioned before, a lot of people,
we hear it so many times. They finally get that
(04:14):
will set up when the kids are born, and then
they don't touch it for thirty plus years. Right, So
that's not a good idea either. So we do believe
in regular checkups. Just like your financial plan that you'd
work with an advisor on, your state plan needs to
evolve with your life. A good advisor helps you keep
everything aligned. So we hear this all the time. Like
I said, set it up when the kids are born,
or you know, they didn't change it when they've had
(04:35):
you know, maybe it's grandkids time and they've had a
grandkids and all that kind of stuff. So it's definitely
something that you want to continue to double check on,
so in a reality check. And this is a real
recent survey here, So for March twenty twenty four, Survey
and Financial Advisor magazine found that only twenty six percent
of Americans have estate plans. That number jumps to fifty
(04:55):
percent for people with over five hundred thousand dollars in assets.
And another surprise, thirty two percent of men have estate plans,
but only twenty three percent of women do. So I
know that I would not have guessed that men are
better at this than women do well, for sure, that's
the first it is. Yeah, and obviously this is super
timely because we're we're in the midst of the biggest
wealth transfer in history. There's eighty four trillion dollars that's
(05:19):
moving from the baby boomer generation to the Gen X
and millennials. So how much of that goes to your
loved ones versus the lawyers and the courts depends on
your planning. And without a plan, you could lose you know,
three to eight percent just due to unnecessary costs and
probate fees and all that, which we'll talk about here.
In a minute.
Speaker 1 (05:37):
Really great layout this morning from Kyle Kite, of course,
joined by Kyle Kite and Eric Schwartz. They are our
retirement planning professionals from Class Financial the website class financial
dot com. That's cost klaas Financial dot com. That's open
number six So eight four four two, five, six three seven.
So Eric, why do you so few people have a will?
Why do they skip having that will? And let's talk
(05:57):
about the importance of power of attorney documents.
Speaker 3 (06:00):
Yeah, this is a topic, and I think Kyle would
agree that we spend a lot of time talking to
our clients about And I always joke with clients that
when I tell them, hey, it's time to either get
an a state plan in place or review your state plan,
it generally is about five years before they actually do it,
and you know, it's just me telling them frequently over
that time. But I think the reasons here are pretty simple.
(06:24):
I mean, death is uncomfortable, nobody likes thinking about it.
It's easy to just put it off and procrastinate, say
I'll get to it later. I don't know where to start,
I don't have enough stuff to worry about, I don't
need an estate plan, or I don't know how to
do it. I don't know how to make a will.
It's too expensive. So these are all really common refrains
that we hear from folks.
Speaker 2 (06:45):
But here's the kicker.
Speaker 3 (06:45):
Estate planning isn't just about what happens when you're not
here anymore, because we often hear people say, well, my
kids will have to deal with that. I guess, but
it can impact you while you're still here. So power
of attorney documents, as you mentioned, they're vital while you're
still here. Think of it as choosing someone you trust
to make decisions for you. If you can't make decisions.
(07:06):
You can have a medical power of attorney which handles
your healthcare and you're in decisions around that. And then
you also have a financial power of attorney so they
handle your money. You can have one person that does
both of these things, or you can split it up.
I would say that's pretty common to split it up,
but you can choose, and remember that beneficiaries only get
(07:29):
involved after your death. Okay, so powers of attorney they're
handling things while you're still here and typically when you
can't make your own decisions. So which is more likely
incapacitation or early death right. In either case, you need
to have a plan in place.
Speaker 1 (07:46):
Really and it's pretty eye opening as well. As we
talked this morning with Eric Schwartz and Kyle Kite, they
are retirement planning professionals from Class Financial. You learn more
online Class Financial dot com. That's css k l aa
S financial dot com. They're telephon number six oh eight
four four two five six three seven again that's six
oh eight four four two five six three seven no
(08:08):
charge for the financial gets to know your appointment at
Class Financial. It will be complementary to you. We're going
to continue our conversation with Eric and Kyle. We're going
to talk a bit more about about things like probate,
what exactly is probate and I some people probably had
a little shutter like we'll talk about what it is
and UH and what you need to know there. We'll
get all the details next as Money in Motion with
(08:28):
COSS Financial continues right here on thirteen ten wib I
from Class Financial, Eric Schwartz and Kyle Kite. You can
learn more about Claus Financial colss financial dot com. That's
COSS k l a A S Financial dot com. You
can learn more about the team at Coss Financial. You
can also learn about their separate divisions, how they can
help you or if you're an employer, what they can
do for you of course, and also a great opportunity
(08:49):
there to sign up for the weekly Market Pulse newsletter.
It's a weekly news letter that you get in your
email inbox. Got a snapshot of the most recent market
news as well as a link to the most recent
podcasting and that available to you at cossfinancial dot com.
This week, we are talking about estate planning and I
mentioned that word probate. Does everyone need a will? And
(09:10):
what is this probate thing that we often hear about?
Speaker 2 (09:13):
Yeah, great question, Sean, Yeah, in a you know, in
the real world here, pretty much everybody needs a will.
And I say pretty much, but I really mean everyone,
because if you don't have a will and estate plan
set up, the state that you pass away in definitely
has one for you, and it might not be what
you would what you would want with your assets here.
So and people think that this is that a state
(09:34):
planning and all these things that we're talking about are
only for the super rich or only about wills and trusts,
and that's that's a myth. So almost everybody has something
of value, right You've got maybe a jewelry collection, or
you've got an airloom, piece of furniture, cars, all this
kind of stuff. So wills and trust kind of deal
with all of these different assets that people. And because
everybody has something of value, you need a plan for
(09:57):
how it's distributed. And as I mentioned, if you don't,
I don't have a play in the state does and
it's probably not what you want. So let's talk a
little bit about will versus a trust because we're going
over a lot of different topics here today. So will's
kick in after death, which means, you know, while you're living,
obviously you control everything. Will's just kicking after death. But
trust can kick in as soon as they're created, so
(10:18):
you can have a trust actually own assets like bank
accounts or homes that kind of stuff. And trust can
also help you avoid probate. And we're going to dig
into trust a lot deeper here in a couple of minutes,
but probate itself proving your will and settling your estate,
and it can be costly and time consuming. So the
number one thing, and this is why anytime we're talking
(10:40):
about you know, we talk a lot about four one
ks and investments is that you name beneficiaries on those
accounts on your bank accounts. Naming beneficiaries on accounts will
bypass probate. Having a trust can also bypass probate as well.
And why do we want to avoid probate Because it's
a costly, time consuming process. So it can take months
(11:00):
or even years to go through their probate process, and
attorney fees obviously come into play with this. And then
in Wisconsin aspect, four to five percent of your issues
for probate and about half of that it's going to
the attorney fees. So this is why beneficiary designations are
so important. And beneficiary designations on your investment accounts often
(11:22):
override your will or trust, so double check to make
sure they line up with the directions that you wish
to have happened with your assets. So this is an
extreme example, but we've heard about it before. We've probably
been mentioned it on this this call, before this radio show.
Before is that you know, we've had that worst case
scenario where you know, you go through a divorce but
you never change your beneficiary of your four O one
(11:43):
K at work from your ex spouse and one of
your passes away and that xpouse ends up getting that
money because it doesn't matter what your will, it's going
to go based on that beneficiary designation.
Speaker 1 (11:52):
So really important conversation to have and a really important
reminder to keep things updated. As we talked this morning
with Eric Schwartz Kyle Kite, our retirement planning professionals from
Class FINANCEEL So, Eric, you know, how often should we
then be updating our estate plans?
Speaker 3 (12:10):
Great question, and I think you can imagine if it's
hard enough to get people to do their initial estate plan,
it's not very easy to get them to go back
and update it. But the same reasons that that people
put off putting a state plan together in the first
place tend to be this the same reasons people don't
update them regularly. So most most attorneys that I work
(12:32):
with here locally, and I've I've asked this question of
they'll say, you know, you should review your state plan
at least every five years or after major life events,
right birth of a child, death of a family member, divorced,
as Kyle was saying, any kind of health changes. Right,
these are these are generally red flags for all Right,
(12:54):
I better, I better go back and make sure that
that my wishes are still being carried out as I
intended that too, And don't forget to check how your
assets are titled. Okay, So getting the documents put in
place is and drawn up that is one step. But
actually implementing those so retitling your home or your investment
account or updating your beneficiaries, they need to match your
(13:18):
wishes as well. You can't just put the documents together.
Speaker 1 (13:21):
That's important, important nuance there for sure. From Eric Schwartz
of course, joined this morning by Eric Schwartz and Kyle
Kite from Class Financial. So Kyle, how often then excuse
me until I touched on that. We got to talk
though about the wills and trucks trust and kind of
get a little deeper on that. So why should somebody
consider a trust as part of their estate plan? And
you think about you know, that being an option. Sometimes
(13:44):
it's not always the best option. Let's talk about some
of the nuances there, Kyle.
Speaker 2 (13:49):
And you know, this is a really really good question
because in all honesty, like we say, in a perfect world,
everybody would have a trust just because it gives you
the most control over how you want your stuff distributed.
If something order to happen to you, but realistically not
everybody needs one. So the first thing that you would
need to trust for is to avoid probate. So as
we mentioned, trust can often bypass the probate process. This
(14:12):
saves time, money, and can keep your state private. Probate
to public process, and trusts are generally outside of the
court system, meaning if you just have a will, it's
actually public records, so somebody can go in there and
look in and see how your stuff got divvied up. In
that kind of stuff. This is especially full of different
situations where I say a trust is basically a non
(14:34):
negotiable that everybody should have one. If you have homes
in multiple states or property in multiple states, you should
definitely probably have a trust set up just because you
would go through probate in multiple states because you own
property in multiple states if this isn't one of them,
and then control over asset distribution. So trust allow you
to specify exactly how and when your assets are distributed
(14:56):
to your beneficiaries. You can set conditions such as you know,
distributing at certain ages or for specific purposes like cars
or education, that kind of stuff. And it's especially useful
for beneficiary to be responsible or if you want to
protect assets for future generation. So think of this as
anytime that money is going to do more harm than
good to the people receiving it, you probably want to
(15:19):
put a trust in place so that you can again
have it distributed out to them on in a reasonable manner.
Another one is managing assets during incapacity. So if you
become incapacitated, a trust allows your trustee to manage those
assets without court intervention. And this is a big advantage
over a will, which only comes into effect after death.
(15:39):
So again think of this as also like the power
of attorney would do something similar, but this allows a
trust see to step in and not just a power
of attorney. And then tax planning, so certain types of
trust can help minimize the state taxes. This is particularly
relevant for those with larger estates or maybe really complex
estates and things like that. And then another big one
(16:00):
is protecting assets from creditors. So in some cases trust
can provide a layer of protection against creditors, shielding assets
from potential law. So this works for you, know, if
you were to leave your money to your kids, and
your kids inherit this money and they put it in
like a joint account with their spouse, and then their
spouse says, oh, but we just got a big dump
(16:20):
of money in our checking account. Now I want a divorce. Well,
if that money is co mingled, that can be a
marital asset, which that spouse could obviously, you know, take
half and run or something like that. So it protects
from future x spouses as well as creditors. And the
final one in this one is another big one too,
is special needs planning. So a special needs trust can
provide for a beneficiary with disabilities without jeopardizing the eligibility
(16:43):
for government benefits. So again that's another situation where if
you have a child with special needs or a grandchild
with special needs, a trust is going to be something
that you absolutely want to get set up for that situation.
Speaker 1 (16:55):
You know, it's interestings. We talk on this show, you know,
each week, and sometimes you think, you know, it's it's
very this stuff is very specific. And as as Kyle,
as you're kind of working through some of these, some
of these bullet points, you're thinking, yeah, those are all
very very unique situations, things that can interact with other
assets and other facets of your life. It's really important
(17:16):
to have this conversation and to be doing this kind
of work again, it's really really an important conversation, which
is of course talking about a state planning as we
chat with our retirement planning professionals, Eric Schwartz and Kyle Kite.
Of course, Eric and Kyle, they come to us from
Class Financial their website Closs financial dot com. That's Coss
k l aasfinancial dot com. To tell forh number six
(17:37):
oh eight four four two five six three seven. No
charge for that initial get to know you appointment tech
Loss Financial. It will be complementary to you again their
number six oh eight four four two five six three seven.
We'll talk about when a trust may not be the
best option. Whilst our Closs Quiz question of the week
that so much more. Next as Money in Motion with
Coss Financial continues right here on thirteen ten WIBI This
(18:00):
Morning with Eric Schwartz and Kyle Kite, both of them
they are our retirement planning professionals from Class Financial. Don't
forget if you missed any part of today's program. You
want to listen back to the show, you want to
share the show or get caught up on previous programs.
You can, of course subscribe to the podcast right online
Cossfinancial dot com. That's Coss k l aa S financial
dot com. You can also learn more about the staff
(18:21):
and the team at COSS Financial. I can learn about
separate divisions at COSS Financial, as well as sign up
for the weekly Market Pulse newsletter. That all available to
you at cossfinancial dot com. That's Coss k l aa
S Financial dot com. Delphy number six oh eight four
four two five, six three seven. No charge for that
initial get to know you appointment at COSS Financial. It
will be complimentary to you again in the office right
(18:43):
here in Madison six oh eight four four two five
six three seven. Talking this week about estate planning, and
we've left off talking about why a trust may be
something that you should be using. There's also some situations
where a trust might not be the best options. Tell
us about that, Eric Hoop, do we have Eric?
Speaker 3 (19:02):
Oh?
Speaker 1 (19:02):
There we go, Eric, Sorry about that.
Speaker 2 (19:03):
We miss part of you here.
Speaker 1 (19:05):
Yep, you're back.
Speaker 3 (19:05):
Welcome to the show, all right, Guy, glad to be here. Yeah,
So there's definitely some reasons you might want to think
about not going the trust route. You know, it's not
not the right fit for absolutely everybody. One reason is
is just simply the cost. So setting up a trust
is generally more expensive, and it's it's more complex too
(19:26):
than just creating a general will, and there's there can
be ongoing administrative costs associated with maintaining the trust. So
that would be one one kind of roadblock to going
going this route. And if you have a simpler estate
your state, maybe it's relatively small and straightforward, you may
be you may be just fine with the will. So
if all your assets have beneficiary designations, I think like
(19:49):
life insurance for one k's I RAS, those those beneficiary
designations are are going to be sufficient to actually transition
your your assets. And you may not need to have
an additional trust over the top of the will asset titling.
So to fully benefit from a trust, you need to
retitle your assets into the trust's name. This can be
(20:12):
a time consuming process and sometimes gets overlooked. I was
kind of alluding to this earlier. You'd be surprised how
many times folks will will say, hey, I finally did
my estate plan after all these years, and they come in,
I said, great, how do you retitle the house? Well, no,
do you update the beneficiaries not yet like Okay, we're
way there, We're have way there. The ongoing administration. So trusts,
(20:37):
depending on what type they are, they can require ongoing
administration like filing tax returns, maintaining accurate records. The flexibility.
While while trusts offer a lot of control, they can
be less flexible than a will, And once a trust
is established, it can be more difficult to actually make
changes and more expensive. And finally, because laws trust laws
(21:01):
vary from state to state, it's really crucial that you
work with an attorney who is familiar with your state laws,
so that can you know that can introduce some additional
costs and ongoing maintenance as well, So those would be
maybe some of the roadblocks to establishing a trust and
using it in your state plan. But the last piece
I want to cover here is if you do go
(21:23):
to the trust route, it's important to understand the difference
between a revocable and an irrevocable trust. So a revocable
trust can be changed or as its name suggests, revoked
anytime during your lifetime. On the other hand, an irrevocable
trust cannot. It's it's much less flexible. Each type has
(21:44):
its own advantages and disadvantages. Revocable trusts are very common
and are used to avoid probate. They also allow for
management of assets if you're incapacitated. On the other hand,
irrevocable trusts are often used for tax planning or asset
protection purposes, like protecting your assets from nursing home costs.
Speaker 2 (22:05):
For example.
Speaker 3 (22:06):
So there's a lot of a lot of complexity here,
and like Kyle said earlier, we are we are not attorneys.
We just happen to work with them a lot. So
it's it's essential to work with an experience the state
planning attorney to determine whether a trust is the right
fit for you in your situation and is sure that
you're actually putting that together correctly.
Speaker 1 (22:26):
Really impactful stuff this week as we talk with our
retirement planning professionals, of course, Eric Schwartz and Kyle Kite.
They come to us from Class Financial the website COSS
that's Colssfinancial dot com, k l aa S Financial dot com.
Great website. To learn more about the teams set up
for the weekly Market Pulse newsletter. Listen back to this
previous shows podcast. There's just so much stuff at Cossfinancial
(22:46):
dot com. You definitely want to check them out online again,
it's Coss Financial dot com Delphy number six oh eight
four four two five six three seven. No charge for
that initial get you to know you appointment at Coss Financial.
It will be complimentary to you again their number six
oh eight four four two five six three seven. You
want to hold on to that telephone number now as well,
because it's time for the Coss Quiz Question of the Week.
Speaker 2 (23:07):
It works like this.
Speaker 1 (23:07):
In just a moment, I'll ask you the Class Quiz
question of the week. We'll then have thirty minutes from
the end today's program to call the Class Financial office
right here in Madison at six oh eight four four
two five six three seven. If you are the first
car correct answer, you win this week's prize, which is
a twenty five dollars gift card to Starbucks. This week's
Coss Quiz question the week Is this true or false?
Your beneficiary designations on your investment accounts will often over
(23:32):
ride your will or trust. Is that true or is
that false? Telephone number six oh eight four four two
five six three seven, first Corot correct answer when that's
twenty five dollars gift card Starbucks and again that's COSS
Financials office right here in Madison. That number six oh
eight four four two five six three seven. Eric Kyle,
It's always great chatting with you, always very informative. You guys,
(23:53):
enjoy this beautiful Dan and we'll talk real soon. Yeah,
thanks Sean, see you guys. Doctor Marty Greer, she joins us.
Next talk about what kind of we're going to look
behind the scenes of what goes on in a vet clinic,
what it takes to become a veterinarian or a vet
tech or work in a veterinary clinic. We're to talk
with doctor Grew about that next. Right here on thirteen ten,
Wiba
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