Ep 16 - Estate Planning Process - More Than A Transaction

Welcome to the Good Steward Law and Wealth Podcast, where host Ledly Jennings explores law and finance to help listeners become better stewards of their wealth. Each episode covers the latest trends and strategies in estate planning, elder law, investment, and wealth management. Tune in for the knowledge and tools for financial success and security.

Welcome back to the Good Steward Law and Wealth Podcast. I am your host, Ledly Jennings. And today I'm excited to talk about the relational aspect of estate planning and how the process is more than just a transaction. That's what I really want to convey today. Uh, this has been brought to light through several client interactions lately, and I've just realized that, uh, estate planning attorney and the relationship with the clients is more than just drafting documents. And it's a relationship that needs to be maintained is what, um, I've come to realize. So when I say estate plan, you know, most people think of one document. What is that document that you think of? I would bet that most people think a will. So if you think I have an estate plan, I have a will. But the fact is, if we are using your will or you leave an interaction with me and all you walk away with is a will, then I did not do my job of educating you on what you actually need. And you can listen to the other episodes where we talked about all the elements of an estate plan, but typically a will is not, you know, all you need within an estate plan. So clients come to me and think they, it's a transaction. They say, well, I need a will. I need you to draft it. Let's do that. Let's sign it and we're done. But that is not the most effective way because to have an effective estate plan, you need to see the full picture and understand what documents you need to prepare for any situation. So it's more than just a transaction. An estate plan is a relationship. Um, and the first part of that relationship is education. A big part of what I do is educating clients on what are the documents they may need. Um, what would help them in this situation? You know, I make clients aware of every option that's available to them so they know what they need and what would best suit their family and their situation. I'll give this example. Just last week, I had a client come in. They booked a meeting. They sat down. Uh, Um, they said, I need you to draft me a living will. I need a living will. And I said, well, I agree with you. You do need a living will, but I'm curious, what are your reasons behind why you think you need a living will? And the client goes on to say, well, I want to make sure my assets go to my kids when I pass away. And then I step back, uh, quiet for a little bit. And I say, well, I do agree with you that you need a living will. But that living will has nothing to do with your assets. A living will is a healthcare document. And then they're kind of taken back like, well, I thought a will, a living will, it said where my stuff goes. And I have to tell 'em, no, a living will is a healthcare document that lets someone make end of life decisions for you. Now, a last will and testament does say where your assets go after you're gone. And then they say, well, all right, that's what I need. That's what I meant. I need a last will and testament. And I'll say, yeah, you might need that. It could tell where your assets go. But is that the best way? Do you know what happens with a will? And then we go on to talk about all the things that happen with the will. You can listen to our previous episode about explaining what a trust does, but essentially a will mandates that you go to court, probate court, uh, because a will does tell where your assets go, but who does it tell that to? It's telling it to the court and the judge who then distribute your assets according to your will. So I always go on to talk about clients that my job with you is to make sure we save the money we've worked for, pay as little fees, taxes, and over to the government as much as we can, uh, and keep it private. So your stuff, everything you've built, all your wealth goes to who you want it to go to. And then by then everyone's like, yeah, I don't want to be stuck in the court system. That's not what I want. So then we start talking about all the elements of a good estate plan, you know, what, what it consists of, uh, what they actually need. And usually we go into the base, uh, estate planning document that I start with is a revocable trust for clients. So It takes a lot of education just to get there, just to even get to the, the batter's box on what you actually need with your estate plan. And most of the time that starts with a revocable trust. But what I wanted to talk about mostly today is a program we have in our firm, uh, L. Jennings Law. It's called the Good Steward Maintenance Program. So this is a maintenance program that enables me to maintain a relationship with my clients to ensure their estate plan is effective. And works when they need it to. The end goal that I always tell clients is I say, when you pass away and I'm sitting at this conference room table with your spouse or your kids, you know, whoever survived you, I can confidently say this is what they own and this is what we do now and take all the headache off of your heirs and your beneficiaries when it comes to knowing what to do with your assets and how to manage them. And that is my goal. So, um, for those of you watching, we'll put up a picture of our process wheel that we follow here. At my law firm, which you can see it on our website as well. It's our estate planning process wheel where basically where we start is an asset organizer phase. So, we gather all of your assets. We take a look at, you know, we get bank statements, we get ideas of your investment accounts, what real estate you own, anything like that. We gather a picture of everything because if I'm going to offer advice to someone, I have to see the full picture. No one would want to offer advice with only seeing half the picture and then the advice may not be any good because we don't know what you actually have. So that's where we start with all of our clients. Then we meet with families, talk about their goals, get an idea for what is your end goal with all your wealth and what do you want, how do you want to manage that while you're living, but also when you're gone. So we get a goal, we design the plan, and then we develop that plan into a full estate plan that we execute for our clients. So we get an estate plan that meets their exact goals and accomplishes you know, avoiding probate court, paying as little taxes as possible, and asset protection for their kids. Those are usually some of the highlights that most people want with their estate plan. But let's just say we set up this estate plan and we have your trust and it is sitting there. It's a nice pretty stack of documents, but the fact is it's just a stack of documents. It serves no purpose until you put assets in the trust. So the next process in our wheel is called the asset alignment So once we have the documents in place, you have to align your assets with your estate plan, meaning get your bank accounts, your investment accounts, all that retitled in the trust or beneficiaries how you want them. You get real estate retitled in the trust, and this is called funding the trust. So you have to actually get your assets in the trust, and that's the setup process. So that's pretty common. Most attorneys will walk you through that process. Some take it another step further than the others. But a lot of, uh, law firms, once you set up the trust, advise clients how to fund it, you're done seeing them. And when I first started practicing, that was kind of how I did the process. It was a one-and-done transaction. I meet with the client, I maybe educate them, but mainly we set up documents that they want and then never see them again. And that's not exactly how I wanted to conduct my practice. I wanted it to be a relationship. I wanted to be able to truly advise clients on what they need and then stand behind the product I offer because I know it's going to work when they need it to work because it's updated and maintained. So that's when we introduced the Good Steward Maintenance Program. And it's been top of mind for me lately because I've had my law firm open for a couple years now, but the maintenance program is just hitting its first year. So we're having a lot of our annual review calls with clients and, you know, seeing that maintenance program make it a full year and clients in it get the full benefit. And it came up where clients were telling me, you know, you need to talk about this more. This is a lot, uh, really valuable that we found that none, none of our friends or family members who also have estate plans, they have the same, uh, benefit and program. So here I am. I wanted to talk about it and what it is. Um, but really it's a process where we have maintain a relationship with clients. We stay up to date with their family, with their assets, you know, everything like that. We keep it up to date and it really results in an annual review call, especially— this is especially important after the first year when we meet with clients. We have an annual call where we check in and make sure assets got where they needed to go. And then in future years, we still check in about assets. Did their family change? You know, anything like that. Because the fact is, throughout your life, your assets grow, you buy, you sell, things change, but also your family dynamics change. Introduce new family members, family members may pass away, their status in the world changes. Maybe when you set up your estate plan, your kids were young, and then down the road they become, well, good citizens in the world, and you know, they're 30, 40 years old, then that changes your estate plan and how you want to leave things to them. But let's start with the asset portion of it. So when I meet with clients, what we do is we get a spreadsheet of all their assets. And we keep track of everything. So we have a list of every asset they have, and out to the right of that spreadsheet, we have columns that says, how do we get this in the trust? Who's responsible? And was it done? So when we have that annual review call, I run through that list, say, did this get in the trust like we intended? Did this get done? Did this get done? And it seems like almost every time clients say, uh, I did all this, but I forgot this one asset. So then we circle back and make sure it gets done. And the end result is by the end of that, uh, phone call and that annual meeting, I know that their estate plan got set up properly. Um, and we can walk away confident with that. So I know, you know, down the road when I'm sitting there with their kids, I can pull out the spreadsheet and say, I just met with your parents on this last year. We know what they own, we know where it is, and this is what we do now. So there's no headache or mess for, um, the beneficiaries. The next thing is, you know, families change. Other than assets, your family changes. So when we check again, with clients, we have a flowchart of their estate plan that shows how things flow. It shows who's in charge where, where, how the assets are divided and how they inherit them and what assets go where. So then we run through that flowchart in our annual call and say, hey, is this still how you want it? Do you still want the house to go to your daughter and the farm to go to your son? You know, how is your son still in in med school or has he graduated? You know, what, what has changed and how we want to pass things on? And a lot of times they say, well, actually, um, our, uh, my brother who is our trustee, he is getting old and out of shape and he just can't do it anymore. We need to replace that person. So stuff like that, we maintain, um, the estate plan. And the big thing that brought this up for me, it was maybe a few weeks ago, Where I'm at in my law firm is we have, I'm one of the few attorneys in town. So it seems as people are passing away, I'm inheriting trusts that I did not draft and I have to administer. So every trust is different. So when you, when I inherit a new trust and I've never seen it before, first time I'm looking at it, typically I have no idea how to understand it or how to follow it. Now I went to law school and I can learn and I can catch up pretty quick, but it's like a foreign language to me. And then not only that is we don't know what it owns. You don't know what a trust actually owns until you see the asset itself and how it's titled. Just because in your trust that you listed, uh, I own bank accounts and various things, it doesn't mean those bank accounts actually got in the trust. So it's always like putting together a puzzle. And I say that to say it's important to maintain your relationship with your attorney that set up your estate plan throughout your life, because if the attorney that drafted your, uh, trust is the one that administers it, it's going to be quick and easy. They're going to know what's in there. They're going to know what it says. They're going to know the best way to do it. They're going to know everyone's intention when they set this up and they can follow that. Now, that always can't be the case because sometimes your attorney maybe is the same age as you or retires, passes away, something like that. But you always need to have an attorney that you have a relationship with that is familiar with your estate plan. Up until the day you pass away, you want to keep that relationship. Because that's how an effective estate plan is administered. So I just wanted to bring that up, that there's a lot of value in the relationship. All these things, even, you know, any attorney can draft a document, even AI can now draft estate planning documents, and there's several companies offering that. But what they can't do is offer a process and a way for implementing an estate plan to effectively meet your family's needs. And that is what our maintenance program is. And we kind of go beyond that. Our maintenance program is only 1 year old. So a lot of this is aspirational and future plans. But there's other benefits, you know, other than our annual meeting, clients get discounts on other legal fees that they need done from us. And we update their power of attorneys every 5 years, because that is what banks and larger financial institutions tend to tell us they want. They want updated Power of Attorney. So we do that for clients. Um, clients get priority access to attorneys. Um, when they need to meet with me, uh, they're first in line. So if it ever comes down to it, we, we get pretty busy during certain times of the year. And I've said multiple times this year, we can't take on any other probates. We can't take on this or this because my clients in my maintenance program have priority and they always get bumped up to the front of the line. So I'd like to say there's a good bit of value there, but other things that we are aiming toward is at the Good Steward Law and Wealth Podcast, our whole thing is managing our whole wealth, not just our estate plan. So we want to help clients, you know, manage their assets while they're living in the most tax-efficient manner. So part of our maintenance program is I'm up to date on your assets. I know what you have. I know what your family looks like. So I can spot issues and see things that I'm seeing with other clients where they maybe benefit from having this certain CPA or this financial advisor or investing in this certain type of account. So I try to proactively bring that to my clients so we can look at their plan holistically from a whole perspective so we can know, am I investing in the right account? Should I open an HSA or should I be contributing to a Roth instead of an IRA? That's part of our program. So the whole thing is I want to be the attorney that actually makes you money rather than costs money. And that's what our maintenance program is. That's how an an effective plan can be done. So if you're interested in this, if you have an existing estate plan and you want us to look at it, we will do that. But if you're just interested in becoming part of our program where you have an ongoing relationship with your attorney, that is our goal, and that's what we think makes us different as a law firm. So I just wanted to emphasize the importance of a process and maintaining your estate plan. It needs to be updated regularly. And it needs to be monitored and ensured it was set up right. And that's it for the Good Steward Law and Wealth Podcast, where we think everything we have is a gift and it's our job as good stewards to manage what we've been given to the best of our ability. And thank you for listening.

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