Estate Planning Series Part 2: Making Estate Plan Decisions

Foreign. To another episode of the Main street business podcast with my illustrious partner here, Matt Sorenson. Mark Kohler, Here we are on pins and needles waiting for the Depp heard jury verdict. Is that what we're covering today?

Yeah, we'll be covering the trials. You know, there was testimony today from.

No, there's not testimony. It's in the jury. It's to the ju. Have you not been.

I don't know. I just. What was it? Kate Moss gave some testimony or who was the model that gave testimony? I don't know. This is getting crazy.

You're a little behind. It went to the jury a couple of days ago, so.

Okay, what do I know? What do I know?

Are you not watching the news? Do you not watch tmz?

No, no, I'm busy being a real lawyer.

Oh, so now you're calling Johnny Depp's lawyers not real lawyers. Okay,

well, what do I know?

Are you team Dep or team. Team heard?

I don't know. I'm team Justice. I don't even. I haven't followed it enough to know what team I'm even on. I just know I like Pirates of the Caribbean. There you go.

Caribbean, Caribbean. Tomato, tomato. I don't know.

Whatever, Captain.

Welcome, everybody, to part two of the estate planning series. This is good stuff. Today we're talking about decisions that you're going to have to make. We're going to keep it light and fun and isn't interesting, as if you didn't already notice that. We're going to try to, you know, give you a spoonful of sugar as this medicine goes down. So.

Yeah, and, you know, we will try to make jokes. I don't. Can't. We can't promise they'll be funny, but we will try. And this is kind of where the rubber meets the road, though. I think this is where a lot of people are like, yeah, guys, I got it. I'm going to die. I need an estate plan. Duh. You know, it's kind of like people are like, I have life insurance and I pay for that every month. And I. Why did I buy that? Because I'm going to die. Do I have an estate plan that says what happens to all this when I die? No. And so we all know we need to do this, but the problem is people get stuck. We're trying to give some context so you don't get stuck and give you a process with a real attorney to help you figure it all out. Pull it together. It is not that hard. So don't get hung up on this. Hopefully, this episode will illustrate how you can work through these issues. And some things you should be thinking about that that can be very beneficial to you in planning your estate, and as we like to say in the first episode, planning your legacy, really, because it's more about just not who gets what, but it's about the things you want to happen with your money and how you want your kids involved or whoever your heirs are, nonprofits, whatever you're trying to, you know, when you pass.

Yeah. And the short version of what Matt just said is quit procrastinating. And we're going to try to get you through those feelings that you're having right now during this podcast. So. Yep.

And, Mark, I build by the hour for a decade. I. There's no such thing as the short version.

Fair enough. I'm going to follow that up. But you did set yourself up for a. That is totally inappropriate for the show. So I'm just going to. I'm just going to let that fly into the ether. You know, I'm just, you know, because I'm the high road. Matt, I want you to know that

everybody can rhetorically ask that question.

My mind is completely focused on estate planning right now. I wouldn't have thought to say anything when you said that. That statement you just said. Okay, now let's start with this point, people. An estate plan, 99.9% of the time, it's going to be based on a revocable living trust. That's the backbone of this entire estate plan. It's the bible of how your estate plan is going to be carried out in your state and your assets. And there's a keyword that I just said in there, revocable. So the first thing I want all of you to know, and this is why, if you're on our website right now, on the page for estate planning, and you're watching this, a little frustrated and like, I hate doing this, or I'm. I'm stalling again. I'm procrastinating. I don't want to do this. Let me just say this. It's revocable. Freaking throw it, you know, dart at the wall. Let's get this darn thing done. Now, you can go bungee jumping and skydiving this weekend, and we got a plan. Now, you wake up a month from now on a cruise ship with a margarita, and you want to cut someone out, give us a call. You can amend it. It's revocable. But let's get something in writing or the state's going to carry out their plan, not your plan.

Yeah, usually the boat, you know, drinking a margarita. That's not the time you make changes to your state plan. But the family reunion where, you know, someone ticks you off. That, that one, we get that one. That one's a little more common. Or maybe the holidays. People come back from the holidays. Estate plan amendments just seem to rise during that time of year. I don't know what it is.

I know there's a correlation. I want to like figure out a spreadsheet that correlates the number of amendments to an estate plan versus on the number of days you spend at your mother in law's with all the family. And yeah, it's, there's a science.

Really, it's scientific. Okay, well, let me change this. And I think a lot of people are like thinking of I need to find the perfect person to be my trustee or the guardian for my kids. That doesn't exist. Everybody struggles with that. Just pick the best person available.

Okay.

You know, like how you were like in elementary school, how you pick teams and you'd be like, okay, I don't get my first pick. There's five kids over there that I have to pick on my kickball team. I'm getting one of those 5K. You're getting the best one available. LeBron James or whatever, you know, there he's.

Yeah, you got picked. You're done.

Maybe that's not his scam. Kickball.

Just take Smalls. Just take Smalls.

What's this? What? Give me a soccer player. I can't. Lionel Messi. He's not over there. You know, he's, he's not standing there for you.

All right. Went to sandlot. You know, I was gonna say take smalls. Okay, now let's talk about the first thing in your estate plan. There's some key people. Now let me just lay out the key people and then we'll go and explain who they are. The first one that's. I don't know if there's any particular. I'm going to go first is if you have minor children, you're going to choose a guardian for your children. Who's going to raise the kids? Come back to that. Number two. You're going to choose an executor. The executor is the, what I like to call, and I know it may offend someone, the party planner. They're going to plan the funeral. They're going to be the ones to kind of go through your house, do the eulogy, figure out the funeral, the color of the flowers, the coffin, whatever. They're kind of putting together the details. We'll talk about who that might best be. And number three, you're going to have a trustee. The trustee is going to run the trust, really be the numbers person. And we'll talk about do they have to be local? Can it be three people, one person and what would their role be? So you've got guardian, executor, trustee. In my most recent article, I even talk about a guardian for your pets. You may choose someone to take care of your pets and we're going to talk about money set aside for them. But before we think about provisions, let's just talk about appointing people. And then that's really, once you get that going, really, you feel like you've left the station, you're off to the races. Yeah.

So I think for those of you with minor children, the one you may struggle with the most and probably the most important decision is going to be guardian. You know, who is going to raise your kids if you pass before they're, you know, adults. And if you've got minor kids, this is definitely part of your state plan. It's actually part of your will. And so the first thing I want to say is the guardian, you should think about who would be best, you know, raising my kids. It may not be your parents. I think a lot of people, their first inclination is grandma and grandpa, you know, one of the grandparents and that might be the right situation. Everybody's a little unique. But I want you to also think, is grandma and grandpa ready for that? They passed that phase of life.

You may think they love your grandkids, they love your grandkids to a point and then they hand them off back to you. They don't want them to stay the night.

They're also maybe in a different stage of life, but maybe you have a sibling with some kids a similar age or close friends or other. I want you to think, just don't go automatically to grandma and grandpa. That'd be my first consideration.

Number two, I would say don't appoint a couple. Some people go, oh, I'm going to appoint my sister and brother in law or my brother and sister in law or a couple. What happens if they get divorced? Where do the kids really go? Don't think of a couple, think of a person. Now usually when it comes to rearing children and nurturing, it's going to be a female. And, and that female, that woman might also be a trustee, an executor. They can Be the same person can serve in all three roles. We'll come to that. But you may be choosing someone to raise the kids. That's great with your kids. They live in the same area. Your kids don't have to change schools. They may be. You know, we see movies all the time where kids are uprooted and go across the country. And then there's a draw, you know, a whole drama. There's movies. How many movies? But you might want to be thinking of who's the best person that may not even be in the family. It could be. This is where the Godfather comes into play. You know, the Godfather may not be. Or the godmother that's going to raise your children have to be family. So, I mean, I could just keep going on here, but thoughts on couples and female and family and local. I mean, it's all kind of part of the same equation.

Yeah. And everybody's different. It might not be female. It might be. And your kids might be older or teenagers. They might be younger. You know, your. Your parents might be younger, and so they're younger. Grandparents, like you might have close friends that might be the right fit as opposed to family. I mean, it's. It's. Everybody's a little different. But one. One thing is think about the best situation for your children to be raised in the values you want. The people that will. That will instill those values on your kids, the best that will love them. And think about that. Remember, too many times, the person who's guardian is different than the person who's the trustee that's going to control the money.

Yes.

Which we'll talk about here separately. Yeah.

On that note, you kind of don't want the person that gets the cookies in charge of opening up the cookie jar. So the trustee is the one that takes the lid off and distributes money. The guardian's the one receiving the money. And they're going to go, oh, you know what?

The cookies.

Yeah, they're eating the cookies. They're like, the kids, they really need a trip to Hawaii. Oh, there's the trust. I'm going to take the lid off and let's all go to Hawaii. The kids need it. No one's there to control that. So you got to be careful giving the guardian the checkbook because they could justify a lot of expenses that a trustee might be like, you're doing a good job as a guardian, but I don't think you need to go to Hawaii with the kids. Yep.

And sometimes that data's the right person. That's a guess. The person could be. It could be the. That could be the same person. Or sometimes I get. People are like, well, I don't really have anyone else. This is the best person I trust in both instances of money. Okay. Sometimes you're gonna just fall into that. But if you're like, you know, I got someone that's really great with the money that I. That would know my stuff, that would. That would carry out all the provisions, and I got someone to be. Great phrase. And my kids. And it's separate people. Awesome.

You.

You're like, that's. You got the best of both worlds. Um, so again, I just want to say everybody's a little different. Um, but let's. Let's talk about trustee next. Cause I think.

Hold on. I want to say one more thing about guardian, because I was. Okay here. Um, if I may, is when you're appointing a guardian, you're going to need to also think about a backup. So if you do appoint someone older, like your mom, make sure you have a younger person. And think of the current age of your children. If they're five and six years old, you're talking about your mom raising them for 12 more years. And again, thinking of your mother's health and her life and what she wants to still do in her golden years, you got to be sensitive to that. Also in your trust, you can set aside some money for your guardian in it and say, hey, whoever I'm appointing as a guardian of my children, I'll have them get. I want the trustee to give them 50 grand right out of the gate. They can buy a bigger car, buy a bigger house. Maybe it's 100 grand. I don't know. How many kids do you have? And then you can say, and I want the Guardian to get $1,000 per month, adjusted for inflation per child while they're under age 18. Once those three kids turn 18, guardian's job's done, money's cut off. So we're now one thing and all this is the attorney that you work with at our office, it's going to help you with your statement. They're going to walk through all this. They're going to talk through all of us. What we're hoping to do is just give you some ideas to get your juices flowing.

So. Yep, Love it. Okay, trustee, let's hit that. This is. This is the big money person. This is the person who controls the lid on the cookie jar.

I guess that was a good analogy. You don't like that?

Me, I guess Give me another one right now. We can roll with cookie jar. I just think like the cookie monster bust into the. Okay, the trustee. Now this is the person that's going to run the trust. They are going to have a ton of power. You are putting them in charge to run everything. They do not have to go to court. All right. The nice thing about the trustee is the terms you put in the trust. The trustee is going to carry out and they're, they're stuck. They have to do what you say in the trust. Now, that being said, a lot of people are not going to be involved. So this person you must have trust in, hence the word trustee. And they're going to be carrying, like we said, everything out.

Now on this note, they don't. I like the guardian. Like I love what Matt has said is choose a guardian that's in the best interest of your children, maybe not your extended family. And what they want, what's best for your child here it's like what's best for your money. They may be terrible with kids, but they're good with money, trustworthy. They're, you know, Scrooge or whatever. But. So you want someone that's going to treat that money wisely, carefully, smartly. And they could be local, they may not be local. You can also appoint three trustees. I don't want to because they'll get deadlocked. But you might appoint a financial advisor, brother and a sister. You might appoint a mom, a dad and a cpa. You might. So you might have this kind of a third party in the mix to be like a tiebreaker on boats or whatever. A lot of times are. I've been appointed my attorneys in my office. Accountants are appointed as a part of a three person trustee group. But they don't have to also be local. They could actually be foreign. I think that's a, that's a big hurdle. But someone trying to run your US based business or money from another country, I wouldn't recommend that. But it can't. But that's possible. But I don't know if that's really functional.

Yeah, foreign trustees, we've just seen some issues with those. But again, possible. It's just logistically sometimes it gets hard. Every once in a while somebody's just show up at a bank for certain things or you know, have the right ID or you know, they got to get verified and so you got to be just that as a consideration where I've seen some issues, but okay. On trustee. One other thing to keep in mind is you want Some that can figure your stuff out. If you're a business owner with a lot going on, you've got a lot of real estate, you've got a business that needs to operate, you know, you need to think of the right person that can figure that out and that can dial that in and you need to leave some helpful information. Wouldn't it be nice if you had a trifecta diagram done when you did your estate plan that outlines all your stuff and how it's owned, how it's coordinated with your trust. Someone coming in after you pass could like be like, oh, I see what they have here, or I could at least take it to someone to help me figure it out. So. So think of someone that can help with that. You know, if you're a business owner, that certainly helpful to have someone that could understand that. Now, many times you're going to be trustee during your life. Usually when we set this up, you're trustee now and if you got a spouse, your spouse is a co trustee with you. When the first of you passes away, the other one is their surviving trustee. But when the second to die goes, or maybe you're single, what's going to happen is we're talking about your successor trustee that comes into play after you've passed away.

I'm glad you pointed that out. We probably should have led with that. Now, the moving along here because we want to get to some provisions. I'm going to bring up executor. The executor again is another unique person that could be the same and all the same person could serve in all these, but this would probably be a person that's local. They're going to be the one dealing with the funeral home, the wake, the viewing, the funeral, the da da da da da, maybe going through your house. They're basically going to be the local boots on the ground. And they again could be not great with money, they may not be great with kids, but it could be someone that you wanted to give a role to. And they're good, I joke about, but literally a party planner. They're going to be good at bringing everybody together. They may be the most neutral family member that everybody loves. And you're like, I don't want them to raise the kids. But you know what, they'll bring everybody together. They'll make everybody feel welcome. And so that's always going to be your spouse. If you're married first, this is where you can have your kids involved that are Maybe in their 20s, 30s, or even that age, even Though they may not be getting all the money initially, which will come to. They can still be the executor and help plan those sorts of things. But that's the executor. Personal representative.

Yeah. So, yeah. Now, one thing about them is they really have no authority. The executor really has no authority to do anything. Their name's on some documents, so they can, you know, help with the funeral and, you know, a funeral director will talk to them or, you know, they can. They can throw some weight around, you know, but really, at the end of the day, the trust is going to dictate everything. So who's going to get what? And even when you're going to the house and sorting out things, like, the trustee is really going to be in control at the end of the day. So. But they do kind of. They get a title and they get a role. And like Mark said, I think like the funeral and those kinds of things.

Right.

Following your passing are probably where they're going to fill in most.

Yeah. Now, some of you may be thinking right now going, oh, my gosh, I did not take that perspective when I did my trust or my. Maybe you did your estate plan with us in the last year or two years or three years or four years, and these topics didn't come up and you're like, oh, my gosh, I need to amend it. Easy schmeasy. It's a revocable living trust. We can change that. We can do what's called a will, codicil and modify the will and dial that in. And it's very common to see changes as life evolves. Good kids have problems, bad kids get better marriages, family members die. You know, all those sorts of things. Now, last Guardian I'll mention, and then we'll get into some maybe unique provisions is pets. I was telling. I dove deep on this in the last week. Interesting. It's over 64%, 65% with COVID It was a big bump in pet ownership, but 65% of Americans have a household pet. Basically, the categories were essentially a cat or dog, tarantulas and snakes didn't count. But interestingly, in their surveys, 95% of those people said the pet qualified as a family member. Like they held them in esteem as if they were a child or a parent and people. But every year, thousands and thousands of pets are taken to the shelter when an owner dies because the family doesn't want them. There was no structural mechanism to take care of the pet. And so this has got to be addressed. So Matt, your thoughts on that?

Yeah, I mean, it's common. People want to know who's going to take care of the dog or the cat or whatever the pet may be. And it's something you can easily add your estate plan and say, here's who I want to care for my pet upon my passing, here's what I'm going to give them. Usually you want to give them some money and it could be one time thing or it could be a payout over time that the trustee could, could control. And so, but you know, you're going to leave your pet behind, you don't want them going to the pound or you don't want. And sometimes, on the other hand, sometimes kids are fighting over the pet or other family members are like, so now there's an argument about who gets the pet, you know, rather than you settling the score and just saying who's going to get them and take care of them.

Yeah, I will. And I have a few stories and jokes I tell when I'm doing a workshop on this. We don't have time for it today, but little Fido, little Fido might meet you at the pearly gates if you're not careful. So you want to have a plan. And I, I don't like giving the guardian a lump sum of money because I, sorry, some of this may be a little morbid or sad view of life, but if you give them five grand up front, take care of my pet and they walk off into the sunset and they're like, who, who's to know the quality of care? And is that pet not going to end up in the running around on the street the next day after they get their five grand? So I've literally crafted provisions that say, I'm not kidding, I've crafted many times that the trust, the trustee is to distribute a thousand or $5,000 a year for every year the pet lives. And then upon the passing of the pet, any money set aside for the pet goes to a charity or a local shelter. Again, if you leave whatever's left in the trust to the guardian of the pet, that pet may have a shorter lifespan than you imagined as well. And so you got to think, okay, my pet's going to live 10 more years. I want to give him five grand a year. I'm going to set aside 50 grand. And some of you go, I don't have 50 grand.

Really?

How much life insurance do you have? How much IRA money? How much 401k money? How much equity in your house? Oh, you're just going to give that all to your family. I thought the pet was family. You can't set aside 40 grand, 50 grand for the pet to get taken care of. Oh, yeah, okay. So you don't have to be rich to do this. Just carve out a little money. Money talks.

On the other hand. On the other hand, okay, this is one little reasonableness here. There's, again, different ways to do this.

You're saying reasonable, 50 grand for the

pet, monthly payments and everything. I'm like, okay, annual.

I said annual.

Me. MATT Sorenson ATTORNEY and be like, here's your trustee. Going to love this. They're cutting checks for the pet every month. Can't they just give a lump sum? And couldn't you pick someone that you actually just trusted and said, hey, trust you with the pet. Here's a lump sum of money.

Famous last word.

Let's.

What would you do with Duffy? What are you going to do with Duffy?

Duffy's going to fend for herself.

Obviously not in that 95% category. Okay.

Yeah. You know, I think you pick who would get them, give them a little bit of money. I would die with this. My thing. I wouldn't really necessarily. Like, they need, like, monthly payments and everything for this. Jeez. But, you know, you could be like Leona Helmsley. She gave millions to her. You know, she passed away and gave her whole estate to her pet. It was like 100 million or a billion dollars. I can't remember. It was insane amount of money. No kid got anything. Nobody. The pet got everything. So. So there's, you know, different spectrums on this, of course, which brings us to.

From pets to kids. And let's transition straight to teenagers because you're gonna have to sweeten the pot for that teenager, too. You think that guardian's gonna love three teenagers getting dropped off on their doorstep? You gotta cuff up some cash for that. So I think making sure you have some stipends for the guardian is very, very reasonable. And I'm not saying it has to be monthly. It could be annually. Don't make it burdensome for your trustee or your guardian where they have to be begging for cash. You want to be generous, but let's start rattling off some of our favorite provisions. Let's do that. I'm going to take one. You name one. How about that?

Okay. What?

No. You don't like that? I'll go.

Yeah, I'm ready. Okay.

You're ready. Okay. I'm probably one of the ones I'm most famous for and that I've loved is giving money to kids in stages. They get a third of their inheritance when they're 25, a third when they're 30, and a third when they're 35. They're going to blow the first third, they're going to try to invest the second third and fail. And by the time they get the third third at age 35, they should have their crap together. Now some of you are like, oh, my 16 year old, she's so smart. Oh, my 18 year old, he's such a great consult. Conservative kid. Yeah. You plop a million bucks in their hands at age 18, I'll tell you. Yeah, we'll see how well that goes. So I like money to kids in stages. That's my first one. What's yours?

Yeah, I love that too. And I think it helps carry on, like make sure kids kind of work for it still too. They don't get a big lump sum. They have something to look forward to and some comfort in that too. One thing that's going to be in your estate plan, and this is generally everyone wants this, is if you have kids with a drug or alcohol addiction, the trust isn't going to pay the funds out. And this is a nice thing of a trust in contrast to a will, is the trust is going to protect that money and say, hey, all right, if we have kids or an heir that has one of these issues, they're not getting anything paid out they'd otherwise be entitled to, whether it was the one thirds or you're just doing a lump sum. And so that can be drug or alcohol addiction, creditors that would just dive in and take that money from them anyways. So generally your trust, you're going to have these provisions in there. We want those typically in there. You don't have to, but most people will add those in there as standard ones.

Okay, so you, if I dissect that properly, took two, drug and alcohol was one and creditors was number two.

Okay. Yeah. But I did it very efficiently and quickly.

Yeah. And deceptively. Now I will say that sometimes we call those spendthrift provisions. If children have creditors after them, a spendthrift provision says we're not going to give them money if someone else is just going to take it. So I just wanted to throw that out. Great comments, Matt. Another one I like is if they go to college, they get money for maybe books, tuition, room, boarding, food, transportation, whatever. You get to define it. Sometimes you want to create more of a carrot than just throwing money at them to go to college. They can get more money. If they get a certain gpa, they can maybe get a reward upon graduation. You may say, I'm going to cover graduate school, but only tuition at graduate school. So you're slowly creating some independence. But anyway, I would say an education provision.

Okay. Like it. All right.

Okay.

I like the starting a new business provision.

Okay.

You know, because every kid doesn't need to go to college. Some just. Some of them already have. So how about money to start a new business?

Like it.

And you can define a cap. The amount, you know, to what it would be. Maybe it's 50 grand. You know, it's like half a million dollars. Start a business, you're gonna be like Donald Trump. Be like a $10 million to start your business. You know, it's like, let's pick what your. Be specific on an amount, too. So there's not an unlimited cap.

When I've drafted that, and we. I think we have it in our template, is that upon this submission of a bona fide business plan to the trustee, so they submit.

It's not like I'm just like, you know, I'm starting Cray America Industries. I've already got my first intern and

fill up this ball of oil. We're going to drop it out the window here. All right. Okay. The next one, I would say medical. I'd like to make sure there's a provision in there that if the child needs anything for medical in any way, shape or form, cover it. Health insurance, deductibles, special surgeries, whatever the physical therapy. Who knows what your kids could encounter, Heaven forbid, but have a provision for medical on top of any other distributions that might be there.

Yep.

Okay. Got another.

Okay, let's see. I've got one.

If your kids feel married to that other bozo, you get nothing.

Yeah, that one doesn't work, though.

That doesn't work. That's true. In fact, Matt, explain why I brought that up in jest, but I wanted you to explain.

Yeah, yeah. There are certain provisions that are. Like, if it's against public policy, that's not enforceable, actually. And so the trustee would not be required to follow through on it. In fact, the beneficiary could argue against it and make sure they get paid out. So, like, the. The you must. You only get your inheritance if you divorce. So. And so Is against public policy because public policy is to encourage marriage and not force people to get divorced to get paid for it. So. So there's kind of like there's some law in that a lot of states. So so if it's gonna encourage something that would be against public policy or against the law, it can sometimes not be enforceable.

Which brings us to disinheritance. Some of you do have estranged children, and you have to specifically say, I leave this child $1,000 or zero or whatever. But it needs to be specifically stated. You can't just say, I'm leaving money to these three kids. And mysteriously, the fourth kid's not mentioned. You're going to lose.

Yeah. So if you want to leave a kid out, you got to say that you can't expect. Well, I've got three kids, and I'm just going to say the two that I like get at 50. 50. Now you got to specifically say, the one that I don't like gets nothing. You have to say that. Otherwise the courts kind of presume that you forgot them. And if you didn't specifically disinherit them, you could. It could be. It could cause problems. So if you have kids in particular, and it's only kids, it's not like nieces and nephews or cousins or. You don't have to do that. But kids, you specifically have to list out and say, I'm not. I'm disinheriting them. They are not getting anything.

Okay. Another provision. I like to think about weddings. You may want to say, upon any of my children getting married, they get $50,000. They could use that to. In any way they want for the wedding itself. Honeymoon, buy a new washer and dryer, buy a new home, together, whatever. But upon marriage, and I've had clients be very clear upon their first marriage, before age, whatever, or after age, whatever, because they don't want kids to run out, get married at 19 just to get 50 grand. So you can again, get really creative. This is really the narcissist way to control their family from the grave. I mean, really, if you. If you haven't jacked up your kids enough now, do it while you're dead. You know, put in some fun provisions.

That's a good, great spin on that. Okay, let's hit. Let me. I kind of take a little bit of a detour. We're still on the same path there, but just, you know, maybe a scenic route here. What about other weird, certain property you have? You know, I think we got to talk about that. Sometimes it's like, well, I own a boat with my sister, and it's like when I pass, I just want my sister to get the boat. We kind of bought it together, and my family uses it. Her family Uses it. And let's just. But so think of things you may have together. Maybe you have a business partner that might. Some assets might pass separately with a business partner. So sometimes just think of some specific property or assets that are tied to another person directly. And we usually like to address this in your state plan in a separate section. Before we get to everything else, we kind of just say, is there any specific property we got to have a special plan for? Let's state that now and who gets it. And then everything else we're throwing all these conditions on.

Yeah, this is oftentimes referred to in the business continuation plan topic. You may have a section that says here's who gets my business in the family farm situation, which it can really be, I'll say, quite an emotionally charged situation. There's a old school farmer mentality that I think is carried over for the last couple hundred years that the oldest son gets to farm. And I've been in those meetings where the daughters are like, well, what the heck, Oldest son gets to farm the truck. All this. He runs off in the sunset. What did we get? And in those meetings I've tried to really encourage mom and dad to focus on the value of the home, maybe a little life insurance and say, you know what, can we do something for the rest of the kids? And there's some real old school mentality there that sometimes is an uphill battle. So just unique. Okay. I was going to say also buying a first home. You could say, I want to leave money for all my children. This could be grandchildren. This is another exciting one that you can say, oh, I've got enough that I want to leave a little bit to each grandchild to buy their first home or to go to college or whatever. So I'm going to bring it in the grand station.

But oh, I like that when the grandkids to throw in something in for them for like you said, education, buying a first home even. Okay, let me. Because I kind of got on that little specific property and kind of on that detour just out there.

You stay on that off ramp, man. Sorry.

Is sometimes you got other little personal property assets and. And a lot of times we're going to do a personal property memorandum where you can just say, hey, the jewelry is going to go to this kid. The musical instruments are going to that kid. That these guns are going to this one. These ones are going to that one where you can be a little more specific about specific items of property that are personal property that have some value to you and. And some of your loved ones. So a lot of times we just. You can outline that in your memorandum. A personal property that's done when you sign the estate plan. You can add to it whenever the heck you want. If it's something significant, we can throw it in the estate plan just to be right in there. But just think of some of that personal property that you might want to decide who gets what. But again, this is where I want to say, do not get hung up on this. A lot of people just don't do an estate plan because they get hung up on this. Well, I got all this jewelry. Who's going to get this one? I got to go get an inventory of that. If you don't know in your head who's going to get it, you can't think it through. Don't worry about it. Just get that all out. Worry about everything else later and you can add to that later.

Yeah, I like it. In fact, maybe this is a good point to bring this around to some sort of conclusion on this issue. I. We have a questionnaire that we ask all of our clients to fill out when they're starting their estate plan. We have an estate planning special this month every year. We try to really kind of drill down for a month in June on estate planning. You're going to see it in our newsletter right now, a number of articles on this. We got more to write. So we're going to kind of delude you for a month on this topic because I think again, so many people procrastinate. We want you to feel educated, empowered, and not afraid or miserable to take care of this. So I was going to say in this questionnaire, we have a whole list of ideas. You know, kids get a dollar for every dollar they earn. They get money for this. You might have some money going to charity. The list goes on and on. So when you meet with the attorney, you, you can, you'll flush out these issues. What I recommend all of you, if you've gotten some ideas from this podcast now, is pull out a yellow pad plus some notes on your phone or whatever the app, and just start thinking. You know what, here's what I want. You get to write the law. You just spit out anything that comes to mind. Our job is to put it in legalese, make sure it's non contestable and it's done. And then you can change it again and later if you need to.

Yeah, okay, let me hit. Can I hit two other ones you got to think of?

Yeah, sure.

So let's talk about your Powers of attorney.

Okay.

Because you got to make some decisions on there and you're going to have two separate ones. The first one, let's get that one off the table because that one's easy. The power of attorney for finances. If you got a spouse, this is your spouse. And generally. And then upon your passing or, and your spouse's, it's going to be your successor trustee you generally want, who's going to have power of attorney for finances. It's kind of usually the same person. It's not always, but a lot of times that person, you've already entrusted them with your trust. They should know a little bit about your stuff before you're passing. So a lot of times I like it to be that same person. Now, the healthcare power of attorney is different. This is someone who might be a little bit better with health care. Maybe you've got someone with healthcare background in your family, one of your kids or other family members that could help for this. And remember this health care power of attorney. These power attorneys are for while you're living. It's about like, you know, if I'm in a state where I can't make medical decisions for myself, who do I want to make? Those decisions can typically be your spouse. If your spouse has passed, you don't have one. Who's someone that could make good health care decisions? Maybe they're in that, that's that profession as an employee or health care professional. So just that's going to come up in your decision making too. You want one of those?

Yeah. And when it comes to estate planning, remember, an estate plan is a big old binder. I really ought to grab one over here off the shelf. I've got one across the room here. But in that binder, these powers of attorney, the will, you're still going to have a will that's going to tie everything together with your trust. You'll have also the living will or the health care directive that says if I'm a vegetable, the plug.

Yeah.

The person that you've appointed is your health care power of attorney. They're not in charge of pulling the plug, you are. And you're saying that in advance. You're saying if I'm a vegetable, just pull the plug. And if there's no one around to pull the plug, my ex will do it. And they'll rush right over. They really will. They'll help you out. They shouldn't have a problem with that. And they'll. And usually they'll do kind of that cord wrapping mechanism, you know, Procedure where it's.

Tidy it all up.

Yeah. It's not going to go over. Just pull the plug. They're going to stand about 10ft back, wrap the cord up in their hands and then really give a good yank, really get that out, you know, therapeutic thing. So you can appoint that in your healthcare directive. Just get it taken care of. Yeah.

That part's optional, of course. Now you're also a lot of times you're going to say, do you want Oregon to donate your organs or not? A lot of times be in that. So you can make a decision there. And it's interesting, the people who. A lot of I just see clients over the years and people are like, hell no. A lot of people are like, yes, what the heck, they're not good to me. So. But you make. That's for you to decide. You know, throw that in there.

I, you know, it's been fascinating how many people have stopped by and asked Matt, could you donate your body to science? And Matt, that's been a big issue for you. I mean, it's really.

I know. I mean, medical profession wants to study it. You know, how can we replicate this?

How can we replicate that? You know, this unicorn, you know, get that.

Oh my gosh. Well, are from.

Yes. Now, when you go out shopping for your estate plan, I know some of you want to go meet face to face with a local attorney or you've got your good old family attorney from years past and da, da, da, you may even get schmoozed by a big law firm. I think budget wise, you should all plan from around for somewhere between $1000 to $2000. Somewhere in that range, we charge 1500 bucks. We're doing a special every year around this time where we knock off a couple hundred dollars. And I had a financial Advisor yesterday, say $1,300 for the trust will the whole nine yards in a binder. And I get a meet with an insurance 1,300 that's too cheap. I'm like, no, that's. I think fair and I, we make a lot of other attorneys upset that charge 4, 5, 6,000 dollars for the same thing we're doing. I'm not, I'm. Maybe there's a lot better advice and maybe a few extra bells and whistles and they spray the paper with, you

know, you know, they got gold leaf paper.

Gold leaf. That's it. Yeah.

Yeah.

So. But at the same. And I know for some of you, thirteen to fifteen hundred dollars is, is expensive and I get that we're trying to find a happy medium. You're not meeting with the attorney for hours on end. Some of the estate planning attorneys will do that. They're going to have a lot of meetings with you and that things. And that's fine. If you want more time with us, it's going to cost more, but we've tried to create a good balance. And so when you go out and shop around, keep those prices in mind because we don't want you to get taken advantage of. Now trying to get an entire estate plan done for 500 bucks. Holy crap. I mean, I just, I don't see it. And if you try to do it online, you'll jack it up. This is something that you want to keep around the rest of your life or the next 20 years and amend it from time to time. Try to at least be in that $1,500 range and do a good job.

Yeah, I know a number of lawyers who make a living and literally this is all they do. Literally make a living on fixing, do it yourself estate plans. That's all they do. They target those people that did them. I don't know how they find them, but they just target them. And most people are like, yeah, I have no idea what I did. And if this is even leg or not. So the plan it right. Just get some advice from somebody who's drafted some estate plans before. This doing yours is going to be your first one. What's the first thing you ever made? The first time you freaking cooked an egg, you probably sucked at it. Don't do this to yourself and do your first estate plan making your own. All right, but someone who's done them before, we got the process down. We have the docs that work in all 50 states. We can help advise you and walk you through it. And. But it doesn't have to be rocket science either. We're trying to find the happy medium of let's get a good, good estate plan done. Let's think through the issues, tailor it to you, get it done, but don't overthink it. On the other hand, okay, some clients want to talk about this for like 10, 20 hours. That's not the $1500 state plan either. Okay? Just get in, make your decisions. Because what happens is, and if you don't realize this, you already have an estate plan. If you don't, if you don't have one that you made, you have one the government made for you. Your state government already decided what's happened to your state. If you didn't do anything and let me tell you, a lot of times that is not what you want. Your family's going to end up in court. A judge is going to have to decide. I guarantee you they're going to have family members disputing on what it was you really wanted and what you said. And so get the plan done. Save your family the heartache. Create a legacy. Get the stuff you want done. It's like, win, win, win. So. But I know it's just one of those things that people hit roadblocks. So get it done. I don't know.

I love it. Okay, now here's a precursor for next week's episode. Part three is what do you do once you sign this darn thing? And we're going to talk about funding it, maintaining it. Is it really that much of a headache? Is it expensive? And I'll give you the short answer, spoiler alert. No. There is no tax return due every year. There's no bookkeeping, no new bank account required. It'll spring into effect in a variety of ways, but there are certain assets we want in the trust, and we're going to talk about all of that and more next week in Part three. So thank you.

Yeah. Thanks, everyone. We'll see you back here for part three of the estate planning series on the Main street business podcast. Remember the Special? Get to kkoslawyers.com Save200bucks on our already awesome estate plan. Plan pricing. Don't miss this.

Wow, you could do commercials.

Yeah.