Pandemic Planning: Will vs. Trust

Welcome everyone to the Refresh youh Wealth podcast. This is Matt Sorenson along with my amazing co host, Mark J. Kohler. He was pointing two fingers to the screen. For those of you on audio, I'll just give you the play by play commentary.

Yeah, yeah.

So however you're listening to us, whether you're on the podcast, listen to the audio. Thanks for being here. If you're checking out the video on YouTube, you know, you get to see our ugly mugs. But we're excited to be back with another episode and have an important topic, I think, about life and death.

Yeah, I mean, this is a really timely topic and want to welcome all of you new listeners or viewers on YouTube. We've been doing this podcast off and on. It kind of started with me flying solo until Matt and I were able to partner up more and more through our businesses and the law firm over the years. But we've been doing this over 10 years and so we've been sharing tax and legal tips, asset protection tips, and one of those is estate planning. So obviously you've seen on the title of the video or the podcast that we're going to cover a little bit of that. It's never been this big a deal in America that people have been thinking about their own mortality since some of the major wars, World War II or maybe Vietnam. And so this is a big, this is a big deal. But we're trying to bring it in two different mediums, the audio and the video. So we'll try to make sure it works for both. My face is finally recovered. I still have a scab here on my nose and my black eye is healed. Some of you know, I've been in the boxing ring. It's a great workout and Bruce Willis is my hero. Still punching the bag in his 60s. So I'm doing it, you know.

Yeah.

Zolda Spruce.

So what class, what weight class are you in, Mark? Or what do you like the middleweight heavyweight? Are you in a class yet?

Technically, I would be a heavyweight, which is

okay.

I am heavy and I weigh, so it's kind of natural that I'd be a heavyweight.

But like fighting at Floyd Mayweather, what is he? He's like, like, he's like 130 pounds, isn't he? He's like 150 maybe something. I mean, he's small, but. All right, so you got hit in the face.

Yeah, yeah, I do.

Let's get back to that. I'm getting distracted. Okay.

I know. I've been trying to. Everybody talk. Matt into this. And we haven't literally been on video together for about a week. So he was like, dude, what happened to your face? But I always like that when people ask that, dude, what happened to you? It's like, Tommy boy, I told you, Richard. Yeah, it doesn't hurt here or here. Yeah, but any. But just right here. So I know I get, I get a sparring every Saturday. So my trainer psyche you're going to spar on every Saturday morning for an hour in three minute rounds. Wear you out fast. So I'm like laying on the. I didn't get knocked out. I pass out. And so I got hit pretty hard over the weekend. And Matt's smiling because he knows something that I told him not to say, but I know he's going to say it anyway. So just get it out there, throw it out.

What was her name? Who hit you?

Fair enough. Fair enough. It was a girl. Yes. She's very tough. She's very athletic and she's my age. And she's just one of those kickboxing moms. And you get in the ring, she's freaking going, she's unloading. And I have to, you know, I hold. We don't fully spar like you're trying to knock each other out, but you're going to connect some punches. And I connected a few on her and then she just bam. My eye and nose, I'm bleeding. Black eye.

And did you go down? Did you go down?

No, I did not go down.

All right. You can take a punch.

All right.

Okay.

It's really good. I did a self defense class and they said just start with boxing. Just know how to take a punch, throw a punch. You're going to defend your spouse's honor in a truck stop somewhere in Idaho from time to time. So. And anyway, we don't need to be talking about that today. That's just a little bit about our lives. And so it was fun.

Let me set the stage for the topic. So, you know, Whether you get COVID 19, you get punched in the face by a girl, you know, your life could flash before your eyes. We are not invincible. Okay? Everybody will die. We need an estate plan. And so. But we are trying to approach this from a different way today. Let me hit a couple stats. I think this is really, this is on everybody's mind. I'll just hit a couple stats. There's been a 76% jump in the amount of wills and trusts in the last two months that have been done. 76% jump. Life insurance sales have increased 50% over the last couple months. Everybody is realizing that, you know, that whether you've been affected or you're just starting to pay attention more realizing mortality and that you need to have a plan. Estate planning has become more and more important. We want to talk about all the different things that this plays into your life. From someone making a medical decision to who will take care of your kids. It's not just who gets your assets, who gets my stuff, you know, that's really important, but all these other things that tie into that, which we'll talk about in today's podcast.

Yeah, And I think, too, it's important to note that at this juncture, with 100,000 deaths and a lot of people that have been infected in the United States, all of us know someone that knows someone. You know, we've all had that. Well, that's my friend down the street, her mom or my person in my church and their aunt. You know, we've all kind of been touched by this. Some of you very, very closely that have been listening today. But we've all kind of experienced this. Oh, my gosh, if I got this, I could be dead in two weeks. Is my crap in order? And by the way, so many people think I got to be rich to have an estate plan. No, an estate plan is simply a will or a trust. We're going to teach you how to just do a will on your own, bare minimum. Just do it now. We think at a revocable living trust for many of our business owners and real estate owners, makes a lot of sense, but a lot of it, oftentimes it's because it's his, hers, and ours children. And I had a phone call yesterday. Matt, she had four kids. He had three kids. They got married and had one kid, and they were adopting a nephew. And I was like, steroids? What? Life insurance? Yeah. What happens if one of you die? What happens if both of you die? And it wasn't really about a lot of money. It was like, who's going to raise these kids? And that needs to be covered, too.

So there's so much going into it. And I'll say this. I think a lot of people have, like, recognized I will die someday, and I need to think about this and have bought life insurance. And maybe you're paying 50 bucks a month for your life insurance. If you've already made that decision, you need to have an estate plan, too. Okay. For one. Because if you do die, well, sorry, when you die for those. I'm not gonna die. It's if when you die, that insurance policy is gonna pay out, let alone your other assets, let alone all these other decisions we're gonna talk about. And so the minimum you need to have a will, you want to talk about the trust for most people that own a home or, like Marc said, own a business. But really important topic. It's. And I'll say this, too, it's one of those things. It's kind of a pain in the butt. I think a lot of people are like, oh, I'll get to it. We have so many clients, like, let's get going on it. And then they just stall out. And so but right now, maybe you've got more time on your hands. It's a good time to get a little more organized, get it done, make a plan. We're here for you.

I like it now. And I've even got a good story this week of another estate plan I'm working on of a husband that's died. Mom's still alive. And it's been very interesting, so I'll share that. Of how we're kind of working through some family bickering, and it's been kind of an ugly mess.

Okay.

But every week we do a tax tip and legal tip. There's a lot going on in the news. We're not going to talk about racism in the show. And there's a lot of great commentary going on with that topic and all of the protests going on. A lot of people just, I think, have cabin fever and are fed up. And this was a good thing to get upset about. And it's a valid thing to be upset about. So whatever. We're not going to be talking about that. But there are. There is more developments in the Senate, in the House, on the PPP and the CARES Act. Matt. So you. Is that your legal tip? You want to kind of.

Yeah, let me do the legal tip. And I'm going to play a sweet guitar riff before I do

a legal tip that you can actually use a legal tip where you don't feel like you have to take a shower after.

All right, so here is your update. We were debating, depending on whether this bill passed yesterday or this morning, we were going to do a show on this topic. Okay. And I've got an article ready to go for Entrepreneur. Like, we're going to be on it when this passes. And presumably it will, you know, nothing certain when we're talking about our United States government. The House passed a bill overwhelmingly, only one vote against it to. It's called the Paycheck protection program Extension Act. All right. And it does a number of things besides extension. Now it's going over to the Senate. McConnell, the leader of the Senate, the Republican leader. Republicans control. He's called the Senate leader or whatever they call him. I think that's what it's called. I feel like I'm talking about like Star wars.

Like, yeah,

I don't know what's they called the bad guy in Star Wars? The something leader anyways. McConnell. You know, you talk about Senator McConnell. Kentucky runs the Senate. He says they're gonna, they're gonna vote on it very soon. There's been a couple senators dragging it

out for some technical reasons.

But here's what it does. We all know on ppp, it's an eight week period. You get your loan, you got eight weeks to spend the money and then request forgiveness. This bill would make eight weeks, 24. That's freaking huge. That's three times as much that you have to use the money than 8, which would be really big because you're able to spend more of it and you'll be able have more forgiven. Of course right now it doesn't change your loan amount. Your loan is still the same. You get 24 weeks now to spend it. Now there's some baggage with this. The second thing that they changed in it is they said, alright, the 75% rule on how you must use 75% of the money on payroll costs. So whatever forgiveness request you make, 75% of that must be payroll cost. That's the current rule. They changed it and they said, actually we're changing it to a 60% rule, but it's 60% of the loan amount must be spent on payroll costs in order to get forgiveness. Well that there's a problem with that because the prior rule was 75% of just what you wanted forgiven. The new rule is 60% of the money you have to spend on payroll costs to even be eligible for forgiveness.

Yeah.

And so some people who maybe you got a hundred thousand dollar loan, but you can only spend 50 grand in your 24 weeks. Now you get more time to spend it. Let's say you can only spend it in 24 weeks, you're gonna get nothing forgiven because you didn't even hit the 60% payroll rule. But you're like, I was under shelter in place. I couldn't even open my 24 weeks clicked and I only spent 50 of it. Nope, zero forgiveness. And so that's what's getting stalled out right now is some of the Republicans are Like this is a mistake actually in the House's bill. You morons in the House didn't Change this. Right. 60% of loan amount. Come on. Okay, so. Which is what I'm saying. So the problem is the Senate's like, got it. If they change it, then they're gonna want to throw something in. There's gonna go back to the House again, and we're in this never ending cycle of, you know, the House wanting what they want in the Senate what they want. So it's stalled out right now, but McConnell said he's gonna bring it to the Senate floor, try and get it done. There's bipartisan support. There's just that one quirk. There's a couple other changes in it that are less important that might matter for some people, but those are the two big ones that's gonna affect everybody. Eight weeks is now 24, 75% payroll rule is changing to 60% of the loan. Must be set on payroll, cost of the loan amount, not your forgiveness request.

Yeah, and I just want to add this. Matt and I got in trouble too, two months ago when the CARES act was just coming out because the, there was a House version, a Senate version. They kept some of the House, some of the Senate combined it, signed it, boom, everybody's off to the races two days later. And it's complicated. So take what Matt and I are saying is just kind of food for thought. Interesting.

Wait, that's why I'm like not doing an article. Like, once the article goes, it's like, this is the law. And so we're ready. We're going to be on it. We'll be on it with an update on the podcast, of course, and maybe a live or something like that. It'll be a big, it's gonna be a big change. And I'll say this, it's good news, like your government actually is. A lot of times, a lot of times, you know, law comes and it's nice and people get excited about it and the government then like pulls the rug out from under you. That Congress is actually. Those are two things that actually be good as long as they clean up that loan amount provision. So.

All right, well, very good legal tip, Matt. And I've got a great tax tip. And I hope that again, many of our listeners stay around just for the tax and legal tip, and then they're, they're out. We in the business call that tapping out. Matt, when you're, if you're the cool

kids, you know, the cool kids call it dipping. That's at my car. Did you hear they call that a dip? You know, when you like, when you just like leave my kids like my college girls that my daughters. That's what I call did you dip that? That means did you like leave.

Oh, spiders call it there. I'm just tapping out.

So yeah, same thing.

Use that someday, man. In the. If you're in the industry. But I. So anyway, we hope that you'll stay around again for some of these estate planning twists that are really unique that you may not even see coming. But here's a great tax tip. A tax tip you can actually understand and won't put you to sleep. A tax tip that could save you thousand. Okay, my tax tip is, I think, really one of those orange life preservers that people throw out, maybe into the pool, into the lake. And we can visualize that now that it's summer. This is a lifesaver and I really, really want everybody to take important note of this, maybe even share this podcast with a loved one or friend or a business partner. In the CARES act, which Matt and I haven't talked a lot about, this specific provision, it allows for what's called an NOL carryback, a five year carryback of losses that occur between 17, 18, 19 and 21. They're saying if you had a loss in these years, you can go back up to five years and use that loss against prior income you declared and maybe paid tax on what that means. In effect, you're getting a refund for the prior years when you paid tax previously. So many of you and I know those listening here, your business may have been decimated. You may have a loss. You may be wrapping up your business and shutting the doors indefinitely for a while. I encourage you to listen to our podcast from four weeks ago where we talked about four options of saving or restarting your business, what to do. But if you're in the situation where you're going to have a loss this year and Congress anticipated this, you can take that loss and amend the last five years in effect, it's not really an amendment. There's a special form for it. It's an NOL carryback. But you're looking at your prior year returns. Now. Let me add another quick, important strategy to this. This. Some of you are still filing right now your 2019 tax return and you owe and you're freaking out because you're like, you know, normally, and sometimes people do this. I've been guilty of this many years is when I get my tax bill. Now I use some of My profits this year to pay the tax bill when I'm being smart and wise. Last year I was making deposits, so my tax bill this year is zero because I've already made all my deposits. But for many of us, especially business owners, that's a moving target. And so we might owe a little bit. So if any of you. Now here's the trick. If any of you are really worried and you think you're going to owe, here's a couple important tips. Still file your tax return by October 15th. Or if you're a business, September 15th. Don't worry about the July 15th deadline. Buy yourself some extra time. You're still going to have interest penalties for not depositing in April 15th. Well, actually with the extension, you have until July 15th. Yeah, yeah, you have until July 15th to cough up some money. But let's say you're not going to make sure you file, no matter what by September 15th and October 15th, even if you owe. Now, a lot of people say, well, if I owe, why file? Because the penalties for not filing are worse than the penalties for owing. So this is like that date you went on, maybe back in high school, or some of you living, flying solo. Last weekend you went on a date and promised you'd call them back, but you didn't call. Ooh, that's worse than anything is leaving them hanging. The IRS does not want to be left hanging. So make sure you file number two. If you're like, well, Mark, I don't have the money, you're going to have about 60 days or so to negotiate a little installment agreement or a payment plan. And that gets you into the end of 2020. Now you're in 2021. You hurry and file, you've got your loss, you carry it back to 2019. Now you don't owe for 2019.

I love that. Great idea. Because when you call, you actually they allow you to 120 day plan. So you can call and say, hey, I just need time. And then IRS agent is authorized to give you up to 120 days without signing anything or anything. They'll just note your file. They give you 120 days. I mean, that's was us. How many months is that?

It's three months. Three months. Yeah, yeah.

Form. That's four months.

Yeah, four months.

Four months.

Yeah, it's like 24 weeks, eight weeks and. Oh, sorry.

So that's cool. That, that, that, that's a great idea. File 2020 early.

Yeah. And if some of you are like, hold up, what do you mean? When you file your 19 return now, and you owe. Call the IRS by yourself four months and. Or just talk, negotiate, file and installment agreement, request, whatever you want to do. But then early in January 2021, hurry and file your 2020 return, which may show a loss. The minute that loss is shown, you can amend or adjust your 2019 filing. So now you don't owe 19 anymore. In fact, you may even be entitled to a refund, and it gets you out of the get out of jail free card for what you're owing right now. So if you time it just right, there won't be any pain with the irs. Very, very important.

Yeah, cool. Like it. All right. Strategic strategy.

All right, what are we doing?

State planning.

I think.

I think a lot of people have a misconception about what's included in the estate plan. Like, what do I need to think about? I die. But it's not just about dying. It's also about, like, becoming incapacitated. Like, think of all the medical conditions. Like, just looking at the COVID numbers, you know, right. There's been 108,000 deaths, but, like, 450,000 people, approximately, have recovered. Well, all those people went into a hospital. And we. You see this. Anybody that's dealt with elderly parents or grandparents, you know, they get to a certain point, some people have to start. Somebody has to start making medical decisions for them. Does that happen in a will? Nope. That any trust? Nope. It's a health care power of attorney that is completed that allows someone to make medical decisions for you if you're unable to make them for yourself. That's one piece of this. That's just nice to get done. When you do your estate plan.

Yeah, there's usually. I wish I had a binder here in my home office, but we've got a binder that goes out with every estate plan for our clients, that has a will, a trust, powers of attorney for finances, powers for healthcare. Pull the plug. If I'm a vegetable, I want to donate organs. Here's where I want to be buried. Here's some personal property, some final instructions, and we'd like to include some extra little folders and files so that you can put maybe Social Security cards, passports, deeds, titles, marriage certificates, all sorts of documents that you really kind of float around in drawers. Sometimes those can go all in one binder. So if something does happen to you, significantly, not even death. Right. But something does happen. Your family or your loved friends. Loved one, whoever knows where to go, get that off the shelf and can start piecing things together. Yeah.

And another thing on that healthcare power of attorney is we'll have clients call us like, hey, I'm going into surgery. The doctor, the hospital asked, do you have a health care power of attorney? Do you have a living will or advance directive that's like if you're in a vegetative state, do you want the plug pulled? And so these documents can come up later in life and you know, it's in the forms. When you're, you know, going into a surgery center stuff, you have these things. It's just nice to have be organized. And the reason the hospital or the surgery center is asking for that is there are some risks someone might need to make decisions for you when you're under anesthesia or you know, something happens.

Yeah. Yep.

I love it.

Now here's one place I also like to start for everybody out there. Over 50% of Americans don't even have a will. Now there's been a huge uptick in people thinking about this, so maybe got

finally under that 76% uptick. Yeah.

So, but all of you out there, we don't even charge. We don't even do wills or charge for wills. We don't do them for free either because we just tell you, go do it yourself. You can do what's called a holographic will. Print it out, write it up, get two witness signatures and get it notarized. That's going to comply in 99% of the states. I hate to say comply everywhere because I want to give the disclaimer, just double check your state and you can easily Google Ohio, Ohio holographic will, what's required and then you can do it. Send us a copy. If you're going to be a client of ours even someday in the future, we'll put it in your file. Even if we haven't started a full on relationship. Give it to your loved ones so they know where or tell them where it's at. But at least get a will. Everybody at least get a will. That's your homework this weekend. Now the trust or this estate plan is when you get all of this package. And I want to let people know it does not have to be expensive. And this is where we tick off lot of attorneys. Because our standard package, individual or married, 999 and you go, well, you get what you pay for. No, I did a 999 estate plan for a client of mine worth $30 million last year. Now we added some, I should say some AB trust provisions for a few extra hundred dollars because of Their wealth. But whether you're worth 100 grand or worth 100 million, we don't value bill. We may add some hours here or there to give you the special provisions you need, but I bump into clients all the time that have paid three or four or five thousand dollars for an estate plan. We don't. At least, at least. And we don't do that. And you may think, well, your estate plan is worse. No, we've been doing this 20 years. We've got over 60 years of experience with our seven lawyers here. We try to make the best kick butt estate plan you can find out. There's. And we throw the kitchen sink in it. Pets, guns, his kids, our kids, her kids, we throw it all in there. And so if you're like, you're too cheap, fine, yeah, go somewhere else, pay five times that. But it does not have to be expensive.

Yeah. So right. It does not have to be expensive. And I think. So the holographic will fill you on the day on the video, I was like, the holographic will is handwritten will. So. So you'd have to hand write that and sign it. That does not need to be witnessed or notarized. It's in your own signature, in your own handwriting. But it must be handwritten. You cannot type up a holographic will and sign it. So Mark's example is another version of just kind of your DIY will of type it up and then sign it and have it witnessed. And in some states a notary may be required, but the handwritten one is always valid in all 50 states as long as it's handwritten and then signed. So at a minimum, just do that. And I, you know, I had a case back 10 years ago when I actually did probate. I used to send a little bit of probate of a guy who did a handwritten will and then committed suicide. Really sad. And we represented the daughter and the estate and the family was fighting over everything. And I have to say, while it's better than nothing, it also creates a lot of problems, especially in that circumstance. Whether it's girlfriend involved, family involved. What did they really mean when they wrote this? It's one page. What about all this stuff that they didn't address? How is that handled? You know what I mean? It's just like you can see how when someone really needs to go use this, have a handwritten holographic will, or the DIY will can be a little inadequate. So having an attorney, whether it's us or someone else, help you through it. Or using a more extensive process that kind of asks you and prompts you from some questions, like we do in our questionnaire, is very helpful.

So, yeah, and when I say I'm not encouraging diy, but if right now, this is a hard year for a lot of people financially. And so I want to encourage you, do the bare minimum at least. And now we encourage the trust for several reasons. One, we want the trust to own your businesses, be the beneficiary of your life insurance retirement accounts, and of own your home, any LLCs that own real estate. Because the beauty of that is there's no public purview when it's all. When you pass away, there's no court, there's no lawyers fighting over things. The trustees follow the trust. Now, if some people want to be contentious and start a lawsuit, they can. But a trust is much more difficult to challenge when it's done properly. And there's no probate, if ever, if everything's in it the way it should be. You don't have to file a tax return for these trusts. You don't have to update it every year. You get a trust name, Use it when you go buy a new LLC or create one. Use your trust name, you go buy a new rv, put it in your trust, you go get some life insurance, make your trust the beneficiary so you don't have to update the trust. It's very easy to maintain and very, very affordable. I've got the same estate plan I did 20 years ago. And you're like, well, Mark, you can update it anytime. No, I haven't. Well, we wrote a few changes in after a family reunion that didn't go so well, but they could just do an amendment.

It's a one pager. It's easy.

You.

You amend it, get it notarized, done. So. But the will, what marks too, with probate is, you know, if you have just a will, or let's say you have no will at all, when you die, your family's gonna have to go to court to get your assets moved around, and that's a pain. It's more expensive than it would have been if you just did a will or trust. And no one knows what the heck you really wanted, so. Or who you wanted in charge or making the decisions. So it's a mess. You're kind of leaving a problem onto your loved ones. It's like, I love you, I'm gone. Figure all my crap out. You know, it's not cool. So at least do the will where you Provide a plan, but you still got to go to court. Or better yet, do a trust. Give a plan, say who you want to do it, and don't make them have to go to court to get it done.

Yeah. And some of you may ask, well, why do I need to do a go to court? When I did a will, I wrote it out like just Matt said. I wrote out who gets what. The problem is, it is better than no will because it takes more time in court and you get into these kind of rules of intestate. What does the state say? Where all my assets go? But if you at least have a will, you say, who gets what? But then the purpose of going to court is. Is for the judge to verify it's a legitimate will, to make sure was no one was holding a gun to your head or you weren't an Alzheimer having an Alzheimer's moment. And so that's the purpose of court, even if you have a will, but with a trust, just because of the more legitimacy surrounding it once it's executed properly, judges don't need to verify it's done. But I had an interesting case this week. Matt, I told you about a trust. Can I share it real quick?

Yeah. So the floor is yours.

So just to make a long story short, there was a grandma and grandpa. Grandpa, just someone 10 years ago, overdid it and did two different trusts. One for dad, one for mom. And they made different trustees.

Not us, by the way.

Yeah, not us.

Okay.

And sometimes we will do a trust for husband and wife, separate ones, but it's got to be a really good reason. So anyway, this. Some attorney did this to trust structure. And grandpa died. And there was assets in grandpa's trust. Mom's alive now, mom has dementia. And we have different trustees on the two different trusts. And they wanted to sell some property in grandpa's trust, but they have the same beneficiaries of both trusts. Oh, my gosh, everybody's so mad at each other. For the last five years, some family members haven't even talked. They're mad as heck. And they're calling me saying, we need you to be the mediator and just be the trustee of everything, just till we get it figured out. And I agree to regrettably, family friend, you know, all this kind of stuff. I don't want to make it too personal, but. So someone listening to the show doesn't like that. But of course, we do offer attorney client privilege here. But back to Matt's family. Oh, sorry, I didn't mean to say that. Joking. Not Matt's family. Anyway. So they called me up and said, can you be the trustee? And so we didn't have to go to court and we were able to just have all the beneficiaries sign some documents and say, yes, we want one neutral trustee. Soon as I get involved in this next two days, I should have full control. I'm going to combine both trusts, get all the assets renamed under the one trust, make sure everybody's going to get what they're supposed to get, and then I'm going to hand it off to someone else. But right now, they needed just someone to kind of bring it all together. Well, if you didn't have these trusts in place, no way mom has dementia. There's nothing you can't go do a will or a trust after you're disabled or after you're dead. So the saving grace in this situation was that they had done these trusts, even though I didn't like two of them, at least they had them. And now it's easy to fix. And when you're in a coma due to Covid or you've got dementia, you've laid out the law. And that's one of these benefits, too.

Yeah. What you would have to. If there was no trust, you'd have to go get a conservatorship appointed, go to court, have someone appointed as conservator for the individual with dementia that needs financial someone to manage their finances. That person have to file reports to the court and get authorizations from the court and go to court and file an accounting and all this. Oh, my gosh, that's such a. I've had to do that once. Such a pain. Very expensive. So this is just planning for a lot of little things that I think a lot of people just don't appreciate. Now, when you're healthy and you're younger, but when you hit that age or something happens in your life where you need the estate plan, it's so nice to have it there to cover a lot of these things, whether they're medical issues, assets that need to be sold, kids that, you know might need to be taken care of. If you have minor children. There's so many things that are just like the big things in life, quite honestly. I mean, these are the big things in life that the estate plan really tackles.

Yeah. One other thing, there's all these different ancillary benefits, because a trust, for those of you that are single out there, a trust can create a prenuptial barrier. In a sense, you can start accumulating your assets and not have to bring up the word prenup when you go out and maybe tie the knot with someone, you can have a trust that's already designated to benefit your children or your beneficiaries and be building wealth. And when you find that special one, you're able to say, yeah, a lot of my stuff is already tied up in a trust. It's irrevocable. I can't change it. It's already there. But we can build a new future together and we can build some new wealth together. But this trust is already done, and here's what's in it. Well done. Boom.

Fair, right?

Yeah. Now, if there's a divorce down the road, that's already off the table and you don't have to have one of those ugly meetings with multiple lawyers trying to do a prenup, that just strains a new relationship. So I really like the trust not only for disability, dementia, incapacity, death, but also the future future of a maybe new relationship and the ability to carve out assets.

Yeah. I think one thing that people appreciate too, is in a trust is the ability to have control of the money from the grave, really, you know, and put conditions on the money, you know, when you pass away. How do you want your estate to be received by your heirs, presumably your kids? Let's say if you have them, you

can wreak havoc on your kids. It's wonderful. They call it dead hand control comes out of the grave and just jacks up your kids even more if you didn't screw them up enough while you're alive. Now you can really do it with money.

Yeah. Yeah. And let us help you do that. Well, let's give a couple, like, good ideas, though. I mean, I think, like, right, a drug and alcohol restriction. If they have a drug or alcohol addiction, they're not going to get distributions from the trust. What if they're 20 years old? They're technically an adult. And if you died with no will or just a will, they would get their inheritance. But maybe in a trust, you're like, hey, when you're 20, if you're 20 when I die, I don't want you to get everything. Maybe you get a third when you hit 25, maybe another third when you're 30 and another third when you're 35. Or you can stretch it out however you want. Doesn't have to be thirds, whatever. But you can kind of let them inherit the money over time. Maybe you can only give them money for certain things. You can use the money for school or education or professional things or buying, starting a business or, you know, give them incentives. I have a client's. One of the last state plans I did with the client is he basically wanted his kids to continue on his real estate legacy. Built up a pretty significant real estate portfolio. So when I pass away, this kid gets these properties. This kid gets these properties. They have three kids. This one gets these properties. And I want you to continue to hold them. And, you know, the kids could do what they want. But he's like, I've really spent my time building his portfolio. And he outlines the rental income they get even in that. We kind of threw it in there so they knew. And it'll change, of course. And then there's some value differences, but it's like, hey. And I know there's some value differences because all properties aren't all the same price, but we'll set it up with the cash for the rest of the estate. So it's all fair. But it was. The client really loved the idea of not just like dying and here's money. It's like, no, here's the things that I spent my time building, the properties I've learned to love and that. That have created some wealth for me, passing those properties down to the next generation, which was, I thought, really cool.

And you may think again. Well, Matt's talking about, you know, thousands of dollars to draft this. No, we schedule an hour with a real attorney for you to design your trust in any state in the country. This is our annual special around May and June every year where we do it for 999. Or if you've got a very complex situation, multiple kids, marriage or property. Usually we'll go with the $1,500 or 1499. Deluxe is what we call it. So we have our standard and deluxe. But you can choose which structure might be best, which could include an hour or two hours with a lawyer designing some of this. It is done. We include all of this in the estate plan. In fact, what I love in our questionnaire is we have a two page now almost three pages long of ideas. And we have cool ideas that clients bring to us all the time. Kids have to maintain a certain gpa. They get this much for a wedding. They get this much to buy their first home. If they submit a business plan, they can get this. I've had some clients that say, any addiction, money is withheld until it's under control. It could be gaming, it could be drugs or alcohol, pornography. They could have criminal issues and they May say, if any of my kids have an addiction problem of any sort of giving them money isn't going to help. And so you can be very, very creative and do a good thing when you leave your wealth. Choose a charity, throw a charity in there for 10%. Lots of good things. Yeah.

So we're adding restrictions in, which also creates some incentives, of course. Right. For your loved ones. Another thing is think about your spouse too. Like, if you're married, you pass away. Your surviving spouse is going to carry on. Do you want restrictions on what they can do? Do you want them to be able to change the estate? Do you want to lock the estate down? Maybe a portion of it gets locked down. What if they're going to remarry? Are you concerned about that? Some people are, some people aren't. And there's not a right or wrong way to do it.

It's.

Everybody's a little different on that, you know? Do you like, let's.

I mean, I don't know.

That's a real question. Right. You pass away, do you want. Do you want to lock it down and say, hey, this is meant for our kids, or do you want to say you're surviving, you get to decide. Maybe you get remarried. I don't know.

I had a funny one, Matt. Where a client. And this is where there's a section in your binder. Well, and let me just. Two comments. First. Once you do it, you can always pull it out and amend it with any attorney or even by yourself once you learn the technique. And so most amendments to a trust, we want notarized at the bare minimum and oftentimes witnessed so people know what you're doing, but very simple to do. And so you can change these things as you come up with new ideas. Sometimes we get clients in this analysis paralysis where they keep thinking of new ideas and they're on their ninth version. Just sign the damn thing and then change it down the road if you need to. Sorry if there's kids in the car, but there's a dam race up here where the dam spilled water all over the valley 25 years ago. And they have a marathon around the damage and they call it the dam race. This year I'm going to be a dam volunteer and I can't wait to be at the dam finish line when the dam race is over. I'm so excited. So just want to throw that out.

Sounds like a damn good time.

Good time. So. But the other thing I was going to say is you can. Oh, I forgot.

We just got our Ratings on itunes. Moved to explicit. Thank you.

Did we?

Yeah, we moved up to explicit. Now

you were bringing up the spouse thing. And if you wanted to have restrictions

on your spouse, changing the estate or not, do you want them to. Do you want them to decide? Or is it locked down? Or do you want to lock down a portion of it? Or maybe you say you can't change the beneficiaries or you can only change beneficiaries.

As to this percent, I remember now. I remember now.

You're going to set the rules is one of the point I was making.

Yeah, yeah, yeah. And so what that. What's got my mind spinning at that and then I switched to amending it is in the binder there's a section on final instructions and burial instructions you can always change and modify and put in a handwritten note. Those don't have to go through the law firm. When you find it, buy your burial plot or whatever you're going to do. So I had this client was so funny. He was like, I've had a great life. And he goes, I don't want it to be a really bad thing. I didn't die prematurely in my teens or early twenties or something. I've had a really good life. I want it to be a celebration. So he said, I'm going to allocate 50 grand to a party. I'm like, what? He's like, I want these lists. He gave me a list of people and he said, I want all these people. The trustee is to buy him a ticket on the Caribbean cruise. He chose the Caribbean, the stops. It was his favorite place in the world, this cruise line, the islands it was going to go to. And he said, I want you cream. I want me cremated. And then the trustee is going to go drop my remains off the back of the boat after a big party. And I want you to read this, you know, blah, blah. You know, like, celebrate my life. Have a good life. Yeah. Like this little statement. You want red? And I go, well, who's going to do all this? Well, I'll have my trustee do it. And I go, well. And he said, I want you to be the trustee. And I go, can you. Do I get to go on the cruise? He's like, yeah, you get to go on the cruise. I'm like, all right, let's do it. This is a great idea. Yeah. Now, he hasn't died yet, so I'm still waiting for my cruise. But, yeah, do whatever you want. Good stuff.

Yeah, you got to set the rules. That's One of the cool things about the trust, so. And really like anything goes except for anything that's like, there's like a couple of things that people do try to do that are illegal actually that kind of like courts have not enforced. Like we had one client once wanting that. I had asked me, can I condition the money and say, hey, my daughter gets this money, but if she's still married to xyz, you know, bozo son in law that I don't like, she ain't getting nothing and she has to divorce him in order to get the money. But he wanted that written in there. I was like, now I'm a father.

Yeah, I don't have a problem with that. Keep going.

Well, it's illegal. Any, any provision that forces that against the dissolution of marriage. And that's a common one that's came up. It's, there's actually been cases on it that basically forces the dissolution of marriage to receive inheritance is actually illegal. So that's, that's one that I think you can do. But for the most part you get to set the rules. I mean it's your money, you get to set the conditions. You just can't do things that would violate public policy principles or, or criminal acts.

Of course. Couldn't you play with that one? Could you say, okay, my daughter is married to this guy I don't like. So I'm going to create her portion of the trust goes into an irrevocable spendthrift trust where she can have the cash from it like the earnings, can't spend the principal. And then at the end say if, if she's ever single in her life, she can access the principal.

Yeah, you could probably do that. That would get around it because it wasn't saying you get, you get this money if you get divorced. That would be a workaround.

Okay, all right, we're going to write that down. I got to put that I've got a son in law.

Yeah. So now remember the trustee, that's the person you're going to pick as Mark's. Given the example here of, you know, being the one that's distributing the assets. We've talked about that a little bit. And that's the person you put in control during your lifetime. You're the trustee or you and your spouse and. But then when you pass, you need to pick who's the successor trustee, who's the person I want to be in control of figuring out what to do with my assets. And these be someone that knows you would know your assets or could figure it out that you would trust, obviously. And that is probably good with finances. I mean, that's a good thing. They might be selling some real estate, distributing some money, getting some funds out of bank accounts or insurance proceeds or retirement account rollovers and inherited accounts mean they got to have some, some brains behind them in the financial space. That's the person you're going to pick as trustee. That might not be the same person, by the way, that you choose to be the guardian of your minor children if you have them. Those could be different. It could be the same, but they could be totally different people.

Yep. And I want to, before we wrap this up too, we've got. I want to hit pets and I want to hit guns. But I love that Matt just covered trustees and I'll just mention guardians. Matt, then you can choose pet or guns. You choose. But guardians. One thing we learned early on in our career, because we screwed up a lot of estate plans in our early years, you get the benefit of all those years of practicing on other people's estate plans.

So we didn't screw them up. They just, you know, you could do more cool things that we just didn't.

I don't know, I'm just playing. All right, so one thing that we learned was to not appoint a godparent couple. Like don't appoint guardians that are a couple because with the potential for divorce or death and divorce, I don't want to appoint my brother and sister in law to raise my kids because what happens if they get divorced? Now we have a custody battle over the appointment of guardianship, which is very, very odd. And it happened all the time in previous years. So we started to see this in cases and learn from it. Luckily, none of our clients had faced that. But what I recommend to people is choose a person, not a couple that you would have raise your kids. And for crying out loud, don't choose your 60 year old mom. She does not want to raise your grandkids. She wants you to visit and she loves your grandkids, but she does not want to raise them. Find someone your age, leave them a little cash out of your life insurance and find some person, not a couple that would raise your kids the most like you. And they don't have to be family. But don't choose your freaking 75 year old mom because she's the only one you trust. Go network, go join a crochet club or a, you know, knitting club and find someone that you trust.

You know, Is that where the motherly people are? Yeah, the Good parents. They go to crochet club.

And. Yeah, don't choose a bartender. Your favorite bartender down at the Marriott. You know, that's not who you choose to raise your kids. They could be great. Yeah.

Yeah. Especially the ones at the Marriott.

Yeah. Not the bartenders are bad. I'm just saying, you know, they work long hours. You know, they're.

They're gone nights. You know, you got teenagers, you know, who knows?

Yeah.

Be careful.

Okay. Guns or pets? They're. Roll the dice, baby. What do you want to do?

Pets. I'm gonna do pets because, you know, you're more the guy guy. So, pets, we got a section in your trust that you're gonna say, what's. Who's gonna take care of your pet? Like, who's gonna get your pet? Generally, I think if you got minor children, you want the pet to go with the children. That's always a great thing, you know, as the pets should go with the children. And also, you will. You know, you can state if there's an allowance of how much is being given from this trust to take care of the pet. Or maybe it's an outright amount. It's 5,000 bucks or whatever, depending on the age of your pet and their costs or needs, that you could just outright give to the person who would take custody of your pet as well. So with the growth of pet ownership in the U.S. this has become more and more popular. Many people have kids, too.

You know that one in three people have a pet? Yeah. And 50% of pet owners own a dog. That crazy.

That is crazy.

That's millions. And what happens if grandma dies and no one wants Fido? It's gonna get juiced up down at the pound next day. Have a plan. Sorry, got a little too visual.

That was a little strong. I think the way that they say it is, it's gonna go live with a family out in the country. That's how we explain it. What happened to Fido? Wouldn't have lived with another family out in the country.

Mmm, nice.

Like Old Yeller. Like Old Yeller. Yep. Roaming the.

Okay, now I'm gonna bring up guns. Now, I know some of you don't. Don't freak out or be mad. This same concept generally applies with a lot of different things. It could be titled vehicles. It could be all sorts of, you know, a piano, a Steinway, an expensive violin. When you have assets that you want to go to, specific family members, you really need to be specific about how you want them handled and how they're cared for. If you Want your expensive violin to go to your 4 year old? You've got to talk about who's going to be the custodian of that violin until they're old enough to properly handle it and take care of it. So gun trusts have evolved as well and safe gun ownership is. I'm an advocate for safe gun ownership. I don't own, you know, semi fully automatic assault rivals or grenade launchers or any of that, but I do live. So now this relates to my, my fighting that I've been doing lately. Okay, it's full circle. I'm bringing the show together baby. When I did this training, this corporate training on safety while traveling, we, we talked about getting some staying in shape, how to travel safely, how to not draw attention to yourself. We did a radio show on this about four months ago on Safe Travel and I had Christy Parker who was our resident international attorney. We did two shows, it was so much to cover investing internationally and then we talked about traveling internationally. And Christy's done a lot of travel, she's been like 20 plus countries and so it was very insightful. And she lived abroad as a lawyer in another country. So it was very. Anyway, go check that out. So in this training, this corporate training, they talked about self defense and fighting and that's when I signed up for my 10 classes in boxing and now I'm on my 20th class and ready to fight in Vegas and get my tent. But we also learned how to make a go bag. So this is my go bag. So if you're ever in an emergency and you need a, you should carry your go bag and it can go in your luggage depending on what state you're traveling to. And in my go bag I have a gun. So I got a gun, I got a flashlight, I've got my multi tool, gray tape, handcuffs which come in to help in many circumstances. And then I've got, you know, battery charger for my cell phone but I've got all this stuff that I can do. A go bag. So

you call it a go bag. I think the police would call that like this is like, this is like the literal smoking gun of evidence. Any crime happens in your town and you get like searched and you have that type of stuff on you. What's this guy got?

A flashlight, duct tape, a gun. Never know when you need to get rid of a body. I'm just saying, you know your brother in law could call you this weekend, Matt and go, dude, I need your help.

Bring a tarp and let me get my go bag. I'll be over.

Oh, my gosh, no. Hey, military guys know what I'm talking about. This is. This is totally. Because Matt, now that I'm in the industry, you know, I've only seen it,

like spy movies, but I like it. I like it.

I like it.

I just saying, like, the police, they could misinterpret this. Go back, because.

Okay, now. No, they couldn't. They're like, boy, that guy is prepared.

You got some zip ties in there, too, maybe.

Or we learned how to get out of zip ties. But I need to put some. I got some paracord. You know, it's okay.

Do you got, like, a candlestick, a lead pipe and a knife, too?

Just shut up. Okay, now, listen, here's my point. Go bag is. We covered the go bag in our radio show a couple months ago, people, where Matt did. Matt was not on the show to mock me. That. That's why I had Christy.

I wasn't.

Yeah, yeah, okay.

Would have not gotten through the show.

Yeah, no. Okay. So anyway, with a gun, if my son. Now, here's the big point with estate planning. And this is why gun trusts have evolved and having provisions in your trust for guns. Because my gun is registered under my name now, when I die, if I leave it to my son, it's got to get from here to three states away to him. And he's got a relicense in his name. If he does not relicense it, according to the laws of that state, within a certain time period, it becomes an illegal firearm. And there are arrests all the time. We had a paralegal in our office, her son had inherited a gun from his uncle. It was in the car, and he was driving to California and got pulled over.

Yeah.

And they said. And he was innocent. He's like a little innocent guy. They go, do you have a gun in the car? Yes, it's in the trunk I inherited from my uncle recently. They're like, really Open it up. It was a gun not even allowed in the state of California because it had too large of a clip. They arrested him right there. Now, luckily, their family attorney was able to call the prosecutor, explain the situation, showed that there was a valid will and trust where he had inherited this. He was traveling innocently, no prior record. They dropped everything. But he spent the night in the can because he wasn't thinking outside. That's what they said. I like that.

That's good.

Anyways. But anyway, so then. But a lot of this could have been resolved with provisions in a trust to talk about gun ownership and you can have guns actually registered to the name of a trust. So that way when you die, there's no re registration required. So anyway, that opens up a whole other can of worms. Now we charge separate for gun trust and there's a gun trust lawyer that we really like to refer to. But anyway, these are all things that people just don't think about. And Matt. So maybe I got a few tangents in there.

Yeah, yeah, yeah. Ran with that one for a minute, but that was cool.

That's important.

I always tell clients when I get to the like, you know, what's the personal property? Because a lot of people are like, you know, I got four kids, I want each of them to get a fourth. And a lot of people, it's just straightforward. And I recommend that for most clients, just do the freaking straightforward estate plan. Just get the bare bones done. Think about who you want to get. Put some restrictions in there. Who do you want to be trustee? Just get it done. The don't think about it for a year. Some people are like, well, I don't know, maybe I should do this, maybe I should. I want to think about it. Just get it done. Come back and change it. But one thing I'll always flag is say, think about the personal property. You own a boat, maybe with your brother. Okay. When you die, is your brother gonna get it? Yeah. Yeah. Okay, let's think of some personal properties. Maybe it's the guns. Maybe you want some particular member of your family to get the guns. Maybe it's a musical instrument that someone else, one of your kids actually plays. You would want them to get it, you know, or there's art or things like that. So there's certain personal property items that a lot of people are more specific about. They want that specific item to be passed down. And so that would fall in the category of guns. And we. And of course that would be in your trust. We've got a section for that to designate who gets what personal property.

Okay, Matt, I'm going to leave you my go back.

Yes. I'm not going to California with it.

Yep. Or New York, New Jersey, dc. Stay away from those states that are not too excited about new guns in their city. I want to finish with this last example too. We have so many clients that we do their annual company maintenance. If you have an LLC or corporation, you should be doing annual minutes, making sure your, your little LLC does a little member meeting. It's a great tax write off and you're in good standing with the state. The deed to your rental Properties in your llc. We have our whole little team that takes care of that. Becky Lloyd doing the maintenance, Mallory Warner doing your deed transfers. Let's make sure it's where it's at. But I want to remind you, next time you do in your minutes and you go, oh, I'm the owner of my llc. If you die and that LLC owns rental property, it's going to go through probate. The judge is going to have to say who gets the llc. And now your family's got to pay lawyers to get involved to deal with this property, where the manager of the LLC is now dead, which is you, and the owner of the LLC is you, who is dead. So now you've got a problem. You just can't move property around at that point. So this is where, when we set up your trust, we give half off to our clients to get some of those little transfers done that are normally 100 or so bucks, not that expensive. So we do it half off that even. But Mallory gets in touch with you and says, hey, let's transfer your LLC into the trust, so if anything happens, your rental property goes where you want it done. You don't have to update it. It's done. That's. That's another good example, too. Yeah, right, man. Take us out. You're the man.

All right, well, thanks, everybody, for listening to another amazing episode of the Refresh your Wealth show. I think it was. Remember, we do have a special on estate planning. If you want to get it done. That's from May 15th to June 15th.

Ish. Maybe we can get Senator McConnell to give us an extension. We can, in a few weeks.

Yeah, yeah. Just get on it, though. You know, if you. If you want to do it, go to the kqslawyers.com webpage. There's a right on the homepage. There's a more information on it. You can sign up right there to get the special pricing and get going with the consult. Get our questionnaire or just get it done yourself again. We get it, don't you? Don't use us. Maybe use another lawyer. Do it on your own. The basic bare bones thing that Mark talked about. But just do some planning. We are all, unfortunately, gonna die someday. We just want to have a plan about it, be proactive so we don't leave a mess for our family members who have to pick up things from behind. See you next week.

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