This is Legacy Planning (Ep. 9)

Welcome to Ideas by Mike, the podcast with Mike Milligan, where you will find one-of-a-kind financial planning advice for your one-of-a-kind life. With over 22 years of experience as a certified financial planner, Mike shares experiences and advice on crafting simple, easy-to-understand financial plans based on your values and priorities. He believes that taking a personalized approach is the best way to prepare for the future and give meaning to your finances. So follow along as Mike, and from time to time his guests, explore different strategies and tools that could help you secure your financial future in retirement. Now on to the show.

Hello and welcome to the Ideas by Mike podcast with your host, Mike Milligan. I'm Wendy McConnell. Hi, Mike, how are we doing today?

I'm doing great, Wendy. How are you doing?

Oh, I'm good, I'm good. So today we're going to be diving into the 5th and final segment of the 5-step one-of-a-kind financial plan, and, um, today we're going to be talking about legacy planning and the innovative tool Snug. But before we dive in, let's recap. Mike, can you briefly explain what the one-of-a-kind financial plan is?

Sure, Wendy. Our one-of-a-kind financial planning process is really derived from the fact that everybody lives a one-of-a-kind life. There's no 2 people living the exact same way around this earth. Nobody has the exact same goals. Nobody has the same dreams. Family dynamics are different. But in order to have a one-of-a-kind financial plan, you've got to have 5— there's 5 different elements that we look at. The first is tax planning because taxes are the highest expense you'll ever have in your life. And we want to get a grasp on what those expenses are actually going to be. The second is retirement income planning. The thing that retirees worry about the most is running out of money. So, having a consistent stream of income in retirement, even when you're not working, is important because it takes the fear of running out of money away. Next is investment planning, mainly geared toward risk management. You know, making sure that your money is there when you actually take it. We, you know, last podcast, we talked about long-term care planning, which is not long-term care insurance. And we talked about our tool, Halo by Genevity, where we can, within some degree of accuracy, show what your life expectancy is, but also what your health expectancy is. And then we could plan away. And then today we're going to talk about legacy planning, uh, which is— which I think, uh, is the bow that goes on a financial plan because it's the one that, um, that tells your family how much you, you love them and how much you care for them. It shows how organized you were in life.

Okay, so, um, previously though, we discussed the crucial role of proper long-term planning in the The potential risks of not having a strategy in place, uh, not just for you, but for the entire family, like you mentioned. So, if you haven't listened to that episode yet, be sure to check it out.

Yeah. So, now let's talk about what goes hand in hand with disrupting your financial life and that, and that of your family. And that's the failure to plan, uh, from a legacy standpoint.

Right. So, what exactly is legacy planning? Now, many people think of legacy planning as just writing a will, creating a trust, but It's a lot more than that, right?

Yeah, it definitely involves a will, trust, you know, will, trust, power of attorney, healthcare directives. But it's also taking the financial and personal steps that you need to design the estate to protect your assets and pass not just your wealth, but also your values, your beliefs, and the family traditions that you have. You know, like, for instance, in my family, my grandmother was the keeper of all the family recipes. And when she, you know, lost her mind, she was no longer mentally here, a lot of those recipes went by the wayside of her mind going away. But so, it's not just about the assets, it's about the family knowledge. Did you know that an executor or trustee spends about 500+ hours cleaning up Messy estates.

Yeah, that is a, a lot of hours.

Yeah. And 43% of families report conflict due to poor planning and lack of communication.

Yeah. Yep.

Uh, death, death really gets a bad rap. And, uh, planning for it is morbid. Talking about it is taboo. Snug, the system we use, Is it is there to help people put down in writing what their last wishes are, how they want their family to stay connected. It is not just paper, right? It is the planning tools that are used to create connectivity between your life and your death and to keep your family connected. To keep your family harmonious.

Okay, so what should we be doing? Tell us more.

Well, I'll tell you a story, if that's okay. Let's just imagine, and this is a story that happens quite regularly, you know, and it happens, you know, families typically get together around holidays. And so imagine 4 generations gather around a dining room table. And, you know, they're just talking about fantasy football teams. And they're, and they're wondering if this is, you know, like a grandparents or, you know, grandmother, grandfather's last one. Because that's, you know, that's the reality around a lot of these is when you have older family members, you never know when the last time you're going to be with them around the holidays. Well, in this case, let's say it was his last one, because 2 months later, in a bad fall, ends up in the hospital.

Wow.

And the family watches Grandpa, you know, in— he was, you know, he was, he was in a coma, wondering what he would want. So, they make the difficult decision to remove the life support. He passes away peacefully in hospice. Over the next few weeks, his son and daughter scramble to piece together the puzzle. Did he have a will? You know, what is his iPhone passcode, right? Who should we invite to the funeral? Where is his savings account? What town was he even born in? Because that's that question, right, that is often needed to answer or to get through to financial companies. Do you know the stress that that can cause a family? Because generally, those who are still living, who have to clean up the mess, are still working, and they still have lives. And they're also dealing with the pain that goes with losing a loved one. So it's, it's, it could be a very difficult decision, or a very difficult process, if the living do not plan for those they love.

Yeah, so it's just adding chaos on top of the grief that everybody's already feeling.

Yeah, Wendy. And you know, the thing about it is, is Death, we just don't talk about it enough, but it's inevitable. We all are going to die. It's not like one of these things that's, that's iffy, right? Like, you know, you know, will my team win the Super Bowl, right? Or, you know, you know, will I— you know, there's a lot of things that are, you know, can go one way or another, but death is not one of them. Death is going to happen. But, you know, the longer we wait to plan for it, the harder it becomes to get things in check. Now, imagine this. The 4 generations gather around a Thanksgiving dinner table, and they're still talking about that fantasy football, right? And here's the thing. When the grandfather's there, instead of You know, he's laid out perfectly his estate plan, right? The son and daughter know exactly where it is. And, you know, they, they get to then talk about stories right around the dinner table. But when he goes into the coma, he has an advanced medical directive that removes life support 48 hours. It's not a decision that the son and daughter have to make any longer, right? And then he passes peacefully in hospice. And then as the son and daughter, instead of having to gather and scramble to do everything, they just start executing the plan that their dad had put, right? The Snug account and the Snug platform for the will and trust becomes the command center. It's where they can go, the kids can go. To have the will analyzed, to get the necessary copies and documents they need to go and start the probate process. And there's even what they find in there. There is in Snug, you can pre— you can write your obituary, right? And then let your family kind of edit it a little bit, but it's already written. You take the stress out. And then there's— you could also put things like your eulogy. based on your personal history that can be given to the priest or the pastor or the funeral director to build that. That's the value of the planning is you can take stress off of your family late in life.

Yeah. And it's so much easier for everyone involved. So, that's why it's so important to have a plan in place.

Yeah, Wendy, I think there's— not to go all philosophical, On us here today. But I— and this is not even a religious comment, more so as it is just like a personal belief I have— is I believe we all die 2 deaths. There's the death of when you physically die and you're no longer here. But then there's, there's that death when you no longer exist on earth, when your name is no longer spoken. We've had You know, we've had billions upon billions of people who have lived on this earth, and history remembers few of them, right?

Right.

But if you put a legacy plan in place that can keep your memory alive, at least in your family, right, by passing down the family secrets, right, whether those are recipes or the family stories, right? And the longer those are around, the longer your true legacy, your impact on this earth, uh, stays alive.

So, what advice do you have for listeners regarding legacy planning?

Well, it's got to be well structured, first of all. Um, we, we go back to look at what the one-of-a-kind plan is. And so, can we reduce taxes, uh, and the cost of administrating the, um, the plan, right? And if we can do that, We just execute the will and the trust there. It ensures that more of your wealth is passed on to those you care about rather than being eaten up from the IRS and from attorneys. And so it's just, it's a matter of organizing, right? So a well-structured plan that's organized is going to help reduce taxes and reduce costs.

Because you really want to make sure that your family gets as much as they possibly can without paying all of these fees.

Yeah, you just have no idea, Wendy. You know, beyond the— I mean, just the amount that is lost, right? So, I told you that the typical estate plan can take over 500 hours to settle. And a lot of times attorneys get involved in that. And when they do, you know, the billable hours just rack up. And it ends up instead of money going where it was intended, it goes to attorneys and lawyers. And so, and then it's just so beyond just the money, the assets, legacy planning is just going to include instructions and wishes about how you want your family to carry on certain traditions and values and how you could even, if you have a family business, how that can keep going on.

How do we go about addressing this?

So, you've heard me reference Snug in here a couple times. So, we use a tool called Get Snug. It helps to make the process seamless. All the information that's needed, the contact information, passwords, financial advisors, financial statements, everything that's needed to execute is kind of gathered in one place. And then, it generates a will and a trust that then needs to be witnessed and signed that lays out those last wishes. And then, it gives, you know, it allows somebody to put in there things that are meaningful to them, like memories they want to pass on, the eulogy that they wish to be read, the obituary and how it should be written. You could even put personal notes in there. that could only be shared with your family upon your death about how much they care, right? There's nothing that says you are meaningful to me that in a time of stress, you can still tell somebody you love them. Well, that's the thing about when you die, you really can't tell somebody you love them unless you leave something behind that expresses that. A well-organized estate plan with some letters and some thoughts will do that. Did you know, Wendy, that 73% of people do not have an estate plan, it's often because they're just not sure how to start one, or they don't feel like they have time. However, you know, nearly 90% of people who go through the process found out how, how simple and straightforward it could really be. And it's really not that confusing when it's part of an overall financial plan that we call a one-of-a-kind plan.

Yeah. So, you are not only a Certified Financial Planner, you're also a professor. So, does your perspective differ when it comes to these roles?

Well, legacy planning changes over time, right? And it's different as a planner because it's not just dollars and cents. It's about the experiences and family traditions that you pass down. These are the 2 things you won't find written in an academic book. It's those non-tangible things. So, when we talk about it from a professor standpoint, it's just, it's a little bit different.

So, from the professor's point of view, what is the academic consensus on long-term care insurance?

Well, academically, the consensus is clear. As a professor, we only talk about the theoretical stuff. So, You know, wills and trust and power of attorneys. From an insurance standpoint, you know, we always say insure things that you are not 100% verifiable that you can cover yourself. And so that's, I mean, from an academic standpoint, we, we try to take some of the emotion out of it and just use the products and tools that are available from, from, from that standpoint.

And is the answer the same or different as the CFP®?

It's going to have that same theoretical academic side, but we always have to put a spin on it, right? Because my job is to ensure that the money lasts as long as possible. And part of that is, from a CFP® standpoint, is also that people realize That they are not, you know, a typical textbook. They are one of a kind, and they have hopes and dreams that are different than everybody else. Academic tries to put everybody, you know, you know, put everything together, you know, to be able to create averages and statistical means and medians. The thing about, the thing about every person that we plan for is they are a case of one. So their average is what they dictate, but it's also their everyday life. Because when you're living a one-of-a-kind life, there's nobody else you should compare yourself to. You should compare yourself to exactly who you are and what you want, because nobody else— and you know, no, nobody else can live like you live. And when you put a plan next to it, you can really execute that one-of-a-kind life.

Mike, as we wrap up, what final thoughts do you have for listeners?

You know, on the legacy planning piece is the one that goes unfulfilled in everybody's overall planning. People want to talk. I mean, when you tell them about tax planning, yes, Mike, help me pay less taxes. to the federal government. I'd love to do that. Whatever strategies you have, let's do it. From retirement income planning to take the fear out of retirement, people love having that conversation. The investment planning, the number one thing that financial planners talk about is investment planning. Everybody loves to talk about the stocks that they blew out, hit out of the ballpark because they picked it at the right time. And even long-term care planning, people love to talk about like, Or adapt or will talk about like the end of life there when it comes to like taking care of themselves because they've experienced it with like a parent or an aunt or an uncle. But this piece, this legacy piece, is the one that really shows your family how much you care about them. Because if you just take a little bit of time and it's the one that is the most neglected, Wendy, when I, when I talk to Our prospects and even our clients who are in their 30s and 40s and 50s, and even some that are in their 60s and 70s, you know, they just can't imagine not being here. Like, they can't imagine dying. I mean, because everything their mind has ever known is that I have tomorrow. It's one of the most interesting things, right, is that there's, there's people who die every day with appointments on their calendars for tomorrow and the next day and the day after that. And so, legacy planning, wills, trusts, putting things in writing, passing down the family values, telling people that you love them. I can do that tomorrow. I don't have to do it today, but I'm telling people. And this is why to have a comprehensive financial plan, I think it should be a one-of-a-kind plan. But a one-of-a-kind plan cannot be 80% done. This is the part that when you do this, that when you execute the will and the trust, when you put down what your obituary is, when you realize that your legacy is more than stocks, bonds, mutual funds, IRAs, a house and real estate, but it's about also what you believe, what you feel, and what you could pass forward, and you get it down, it really gives you the ability to live A deeper, one-of-a-kind life. Because you know that at the end, if something were to happen to you, your family's still going to know that you cared about them because you took the time to organize your wishes and your thoughts. You left behind not only those monetary things in an organized fashion for them, but you're also leaving behind some things that mean something, like your thoughts, how you feel about them, letters, some of the best stories I've ever seen on people who have executed their legacy plans. You see them over time, 3, 5 years after they pass away, when all of a sudden, a letter shows up to a grandkid that says, I couldn't be at your college graduation today, but I wanted to make sure you have this. And it's a gift. for them, or it's just an expression of love. But see, that's what wraps— the legacy planning piece is what wraps up the one-of-a-kind financial plan. It's the detail that makes sure that not only what you've built from an asset standpoint and you're trying to grow and protect from there is there, but it's also that your family knows you love them enough. Okay.

Well, make sure to join us next time as we continue exploring the one-of-a-kind financial plan. Meanwhile, Mike, how do people get in touch with you if they have more questions?

Yeah, so anywhere @ideasbymike— Instagram, YouTube, LinkedIn— you can find @ideasbymike. You go to our website, ideasbymike.com, and on the website, you can contact us directly there.

Okay, great. Well, thank you for listening today. Please like, follow, and share this podcast with your friends. Until next time, I'm Wendy McConnell.

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