#139 8 Ways To Protect Your Family's Future

Hey, everyone. Today we're going to be talking about the eight things you need to think about to protect your family in case something happens to you. It's also called estate planning. We're going to talk all about it today. Stay tuned. Welcome to the Passive Income MD Podcast, where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now, let's get on with the show. Foreign. Now, thinking about your own mortality is not something I typically do because it's definitely not fun. I like thinking about possibilities. I'm an optimistic person and I like planning my future. That's a lot more fun for me in my book. I don't know how it is for you. However, over the last several years, with everything going on in the world, estate planning has definitely been on my mind. There's been a lot more uncertainty and I've aged and I've seen a lot of different things happen over the last couple years that have made me think about it. Now, what happens to my family if something unexpected happens to me again? Don't get me wrong, I expect to live a long life trying to take care of my health, take care of my diet, my exercise, my mental health, all of that. I really made a priority over the last several years. But I know there are things that I can't control now. There are things I can control, and that's what we're going to be talking about today. That's called planning for your family's future. That's otherwise known as estate planning. My goal is to get everything in order, so if something does happen to me, my family is protected. I want to be able to sleep easy at night knowing that if there are things out of my control, they're going to get taken care of. Maybe you've had that consideration as well. So we're going to be talking about 8 things you need to know and at least think about when you consider planning for your family's future. Number one, a living trust. A living trust is simply a set of instructions for what happens to your assets after you pass. Now, many of you have heard of a will. I thought those two were the exact same things until I got educated on the subject. A trust allows you to assign a trustee, someone who will take care of your beneficiaries, make sure that the assets get split up according to your instructions. Now, trust has three major benefits. Number one, it allows you to avoid something Called probate court. Now, in probate court, if you didn't have a good set of instructions for how your assets were going to be distributed amongst your beneficiaries in the form of a living trust, then it will go to court, which can be quite expensive, can be timely, can be tough for the rest of your family to go through. Now, just having a will, unfortunately, still means that oftentimes your family has to go to something called probate court to figure out how all the assets can be split up and distributed. Even with a set of instructions, you got to look at your state laws for that. But having a living trust will help you avoid this costly and timely procedure. Number two, if you have a living trust, your assets can be passed along in private. Now, with just a will, oftentimes it still goes to court, and a lot of those assets are transferred in a public manner. You want to maintain anonymity, some privacy. When it comes to your assets, definitely having living trust is the way to go. Third, a trust can take effect or go into place or go into action in times when it's not even just a death. For example, if you're medically incapacitated, oftentimes, maybe a court will assign somebody. But with living trust, you can have somebody assigned up front, and that person could take over. What happens to your assets in the case that something happens to you? Ultimately, will can be important to have, too. So it's important for you to to seek counsel of a trusted estate lawyer who can help you make your decision. Depending on where you live, the type of assets you have, and as well as your beneficiaries. I personally set up that living trust so that everything is outlined. If something were to happen to me, I know exactly how that's going to be distributed and who's going to be in charge of that. If something happens to me, I can rest easy in that scenario. Number two, you want to have an advanced directive and a medical power of attorney. Now, as physicians, we know this area all too well. I'm sure many of you, whether in your training or, or even in your work, have had to deal with something called power of attorney. It's simply a form that you fill out so something happens. You have these directives, and you guys all know this. To have those directives, something happens to you, how these decisions will be made, and who will make those decisions. Number three, organizing your documents. Now, I'm not the most organized guy, but do you know where all of your documents are? Things like deeds or important letters, important documents, birth certificates, all of these things, if something were to happen to you, uh, people needed access to this. Where could people find all of these documents? Now mine were all scattered. They were all over the place. Different file cabinets. Some were scanned in, some were digital form in different folders. So I started creating like a digital vault, a digital vault that has an electronic copy of all of this important information so that this can be placed in a very safe place with password protected, of course, so that my loved ones, if something happened to me, they can have access to that. There are plenty of lists online that will list all of the major documents that you need to look after and have in a vault like this. Sometimes your financial advisor or CPA will take care of some of these documents for you in case something happens Next. Passwords. There are passwords for everything. How do we remember all of these things? But if you can't remember, how are your loved ones going to remember if something happens to you? Whether it's bank account confidential information, getting into some of these online storage vaults for your documents, even getting into your computer, all of these things, are they going to have to break into this stuff? Become professional hackers to, to try to get access to all of this. Don't wait on this until it's too late. Now I use a password keeper, something called LastPass. There's something called 1Password. All these things allow you to have a master password to have access to all of your other passwords. Now, I know this can be dangerous for some people. If somebody finds out your master password, they have access to all of your online passwords. Now there's a formula to it. How many digits, how many symbols that you can make it. For something that you can remember is extremely hard. And for you to break. There are apps that can be directly put on your computer and mobile app that can keep it extremely secure so that again, if something happens to you, your loved ones can go in there and access to all of your files. All of your passwords begin to be able to get into all of the confidential information, especially the financial ones. Otherwise, what you don't want to do is have all your passwords be the same across all of them to make it easy for you to remember. That is another thing. When I use one of these password keepers, I'm able to set these really complex passwords so they auto fill it for you so that you don't have to remember, so you can make it a little bit more complicated, make it difficult for people to hack into your especially confidential information. Next, you want to have organization of your investments if something happens to you. People want to know, what are all your assets? What have you invested in? If you've invested in syndications or angel invested like I have in many companies, in dozens and dozens and dozens of these passive investments. It's hard for someone to know exactly what your investments have been. Your CPA should know. Year after year they're doing your tax returns, they're getting those K1s. But it'd be nice for you to have somewhere where it's all organized on a list, on a sheet for someone to be able to find if something happens to you. For me, that's really simple. I keep it on an easy Excel file that clearly states what that investment is. I put that into my document vault and it's stored there in case something happens to me. And the last two have to do with insurance. Number one, life insurance. I think that's an easy one. We all know about life insurance. It's not a foreign concept. I'm assuming everyone here has life insurance, but you never know about my first policy. My wife and I first bought our first home. It was a term policy for a set amount of years. For a certain amount, it was there. So if anything happened to me, I knew that my wife would be okay financially. As I've gotten kids, as my assets have grown, as my obligations have grown, I've actually bought additional policies to make sure again, financially, worst case scenario, something happens to me, everyone is protected financially and that nobody has me in financial hardship. That's an easy one. Just find your insurance agent, figure out whether you have the right amount of coverage, considering your assets, your age and all your dependents. And lastly, disability insurance. Of course, there are other things to consider besides death. Personally, I know some people have gotten injured outside of their day job and some inside where it's really impacted their ability to work and do what they need to do. Now, many of you listening or watching this are skilled people. You use your hands, and if something happens to your hands, then it really impacts your ability to do a good job at your work. I'm an anesthesiologist and I put in epidural, I put in IVs, I will intubate. But if something were to happen to my hands, I wouldn't be able to do that. And that would limit my ability to be an anesthesiologist. And it's not like you just go back to med school and become an internist. You have to go through residency and things like that. That's why it's essential for everyone to think about specialty specific disability insurance. Yes, that's available for you. If you can't perform the narrowly defined duties of your current job, they will actually pay you for that. They will not assume that you can just go back and work in any other profession or we all know that that's not really realistic. Now that's something I got very early on. I was recommended that because if injuries happen before you get insurance, oftentimes those things are put as exclusions on your policies and you definitely don't want that. Now again, contact your independent disability insurance agent to help you figure out what policy you need, what should be covered, and what makes sense for you. Now if I want to rest easy at night, this is something that I recommend to every single one of us. Watching this or listening to this, especially those who are physicians and high net worth individuals. Making a plan for if something happens to you, if you died is not a pleasant thing. But you know what's not pleasant as well? Losing sleep. Thinking that if something happened to you, your family wouldn't be protected. I want to know that if the unpredictable happens, my family's well being is taken care of. I can rest easy. This has not necessarily been an easy process to figure all of this out. Using this as a checklist, you can make sure that you get all of the major issues taken care of. And then again, you can rest easy. In a funny way, preparing for death. Preparing for this type of situation actually allows me to live my life better, to live a more enjoyable life, because that is the ultimate goal. Enjoy life with the people I love. Thanks so much. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, make sure to hit subscribe. Are you part of our community yet? Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. You can join us on our Facebook group Passive Income Docs and you can always learn more at our website passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.