Episode Transcript
[00:00:00] I want to welcome everybody who's here in person. I want to welcome everybody who's here on YouTube with us tonight. And this is going to be a quick little program.
[00:00:08] We're just going to talk about wheels versus truss.
[00:00:11] Everybody at home is seeing on their screen the presentation, and maybe me in the corner, not sure.
[00:00:19] I keep getting a little dark. So I'll turn up the light here and you guys can see the screen over there.
[00:00:26] Sometimes I may write something up here if I think about something I want to write or draw as a illustration for you.
[00:00:35] Hold questions to the end, except if you're online, just type the questions in the comment box and we'll get to them at the end because I don't want to keep everybody here all night. And then also afterwards, we'll be available for questions. If anything is still in your mind that I didn't answer, we'll have it there.
[00:00:52] As I said, we're talking tonight about wills versus trusts. A lot of people ask us, you know, what's the difference? When do I need which one?
[00:00:59] Why would I need one over the other? And some of you, I know a lot of you in here already on the YouTube, already have wheels. You already have trusts. But I hear from a lot of people, they're really old and things have changed. So we will talk a little bit about how those are all updated over time as well, how we, how we do that.
[00:01:21] First, a little bit about me.
[00:01:24] I'm a lawyer.
[00:01:26] Everybody should know that by now.
[00:01:28] But we focus on asset protection and we really focus on our clientele. Our clients tend to be real estate investors, a lot of people with a lot of real estate.
[00:01:39] Also, we do a lot of what I call home services companies, electricians, people who own electrical, electrician companies, plumbers, pool cleaners, landscapers, H Vac companies, just about anything like that. You can think of carpet cleaners, because we found that they tend to also own a lot of real estate. Plus they have a lot of liability issues that they are. They constantly have a lot of trucks on the road. So we work with all of those kinds of people in addition to people that just own a lot of real estate.
[00:02:15] I have been practicing this my 30th year. I started in 1996.
[00:02:20] Feels like a thousand years ago, but I've been practicing for 30 years. I started out doing personal injury medical malpractice.
[00:02:28] We called it threshold law. If you could cross the threshold, we took your case.
[00:02:33] It was a small firm in a small town, and we would just do a little bit of Everything. Family law, criminal defense.
[00:02:41] So I've done DUIs, speeding tickets, bankruptcy, divorces, custody battles, all kinds of stuff over the years. And of course the car wrecks and slips and falls and stuff like that. So I worked from the other side of the aisle as well, where I was actually suing everybody since then. In 2000, 2001, we moved to Florida and I really focused on real estate and business and that's where I've been ever since.
[00:03:14] And worked in title for a long time, about 25 years I was in title.
[00:03:19] Got out of title in 2022, the end of 2022, got out of that. But I understand title, which helps a lot whenever we're doing all this, because a lot of estate planning attorneys out there and family law attorneys and everyone else, whenever they see real estate cross their desk, they sort of freak out and panic and go, okay, well, I don't touc.
[00:03:41] So they end up sending them to us to handle all of that. So doing the estate planning sort of fits in perfectly hand in glove with the real estate, the structuring, asset protection, everything else that goes along with it.
[00:03:55] So that's why we redo all of this again.
[00:03:59] We've written a book, if you came in the front door.
[00:04:04] Land Trust in Florida is the big book. We're on the 11th edition of that. Mark Warder wrote the first 10 I edited and brought it up to speed, brought it up to date with the 11th edition in 2024. Yeah, I'm trying to think. All the years start to run together.
[00:04:22] So we do have said on the last two subcommittees for Florida Bar, where we did rewrite the land trust statute in Florida, chapter 689.071 and 689.07.
[00:04:35] We read those. So I really focused on that a lot and really know a lot about the land trust, which a lot of people don't. We do some crazy. We do some crazy things with that.
[00:04:46] So one of the things I want to talk about is why this conversation matters tonight, why you really need to be thinking about your wills versus trusts. Again, I know a lot of people who are our clients, a lot of people who are here tonight, you're probably on the trust based plan. You probably already have a trust, so you, you've had that. But the number one reason that we focus on trust based plans is because the trust forms this really n nice foundation for everything else that we do for you. When it comes to LLCs, land trusts, all these other structures, even family member partnerships, other things that we lay over to protect you from creditors and people trying to sell you from both outside as well as inside of your assets.
[00:05:34] We use ultimately everything flows through, usually to a radical holding trust, so that it protects your family from having to go to court whenever you're gone or if you become incapacitated, the trustees just keep on going. You also get a lot more control over how the assets are handled. It's sort of that hand from the grave, directing your property, your wealth after you're already gone. It's telling your trustee what you want your assets to do in timing and everything else. Whereas a will, it's just going to tax drive to them. Also, it avoids a lot of delays. And we're going to talk about the probate process, how long it takes. You can have to prove that. Also stressing conflict, not to say there's no conflict with trusts. There can be conflict with trusts as the Jimmy Buffett case, the David Siegel case can show us right now how those are tied up in court over those multi hundred million dollar trusts that were left for the spouses and their children. They're all in litigation fighting over that.
[00:06:45] But the first difference that I want to talk about is a will. Of course, the will is it speaks at death. That's the first thing I like to tell people. A lot of people think, well, I've got a will, so if I get sick, it's going to tell people what happens. That's not the way a will works. A will does not come into effect, doesn't speak until you're gone.
[00:07:07] And I just had this happen with a friend who died last year and he had done a wheel and set everything up very nicely. Then he destroyed the will about three or four months before he died, which then ruined everything.
[00:07:24] But it's just not going to take effect until you're gone. It goes through probate. And a lot of people go, what is probating really? Probate is you go to court and there's literally a probate division in every courthouse in Florida. And there's always a judge or two, depending on the size of the county, who handles probate cases.
[00:07:46] And probate, yes, it deals with wills and distribution of the property after you're gone. It also deals with guardianships, conservatorships for adults and minors and all that wonderful stuff that people don't like to think about it. Most probate judges are very experienced and very good and been in that position a long time. But judges rotate through. So sometimes a judge may spend a few months on the bench hearing nothing but criminal felony cases, then they're going to rotate and they're going to hear family law cases, then they're going to hear car wrecks. Then eventually they may rotate through and sit in probate. So a lot of people assume, okay, but this judge is extremely experienced in what's happening here.
[00:08:33] And while the judges are very knowledgeable and they know what they're doing, this is why they rely so much on the lawyers, because the lawyers are the ones when they go in, when there is a dispute, the lawyers. A big part of what we're doing when we have to go into those hearings is we are educating the judge. This is the law, you, Honor. These are the facts, these are the issues.
[00:08:54] And again, here's case law, here's statutes, and here's how we think your Honor should decide this case based on that. And both sides are doing that. And you hope you've gotten a judge who's seen this, done that before. But unfortunately, it's not always the case because that judge, again, may have just rotated in, never sat in probate. Now all of a sudden, they're thrown into it, and they're having to shake off the cobwebs in their brain of, okay, what did I learn in law school? What have I learned reading the manual on this here? And what did I learn from my clerks telling me what I'm supposed to do?
[00:09:30] Probate's very public. While it may not be online, it is.
[00:09:35] You can. Anyone can walk down to courthouse, walk into the probate court, and say, I need to see this file. And unless the judge has sealed that file, anybody's allowed to open it up and read it and look at it. I actually had a lady the other day. I was given some blood, and she was the lab tech taking my blood. And she was talking about. She and her sister haven't talked. Her dad died, and she doesn't know if she. Even. If he even probated an estate for her dad. And. And I said, well, where did he die? Lake County. That's where he lived. I said, go to Tavares. Go to Lake County Courthouse. Say, hey, do you have a case?
[00:10:13] Do you have a record filed on this gentleman? And they'll just pull it right out and go, yeah, here you go. And she could be a complete stranger off the street. And I tell him a hand with.
[00:10:23] But again, whilst you may not be able to pull it up online, anybody can walk in and see it. What does that mean? That means that anything that's gone through your probate, everybody's Going to see it. If they want to see it, it's delayed. It takes a while. It takes a minimum for a normal full probate of a year. Shorter probates can be done in 90 to 120 days, but those are for usually no real estate, a car, or, you know, no homestead, anything like that.
[00:10:54] But really what the probate is doing, I call it sort of bankruptcy after death. It's a death bankruptcy because in bankruptcy, and I used to do bankruptcy. In bankruptcy, what they do is they collect all of your debts. They find out everybody you owe money to.
[00:11:09] They publish it, they let everybody know, hey, this person owed you money and this is what they have. And then we divide it up and hand it out to your creditors after what you get to keep to keep and what you don't. Well, in a probate, the court is doing pretty much the same thing with your personal representative of your state. They are sitting there going, okay, figure out who all the creditors are. We have to mail notices to own by certified mail. We have to wait a certain amount of time. Then also we have to publish in the newspaper for at least so many days.
[00:11:43] Usually I think 90 days. Yeah, 90 days. They'll publish it in the newspaper. And then you have to wait. And. And then those creditors have the right to come forward and say, file a claim and say, hey, they owed me this much money.
[00:11:56] And then at the same time, that pr, the personal representative is putting together all your assets. This is all the stuff you own, all the bank accounts and life insurance policies and IRAs and everything.
[00:12:10] And that can take a while because you may have some things that they didn't know about.
[00:12:15] And you only get a bill every six months or every quarter or maybe even once a year. And so we often have had, where the personal representative didn't know you had an account at a bank. And then all of a sudden, here comes a statement a year later because it's been inactive. And they go, by the way, you still have money in this investment account. You still have money in this bank account, whatever. And then the personal representatives, great. One more asset to deal with to try to figure out what they had and where it is.
[00:12:43] They get all of that, they put it on an inventory form, they list all the creditors, and it's a lot of paperwork. So it can get pretty expensive. And again, it's time consuming because it's all done under the judge's review. The judge can watch everything, make sure that no one's stealing any money, make sure that everything's being distributed. They Determine who the heirs are.
[00:13:08] If the will names certain people, they find them. If people have already gone before you, they have to know that. And they go, okay, this person's gone. So now the next person gets it again. It's all very public.
[00:13:21] And then whenever everything's finally finalized in probate, everybody sees exactly who got what out of that estate. You know, these three kids got this house and this child got that, and this child got nothing.
[00:13:37] So it's, it's all public. And a lot of people don't want that to be public. They don't want everybody to know what they had, who they owed money to, and who got what after they've gone. Especially if it's a spouse or if it's young children, because people will prey on that.
[00:13:55] They see it and they pounce.
[00:13:58] They go after it also. Another thing is just among family members because it's public.
[00:14:05] Well, daddy left this much to them, and they didn't give me that much. That's not fair.
[00:14:11] So it's very public. They get to see all of that in the documentation.
[00:14:17] Compare that to a trust. A trust is very private. It's between you, the trustee, and then the beneficiaries after you're gone.
[00:14:24] It avoids probate, so it does not have to go through probate. While you may file that same notice to creditors out there, you would instead, instead file a notice of trust. Hey, so and so's gone. They had a trust. If they owed you money, let us know. And the reason that we still do that is because in Florida, if you do that, it cuts off the creditors.
[00:14:46] So if they are not watch hospitals, your last hospital bills, credit cards, just people you owe money to, if they did not pay attention and catch, hey, they're gone.
[00:15:00] We need to file a claim with the trustee, or we need to file a claim in the probate.
[00:15:05] After a certain amount of time, they're just barred.
[00:15:08] And like I said, it's usually 90 days after you've done that publication, they're barred. They cannot come and say, well, we're owed money. Because the law, the policy is we want to get it done. We want to know who we owe money to to get them paid off and move on within a year. We don't want this dragging out.
[00:15:26] A lot of people, this is sort of an aside that if someone dies and they never provide an estate, they don't have a trust, and then they never publish anything. Even those people, under Florida law, if the creditor doesn't come and say, hey, I want to get paid off, within two years of that person's death, they're barred.
[00:15:46] So we have had cases back when I did title work where we would have claims filed against an estate that was never opened.
[00:15:55] The person died, they left no will, they left no trust.
[00:15:58] But things. It was usually a hospital or a doctor's office. And they said, hey, we were owed this much money. We're going to file this common caveat. We're going to file this with the probate court in Orange county or wherever you were when you died. So that whenever we go to, we go, okay, well this person died. We've got to do something to pass this real estate to the next party.
[00:16:21] The clerk of court goes back to their records and goes, oh, yeah, and by the way, when you open this estate, this goes in it because they filed it within the two years after their death. So it's still a good lien against everything that they had. And then we had to pay them off at closing. So they still got paid off.
[00:16:38] But we just always put that out there that your creditors, when you die, will usually get paid at least something out of it. But again, inside the trust, you make it before. Before you die. It exists. It's a document.
[00:16:52] Our trust is extremely detailed.
[00:16:56] I call it like, you know those big Milwaukee toolboxes you see when you're walking out of Home Depot? They're just massive. They're like rolling conference tables with lots of drawers on it. Our trust is sort of like that. It has inside it, it gives the trustee lots of other powers and the trustee can create special needs trusts. So one of the beneficiaries is maybe a child or an adult that's on supplemental secured income or Social Security disability, Rather than dumping all this money on that person and saying, okay, now here's a million dollars or here's even $50,000.
[00:17:33] Now all of a sudden, that person loses their benefits. Getting the benefits are hard to begin with. Getting them back later is even tougher.
[00:17:42] So you don't ever want to do anything that's going to jeopardize those. So the trustee inside of our trust has the opportunity to go, oh, we're not just going to take this money and dump it on this child or this adult. We're going to instead create this separate trust over here that says that the only thing that this money can ever be used for is whatever those, those special governmental benefits do not cover.
[00:18:06] So we can't use it for anything else.
[00:18:10] So, for instance, maybe the person is in an assisted living facility and they're in a three person room.
[00:18:20] Their governmental benefits don't pay to upgrade them to a private room.
[00:18:25] The trustee can say, well we're going to put this money in there and we're going to go ahead and upgrade them to a private room.
[00:18:31] The Medicaid would pay up to this amount, which would be a three person room and then the trust will pay the balance to get them into a private room.
[00:18:37] Haircuts, a lot of times those are not covered by the benefits. There's all kinds of things that aren't covered. So the trustee of the new trust, under your trust has the ability to do that.
[00:18:49] It can create trust for one spouse, the surviving spouse, and say, okay, well this is going to be for the surviving spouse. The rest of the money's going to set aside for these children. We'll put 40% aside for the surviving spouse that they get to use and they get the income off of it. They get to use it for the rest of their life and then when they die, that trust is going to pour over to the children. So we're sure the children are taken care of inside trust. Maybe for children the trustee would have special provisions that spendthrift provisions that, well, this child, if they're sued in a divorce, they have a bad spouse, they get sued in a car wreck, whatever.
[00:19:28] Their creditors cannot go and take that money because the trustee can just say no, no, no, you don't get it.
[00:19:34] And that avoids it. So it protects them that way. And then again, it's private and confidential. It's just between the trustee and the beneficiary's trustee and the maker, the settlor, the grantor of the trust and it can be changed throughout your life. We do a lot of amendments of trusts throughout time. We're constantly updating, restating, amending, changing trust agreements for our clients because they get grandchildren, they get more grandchildren, maybe their children marry someone that they don't really approve of or like or trust. So they're like, okay, let's change this trust where they can't. Their spouse will not get our money, our family wealth.
[00:20:20] So it does that. Also the trust can, while the will only speaks at your death, the trust can speak while you're alive. So let's say you do become incapacitated, maybe heaven forbid you get ALS and you can no longer speak and you're bedridden. That trustee can take over all of your affairs and just start running things, keep things running for you. This is why it's really good for our clients who have operating businesses and they have real Estate because they can keep collecting rent, they can keep businesses running and they can do that. The other things you can do inside of a trust is you can name a trust protector or two or three. And the trust protector is sort of this concept, this person out there who they can advise the trustee who's in place. But by the same token, let's say someone attacks your trust or something happens and they go, hey, it's better to move this trust from Florida to Alaska. So the trust protector can say, well, I'm the trust protector, you're the trustee. You keep doing what you're doing as trustee, but I'm going to move this trust from Florida to Alaska for whatever reason.
[00:21:30] And so the trust protector can do that.
[00:21:32] Trust protector can go, oh, well, I have to amend this trust because it didn't have the spendthrift provision in it for the heirs. And daddy's about to go, he's the last one. So we need to make sure that the kids are truly protective because they have some creditors coming down at them.
[00:21:48] So we don't want to dump this money on them and then have them immediately lose it to their creditors. All the people they owe money to or they've developed bad habits, so to speak, you know, Kalshi or any of the polymarkets, they like to gamble.
[00:22:04] So the trust protector can go, I'm going to amend the trust as trust protector to add a spendthrift provision for this child so that when they get the property, when they get the money, they can't lose it immediately.
[00:22:19] So again, what probate really looks like it is, like I said, it's a court supervised process.
[00:22:24] Six to 12 months, sometimes longer. If it's in Miami Dade, it can be much longer.
[00:22:30] Miami Dade is, it's just such a big county and there's so many cases down there that I, I don't know how many probate judges they have. They have a bunch. But for instance, just to prove that a property was your homestead, in most counties, you simply file a petition to determine homestead. And they allege, yes, this was their homestead, this was the person's homestead before they died.
[00:22:59] And that's it, that's all you got to do. And the judge goes, okay, great, it's your homestead and move on. Miami Dades, you have to have, you have to also file copies of bills that were going to that house in the decedent's name and you have to get a neighbor or two to sign affidavit saying, yes, this person still lived in this house before they died. And it's just crazy. So it can get very complex like that. Again, it's public and it is legal fees. Now, the legal fees on probate attorneys fees are limited. They're governed by statute.
[00:23:37] But if you're dealing with any assets that are not what we call probate assets, like the homestead or life insurance policies, things like that that passed outside the estate, and the personal representatives still have to deal with them, there's no limit on that, so they can get expensive. And by the way, when I say personal representative, a lot of you may remember the old terms executor for the male and executrix for the female. That's what I'm talking about when I say personal representative or pr, that's who administers your will after you're gone and all the property.
[00:24:15] A lot of people choose a trust because again, no court involvement maintains that privacy, faster access, and the businesses keep running, the properties keep running.
[00:24:25] Also, the trustee we loved in title. We loved it when a property ultimately was passed to a trust upon death because we didn't have to worry about the probate of the property. We didn't have to sit and wait for months and months.
[00:24:42] I got one right now where I'm representing the buyer and they're getting ready to buy a property that is in probate, and the probate has not even opened yet. And they're like, okay, we've got to close as fast as we can, because I'm going. It's not going to be fast.
[00:24:57] So I'm just having to set the buyer's expectation. This is not going to be quick and it's going to be complicated. Also lets family stress that the trustee, if it's just in the trust, the trustee can go sell the property, take the money, and the family fights over it. But it's like, fine, we're fighting over money. We're not holding up the sale of this property while the market's high. You know, while the kids are. And I and I had this happen one time in a probate, the kids kept fighting over the properties.
[00:25:26] And it was coming up on it was in 2004, 2005, 2006. They're still fighting over it and arguing, and it's still tied up in probate for years and years because they kept arguing and because the property's going up with value. So they're sitting there looking at, oh, I've got a lottery ticket and it's going to pay me someday. It's going to pay me all this money and I want to make sure I get all my share.
[00:25:50] And then 2007, 2008 hit and it just took a nosedive. Whereas if it'd been in a trust, the trustee would have said, okay, you guys don't like each other, I don't care. I'm selling the property. We're taking the money, we're going to bring it in. If you guys want to find the money, fine, but at least we're selling at the top of the market and we're moving on.
[00:26:08] And this is the thing I tell all my real estate investor clients too, because I have multiple. They're like, no, no, I want everything to, I'm going to, I'm going to, I'm going to write my trust that everything, everything, all the real estate has to say real estate, the trustee is not allowed to sell it ever, and they have to maintain it for the income for my kids and my, I mean, my spouse and this and that. And I always tell them, I don't care if it's a will or a, or a trust. You don't, you never want to tie the hands of that person too much because more often than not, the heirs do not want the real estate. They don't. They've watched you as a real estate investor deal with these properties for decades, and they don't want to be dealing with it too.
[00:26:53] So that's another, another thing I always put out there for people because I know real estate investors love the property. It's, oh, so great, so great. But I really encourage people to go, no, no, no, don't. Let's not, let's not tie their hands. Let's let them sell the property if that's what they think is best, what's going to maximize the value.
[00:27:13] Another thing that I always point out is at the person's death, whether the property's in trust or in a will, as soon as that owner passes the tax valuation, so to speak, jumps the basis, jumps up to your date of death value.
[00:27:32] So if they could sell it the next day, the next month usually, or the same year, and have no capital gains tax. So I'm like, this is perfect. They can sell it. They don't have insurance problems anymore. They don't have real property taxes, they don't have maintenance issues, they don't have tenant potential liability issues, all these other things that come along with it with this asset, they can sell it, take the money.
[00:27:55] No capital gains tax, which you would have been facing before you pass.
[00:27:59] They don't have to worry about it. So again, it's less stress for the family.
[00:28:05] Again, property gets tied up in probate, like I said, happens a lot. When I was in title, well, and I that entitled probate, we had, I remember we had one, we had this thing in law school that we learned about. It's called the fertile octogenarium.
[00:28:23] Fertile 80 year old. And we always laughed about law school because when you're studying estates and learning estates, you learn, hey, even an 80 year old may have a child, a baby, and you need to be ready for that. And we always joked about it. But then we had a closing and it was in probate.
[00:28:45] The probate was just wrapping up. And then all of a sudden this woman comes forward and goes, no, no, no. He had a child with me. The man was 96.
[00:28:53] He had a child.
[00:28:59] But they did DNA testing and it was, it was his child.
[00:29:02] So all of a sudden they had to back up the probate and his, you know, number one, his children are already gone.
[00:29:10] We were down to the grandchildren and great grandchildren in this estate.
[00:29:14] We had a family tree that was the size of four of these panels right here that was just the family tree trying to track all the family members, make sure. But who was going to get how much money out of the estate when the property was sold.
[00:29:31] And now we had to add this baby over here that was born of the six months after he died.
[00:29:40] So. So yeah, but the trust, the probate's gonna disrupt your business operations if, if you've got an LLC that's operating and all that. And the, the pr, the personal representative has no immediate authority to keep acting and keep things going. So it's just not, it's just not a good way to go. If you have a business, if you have real estate. And this is the thing a lot of people ask me, they go, well, why would I need a trust rather than a will?
[00:30:08] And it is. If you've got real estate when you pass, if you've got an operating business when you pass, if you have heirs, if you just want to maintain privacy, if you have heirs who are probably going to argue if they see how much each other gets, it's nicer to just do all of it through a trust. Instead, it maintains all that harmony and act pretty quickly compared to credit flexible during live your lifetime. Again, the trust is. We can amend it, we can restate it, we can completely redo it, update it anytime you want to while you're alive.
[00:30:50] Even after you're gone, there are certain provisions that can still be changed, amended after you're gone.
[00:31:01] During your lifetime. And you can do it anytime. You can completely restate it, like I said, and you can choose how. When assets are distributed, we get a lot of people who go, well, if I never see this child anymore, they're completely out of my life. I'd rather give more to this one, this grandchild who has moved in with me and given up their career to take care of me, than then keep it equal between that person and their sibling.
[00:31:28] And the sibling's not been around.
[00:31:31] So we tell people to think about that. Also. We do tell people. I mean, just watch addictions.
[00:31:40] It's very, very common nowadays for an heir to develop an addiction, whether it's drugs, alcohol, gambling. Gambling is the most pernicious because you don't. You don't see it. I mean, somebody who's taking drugs, you'll pretty much catch it after. Or if they're. They're drinking too much, you will catch those pretty quickly.
[00:32:03] But gambling really huts really well.
[00:32:07] And so just, you know, paying attention to your errors. But we tell people, Ian, and just go ahead and write your. Your trust with provisions, just assuming that they're going to have some kind of an eviction, to give that trustee the, the discretion to withhold money and, and not give the. The cash to that person when they come begging for it.
[00:32:33] And that also goes to how you choose your trustees.
[00:32:36] A lot of people go, well, it's going to be my spouse. Okay, that's fine as your first trustee, but the next one after the next, that spouse is gone. That's a big decision to choose someone who has business sense, who understands what you do, if it's real estate or your business, plumbing business, whatever it may be, but also has the backbone to stand up to a pushing beneficiary.
[00:33:05] When I was practicing in Asheville years ago in the late 90s, my partner at the time, my one partner, was trustee of this trust, and he had been for years. And I'll never forget this. This lady came in, she's like, I need $500,000. I'm going to open a store because. Okay, what kind of store? Cookie store. Okay, open cookie store buying.
[00:33:27] And he just pushed back on her and he said, bring me a business plan. Bring me at least one other bank in town who would lend you the money. If you can do that, I will give you the 500,000 to, you know, to open. And she couldn't find any banks who were going to do the money based on her business plan. So he said, okay, I'm not going to do the Money. And he had the backbone to say that. I have heard trustees who are not, you know, they don't have the backbone and they'll be like, I just gave her the money to shut her up. I just wanted to get rid of her. And the problem is, is a lot of times the trustee is actually exposing themselves at that point because you just give her him the money to shut them up and in a few years they have no money left. They're going to turn around, they're going to sue that trustee saying, hey, you didn't watch out for him. You gave me money because I asked you for it. That was wrong. You shouldn't have done that because you should have known I'm good. You should have known I'm good and I was going to waste my money. And that's. You were not. You were supposed to prevent me from wasting my money.
[00:34:22] So that's another thing, Another thing we can do with trusts is parcel out the money you don't want. An 18 year old with tens of thousands of dollars is not pretty.
[00:34:33] It's really bad. Even a 21 year old with money is bad. But this comes back to that trustee with a backbone. Because in the United States it's called the crummy trust.
[00:34:44] Crummy rules.
[00:34:46] When a child attorney, when a child attorney, 21, no matter what your trust says, they have to have the option to pull the money out of the trust if they want to. But you've got to have a trustee who has the diplomacy, the brains and the backbone to walk this child around the block. It's called the walk around the block. And say, look, you're 21 now. You actually have the right to take all this money if you want to. But that's not what your parents wanted. Your parents wanted to take care of you well into your 40s or 50s even.
[00:35:18] So you can sign this paper and we'll just keep it. We're investing it. It's making this much money. Anytime you need something, you come to us. And we're most likely going to let you have the money.
[00:35:28] But this is really to protect it from you. But it also protects it from.
[00:35:32] If you marry someone later who wants to take all your money from you, if you get in an accident, if you sign a contract and get sued, all of this will protect this money from all of those people.
[00:35:43] So having that person who can have that walk around the block with the air as well is very important when you're choosing it.
[00:35:50] When I talk about choosing your trustees, I always use the old EOS principle. Does the person get it, want it and they're capable of doing it?
[00:35:59] Do they get it? Do they understand the weight of what they're getting into?
[00:36:04] Do they want it? Do they want to even do it? Are they so old or they just don't have the energy or they just would prefer to travel around the world and worry about being a trustee of your estate after you're gone?
[00:36:16] And are they capable? Do they have the capacity, do they have the brains and the time and the energy to do it? So gwc, anytime you're choosing a fiduciary gwc, that person just like you would gwc an employee, do they get it, do they want it and are they capable of doing it? We do that with all of our employees before they're promoted, before they're hired.
[00:36:40] We think of it from a GWC standpoint and I go well there are a lot of things in life besides an employee to gwc. People make sure they get it warrant capable of get it warrant capable of doing it.
[00:36:52] Very important.
[00:36:54] Again, the built in protection features inside of a trust of course we have, we've built in controls for addictions on spending. We've built in divorce protections, we've built in credit protections and protections just from bad decisions. All that can be built into trust agreement to protect your children, your grandchildren, your friends or whatever completely from it. Also in the trust you can also use that as another vehicle to give to charities that you support.
[00:37:25] That's perfectly fine as well. A lot of people use it for that. You can do a lot of tax planning right now, a married couple, if your estate is worth Less than 30 million, you're not going to have any estate tax when you die. If you're a single person, 15 million and under your there's no estate tax. So for the most part, for most of our clients, tax planning is not a big issue. But if you are over that 30 million mark as a married couple of that $15 million mark as a single person, we do build in tax advantaged things and do some other things not only with the trust but with other parts of your estate planning, asset protection planning to save you some, well, your estate.
[00:38:11] Estate taxes, when you go, a lot of people get mixed up. Estate taxes are totally different from income tax. It's a whole other part of the internal Revenue code and a lot of people think it's going to be the same. It's not.
[00:38:23] It does not matter how much money you made during your life, it's just how much your estate was worth. When you die. As to whether the estate tax applies, again, special needs and long term planning, I always like to talk about this because this can still be built into that trust within protecting the government benefits, supplemental needs or special needs provisions. Again, things that are not covered by the governmental benefits and long term care considerations.
[00:38:50] A lot of people, we don't really handle that area of law where if you are worried about paying for nursing home care, that's. We don't do elder care law. Most of our clients have the, the net worth that they're not worried about. Most of our clients can afford in home care for the rest of their lives and if not, they can afford to do what it takes to go into a long term care facility without really putting a massive dent in their holdings.
[00:39:21] And some of them just, I think they will themselves to die sooner so they don't eat up their estate.
[00:39:28] We've literally had one man who built himself to die in an ambulance on the way to the nursing home.
[00:39:34] So it does happen, but it worked out well for his ears. But it's just one of those things to keep in mind that your trust, if you have an existing trust, you want to look at it to see does it say anything about supplemental needs, trust or special needs.
[00:39:51] Because if it doesn't have that in there, you'll definitely want to either amend or restate the trust to include those provisions in there so you have them.
[00:40:00] And of course the cost of not planning people go, well, if I just don't even do anything at all, I don't have a will, I don't have a trust at all. Well, number one, the state has written your will for you.
[00:40:10] And it may not be the people you want to get your stuff, may not be the people who are going to get it under what the state has said, which is what happened to my friend who tore up his will.
[00:40:23] His estate ended up passing to family members who he not spoken to for years because they had, they just did not like each other. But they ended up getting his estate because he had torn up his will in a, in a frenzy one night and no one realized he'd done that.
[00:40:40] It delays accessing assets, higher legal costs and that loss of privacy we talked about.
[00:40:46] So what we always tell everybody to do, go back to your documents. Number one, if your estate plan was done before 2018, there are certain documents that you absolutely need to have redone and updated. The durable power of attorney would be one of them because the law changed around the durable power of attorney greatly in 2018.
[00:41:08] So you would definitely want to be getting a new durable power of attorney, your trust. You definitely want to review that.
[00:41:15] If it's not been updated or reviewed in the last five years, at least, you definitely want to do that. If you've moved from one state to another and the trust was done while you lived in the other states, you'd want to have it reviewed.
[00:41:27] New children, children marrying grandchildren, grandchildren marrying great grandchildren, great grandchildren marrying. All these things are things. Maybe you've got new charities that you hadn't thought of when you did that one before, and you want to make sure that these new charities that you support now are taken care of.
[00:41:49] Maybe you didn't care anything about beagles 10 years ago and now you love Beagles, so you want to take care of the.
[00:41:55] Not talking about anybody personally, but it's and, and, and, and identify the gaps. That's one of the things we do. We, we take in anytime you go through our process.
[00:42:08] I don't care if you've already got an estate plan or not.
[00:42:11] We gather together, we have a, a what we call an activation call where we sit with you and we gather all, all your information from you and then we get copies of your deeds, copies of your tax records with the, from the property appraiser, we get copies of your operating agreements, copies of your current estate planning documents. If you have a trust, we get all that, we take it all, pull it all together and go, okay, this is where you stand right now. We identify the gaps, whether they're critical, medium or low gaps for state, not only estate planning, but also for asset protection. Because we want to make sure you know that you're wrapped up there. And then we come up with a strategy, a design strategy for you of, okay, we want to take care of the critical things in stage one. We want to get these things done first. Second, you know, we may want to layer in the next layer of protection for you.
[00:43:10] And then third, optional things that really wrap it up in nice tight bow and a box and do everything exactly the best practice, stage three, that can take months to get all that in place.
[00:43:26] And it does take time, but when you're done, you can feel good, okay, everything's done. And then we've already booked the call with you before the end of the year that we're going to reach out to you and just say, hey, has anything changed? And sort of spur your memory, spur your thoughts to thinking of things that may have changed or will be changing in the next year so we can maybe help out getting those updates done. And we'll do that each year in October, November, December every year we'll talk to you and say hey what's changed Anything coming up we need to know about anything we can help you with anything like that we also work with your CPAs and your financial advisors because for some reason everybody tells them more than they'll tell us I don't understand but they look and I'm the same way I'll talk to my financial advisor and my CPA in ways that I probably talked to some of my lawyers but we get a lot of information from them as well if you ever want them to talk to us and we can help work together the big one is on the financial advisors we find out that you never took care of the transfer on death provisions in your accounts or well we really need to open up an account for this entity that we've created for them and move everything into that because everything's going to flow from there down to the trust and then out.
