Good evening.

You've got more than money.

Gene Dickison your host, your personal financial advisor.

When I say personal, I mean that very, very precisely because financial advisory work is never appropriate.

Done with a a broad brush, a broad brush is a very diplomatic way of saying, I'm just going to cookie cutter everything I do for every single client.

In my opinion, that's that is a dangerous, and irresponsible way to apply financial advice.

So as we answer questions, as we do every week, the answers are specific to that person.

We've gotten a number of emails over, our seasons that.

Absolutely.

Either misinterpret, don't understand, don't choose to understand.

Or, or simply are ill informed that if, if the answer is is that to this person who was asked the question, it must be the same for me.

Absolutely not.

The case.

Absolutely not the case.

We are, we are customizing every single answer to the person asking the question.

Now, can they be informative, instructive?

Lead us down a path.

The answer is absolutely.

And that's exactly why we're so excited to offer to all of our, viewers in our audience the opportunity to reach out.

Gene at ask mtm dot com.

Send us your emails.

We have an entire team of absolutely outstanding financial advisors who at no cost to you, no obligation, no pressure, answer your information, give you information back to you.

In some cases, it turns out that they follow up with phone calls so they can gather more information, give you even a more customized, more specific answer.

Some cases, they end up being zoom calls.

We have, now.

Gosh, I've lost track 30 plus, states that we've had zoom calls with folks who have seen our show and said, hey, I've got a question I'd like to kind of face to face, easily done.

And, again, further customizing it.

Every single answer has to be customized back to you, the, the regulators, the financial regulators who, because I am, in, in, I don't just play a financial advisor on TV.

I are a financial advisor.

And I and I am pleased to represent a firm of financial advisors.

This is what we do.

We are regulated, by a number of agencies, the SEC predominantly, who are very interested in you and protecting you and providing you with the best possible experience as you work with an advisor, any advisor, coast to coast, border to border.

And as a result, they are very, anxiety filled when they hear the word guarantee.

And understandably so, understanding that a guarantee, implies that the financial advisor knows something that you don't, and that the outcome is assured and there are virtually no guarantees, virtually no guarantees.

There are virtually no subjects that I can come on, our, our PBS system and say everyone essentially is here.

Everyone.

You've got to be suspicious.

And, isn't that the case of most advertising, particularly financial advertiser whatever they want to sell you, everyone has to have that.

And they typically use fear, fear to convince you or convince is a ridiculous word.

Convince means they they might actually have your best interest at heart.

They don't.

They have their best interest at heart.

Regular again, predominantly SEC, Finra, state regulators, they're all very interested in the term fiduciary.

A fiduciary is a financial advisor who puts your best interest first, above and beyond theirs, above and beyond their their companies or anyone else.

Your best interest first and on some level, some financial advisors, kind of bristle under that and go, yeah, I got to make a living.

Okay, sure.

We agree with that.

What we don't agree with is that there's a conflict because there isn't.

If we are constantly doing what's in the best interest of all of you, all of our loyal viewers, everyone that we serve, whether they're a client or whether they're an audience member, whether they're simply asking a question, ironically, it turns out that's really good business.

It's really good business to simply do the right thing as often as you are.

You are skilled enough to do so.

During this, I promised in the former show that we might do a snark week.

This is not a snarky.

This is looking behind the scenes a little bit of how we approach, how we think about answering questions.

So now that we've done that, let's answer a few questions.

Where do we start, sir?

Oh, fascinating.

This is this is very, very interesting.

In my opinion.

You will let me know.

Fights at the senior center recently at a season at a senior center, there was a lot of confusion about trusts and wills.

One woman told us that she saved $10,000 off of a $20,000 legal bill by setting up, trust and going to the courthouse and doing the filing herself.

The lawyer had her file all of those papers and gave her a discount.

To say I was shocked is putting it mildly, another senior said she is files off the internet and except for a few fees, it was virtually free.

Several others used preprinted forms, either through books or printed off an online service.

And there was another idea that there are charities offering free trusts.

If you go to their meetings.

My main concern are the charities.

Is this a good way to go?

Do their pre-made forms really hold up, you know, legal scrutiny?

Thank you for your help and your knowledge and entertainment that you provide through your program.

Thank you very much for noticing the entertainment part.

It's sometimes so subtle.

Even I miss it.

This is fascinating.

Estate planning.

Already your head hurts.

Estate planning.

One of the few things, one of the very few things, that I could absolutely say everybody should.

Everyone who's of age should.

Now, I've heard people go.

Now, wait a second.

I'm 22.

I'm barely out of college.

I have nothing.

That may be true.

But.

But you still have a little something, and you still have people that care about you and people that you care about.

So you don't want to leave them in the lurch.

And not having estate planning in place leaves the people that you love and who are, left to pick up the pieces in the lurch.

It is nettlesome, at best, to handle even the simplest state.

If there's no will in place.

The more complicated issues it's not nettlesome.

It can be tragic.

So estate planning is one of those topics that, in my opinion, virtually all right.

99.9% of the folks who are watching me this evening absolutely have to have an estate plan.

Now, an estate plan comes in a lot of different flavors.

It could be documents like we're talking about here.

It could be beneficiary designations.

Hey, I'm 22.

Just started my first job.

I've got a 401K.

I'm not married.

Who do I name is my beneficiary.

Obviously that's an important piece because if you do pass that goes to your beneficiary.

Very very important.

But 401k, IRA life insurance annuities these all have beneficiary designations that you need to pay close attention to.

Now circling back to the fight at the senior center, the fight is fascinating because it suggests that there is some equivalency between, AA0 cost, planning a state plan and a $20,000 cost estate plan.

And there simply isn't.

There simply isn't.

We talked early in our show about customization, about everything needing to be quite specific.

There are a number of issues within the estate planning world that need to be quite specific.

I'll give you a simple example.

The state in which you live.

We are seeing coast to coast and border to border.

So if I am preaching to someone in the state of Pennsylvania, our home state, our our world headquarters are our flagship station is here in Pennsylvania.

Absolutely.

They must follow the, estate planning documentation rules of the state of Pennsylvania.

State of Florida, totally different.

California, 100% different.

Every state has their own wrinkles, wrinkles.

So, at the very least, if you are doing, I'm going to do it the cheapest way possible and just, photocopy something out of a book, fill it in and put it in an envelope.

You have, put your family, put the people you care about.

Put the people who are your survivors at the risk of you've overlooked things you didn't even know you were overlooking.

So getting at least some personal counsel, a trusted estate planning attorneys, trusted experienced estate planning attorney to ask all the appropriate questions that he or she knows needs to be asked, and thereby be able to design the estate planning documents in a way that fits you precisely, fits your situation precisely as opposed to, as my last well and trust being of sound mind.

If you're doing on your own, I doubt that you really are being of sound mind.

At the very least, you're being, And I'm using the word appropriately ignorant.

Ignorant.

Not stupid.

Ignorant is I didn't know.

And now that you've told me I do is stupid, as I've told you 150 times, and you still are now ignorant means, Wow.

Now that you've told me that, and I'm no longer ignorant of the facts, I understand I must do things differently.

So a couple things jump out.

Number one, preprinted forms.

Please don't do that internet.

Slightly better because depending on the service that you're using, theoretically they will be up to date and theoretically they will be state specific, slightly better.

You still don't know if you're answering the questions correctly.

You still don't know if there are things that are left.

Unattended that need attending.

Now let's talk about the $20,000 fee.

I can assure you it's not in the email, but I've seen enough of these.

I can assure you, that the $20,000 bill, was propagated by a law firm that specializes not just in estate planning, but in living trusts.

Living trusts?

Living trust in the sense that they are, the answer to your probate worries.

And they create a big binder of documents, most of which are, web forms and printed, white, off of a, a library, that has little or nothing to do with the specifics of your situation, but they're very impressive.

Binder, usually faux leather.

Faux leather.

You know, I kill off animals.

That's that's wrong.

Faux leather.

Very impressive, because $20,000, you've got to be impressed with $20,000.

And their theory is you had to put everything into a revocable trust so that when you pass it passes instantaneously.

And there's no probate.

Life is grand $20,000.

She saved $10,000 because the part of the work that the attorneys really don't like is going to the courthouse, filing the papers, and then moving all the assets into the trust.

Now, 780 years of experience, I am not a lawyer.

Goodness.

Make no claim to be, but I've bumped into a few along the way, particularly on the estate planning side and the ones who are, trust the trusted and experienced are invaluable.

Invaluable.

And the ones who are, disreputable are very damaging.

Ten, 20, $30,000 for what in most cases ends up being for five, six hours of work.

So let's just use six as an example.

And let's say they charge $12,000.

I've rarely jumped bumped into any attorney anywhere at any time.

That's worth two grand an hour.

At the very least.

Buy me dinner.

It's.

This is painful.

Painful to see.

So, at the senior center.

We haven't even begun.

To to touch on all the ways that either an attorney can be of tremendous assistance in, in in helping you identify exactly how your situation should be customized or a disreputable attorney can be, in credibly damaging and self-serving and in a non fiduciary and not representing your best interests by charging you tens of thousands of dollars for something that quite honestly and most in many, many cases, I'm not saying most in many, many cases not appropriate.

Not appropriate at all.

So goodness gracious, by the way, the free charity ones, that's a head scratcher.

There are some wonderful non-profits who are helping folks, develop estate plans with the express understanding that hopefully you're going to direct a fair amount of your your estate to them.

And do they provide pretty legitimate services?

In many cases they do in many cases.

In many cases they don't.

So why take the risk?

Why be Pennywise and pound foolish?

Why not secure your very own personal trusted, an experienced estate planning attorney and do this correctly?

It is a small investment in my opinion, a small investment for a very large return.

Goodness, that's a little snarky.

But yeah, Gene’s not reluctant to be a little snarky when it's appropriate.

Speaking of appropriate, would it be appropriate if we answer another question?

I thought so, little feet, a little follow up to Trust or Not to Trust.

Hi, Gene and the entire More than Money crew.

So Jeff and Harvey.

Jake, everybody, I recently happened upon your show after watching another program on your network, and it could not have occurred with better timing.

Look at us.

My wife and I live in Philadelphia with our two young children.

We're currently looking into estate planning.

Our current plan is to set up a trust for our assets while setting up a will to execute the trust.

Excellent.

We have the following accounts.

Checking savings bank online accounts 403Bs, Roth IRAs, 529s as well as an investment account.

We also have life and disability insurance through our employer at two times our annual salary each, but no separate policies.

We're reaching out to ask, is this the right age?

Is it the right idea to set up a trust to protect our children from some tax liabilities when they receive access to the accounts in the home?

Are there common mistakes we should avoid when setting this up and any other implications we should consider?

Thanks for your time and your help.

You are quite quite welcome.

Any time we can help young families we are very interested.

I'm a little precious.

Three daughters, a granddaughter.

So yeah, helping families.

It's high on our list.

Your instinct of creating a trust is perfectly appropriate.

Let's paint the most dire picture.

Young family.

Mom and dad, two children.

Children are five and three.

And mom and dad are tragically lost.

It's dreadful.

Five and three.

Obviously cannot manage their own finances.

So what function where they trust serve it is to, provides that oversight, that management, for the benefit of the children until they are in position to accept that responsibility themselves.

And at five and three, obviously, it's going to be years and years before they're in that proper position.

So it is not a tax issue that you should be, concerned about.

Most of the, impact that you will have from creating a trust, particularly in this, this type of situation with young children is the knowledge that there will be, three people that will assist you in carrying out your wishes when you can't.

The first is the executor of your will.

You will pick someone who will carry out, your instructions, literally to the letter, literally to the letter.

You will, will include, all the personalization, the customization that we've talked about throughout our show tonight of exactly how you would, conduct your business if you were still there, for the benefit of your children.

The second very challenging selection would be the Guardian.

We haven't gotten to the money yet.

We've done something far more important.

We must address who will be caring, who will be raising, your children, hopefully as close to the way that you would raise them as humanly possible.

Very challenging.

Some folks say.

Well, that's easy.

That's my mom and dad.

As a grandfather, I would absolutely stand up and, take, be the guardian of my granddaughter.

Absolutely.

Is that the best for her?

The answer is probably not.

Would it not be best for her to have a guardian closer in age to her mother and father?

Closer in, in, in, circumstance and values and geography, etcetera, etcetera, and allow grandfathers and grandmothers to be grandmothers and grandfathers.

Now, we all know stories of grandmas who have taken care of their kids and their grandkids and their great grandkids and done beautifully well.

And if that is the best answer, absolutely.

Is it?

But I'll give you an example of what's not the best answer.

Let's say these children are ten and 12.

They're in school, elementary, middle school, whatever.

They lose their parents.

The, Guardian there was name was mom's sister who happens to live in Texas.

What have we done?

We've lost their parents.

They will lose their home.

They have to move.

They'll lose their schools and everything they're involved in.

The lose all their friends, the live, lose connections to any family.

It's in this geography.

And, wherever that may be.

And in my opinion, dreadful choice.

Dreadful choice.

So, Guardian picking guardian.

And then we come to the money.

Trustee.

Typically we've seen very often, estate planning documents that have all three of these things filled by one person.

If that's the only solution, okay.

But it's not the best solution.

It is often best to have, three different people doing three very different jobs.

An executor ship.

Follow the rules, letter of the law, get it done.

Short term, maybe six months, hopefully not much longer.

Guardianship might be decades.

Trusteeship almost certainly will be decades.

So naming the person in charge of the money is very, very important.

Now, it could be a person could be in an institution.

There are trust companies that, do these things very, very well.

You may end up doing a co trustee so that you have an institution that, you know, will be there for decades, and an individual who may or may not be there for decades, depending on the plans of the good Lord.

So from a impact standpoint, the question that you're asking is, is the trust appropriate?

Absolutely, absolutely.

Are there significant mistakes made?

In in the comments in in common experience the answers?

Yes.

Naming the same person to fill all three roles, in my opinion, is a mistake.

Probably not in the best interest of the children.

Second big mistake is typically, a trust, especially one that's been poorly drafted will simply say, that the children received the corpus, the capital in the trust when they turn, when they become an adult, the age of majority.

Some states 21, some states 18.

I don't know about you, but at 18, I was dumb as a box of bricks.

And if you gave me hundreds of thousands of dollars at 18, the trouble it would have cost and the headaches it would have cost, it would have been fuel on the fire of of irrationality and poor judgment.

My opinion.

That's a really bad idea.

In my opinion, having a trust that just simply spills the money out, doesn't help.

Your children certainly is not what you would do.

You would if you were there.

You wouldn't simply hand an 18 year old son or daughter 300 grand and go back.

Go do whatever you figure you want to do.

Most quality trusts have some provisions where the payouts are over time.

Very common to say, they that the child receives the income from the trust.

That's their support until they turn 25.

And at 25, one third of the trust gets paid out to them, fully acknowledging that even at 25, they're going to make some mistakes.

Sadly they will.

That's human.

And hopefully not devastating mistakes, but some mistakes so that by the time the second tranche becomes available to them, second, third, second part of the estate, second third of the trust at age, say 30, they will have said, we made some mistakes.

We're not going to make those mistakes again.

We're going to put this money away, likely, likely at that stage of their life for their young family.

And then finally at, say, 35, the final piece comes out and the final piece comes out.

And at this point, hopefully, hopefully, they learn from their initial mistakes.

The second piece has been put to good use to protect their young family, and this piece might very well augment their own retirement and have them give them a solid foundation that at 35, they get a block of money that they can tuck away and hopefully 30, 35, 40 years from now, they end up, remembering how well cared for, their mom and dad, allowed them to be, both financially, physically, with, with a guardian that respected them and cared for them, and, with an executor that carried out all the instructions precisely, correctly, many, many years ago.

Done that way.

Taxes will be, modestly impacted on the positive in a positive sense.

But more importantly, your child will be positively impacted in all the ways that really matter.

And we'll be able to look back on the efforts that you're making.

And, and, and know clearly mom and dad really loved us.

Mom and dad really put the time and energy and effort into making sure that no matter what, no matter what, whether they were with us or not, that we would be, well cared for and and, gosh, what what better legacy could you possibly leave than giving your children that knowledge of of that love?

So, long winded.

My apologies.

Covered a lot of ground.

It's really, really important.

Trusted, experienced estate planning attorney.

Absolutely necessary.

This is customization at its highest level.

And, you deserve they deserve, the very best.

And of course, if you bump into an issue where you're going, I'm not really sure where to go.

Reach out to us again and we'll get you some good referrals.

Goodness.

We covered a lot of ground with just a couple questions this evening.

But there's a very serious common theme.

And it's customization being very specific to your circumstance, being very specific to the needs of the people that you love, being very specific and intentional about the actions that you will take, about the professionals that you will engage to bring you, the, the peace of mind, peace of mind of knowing that you've done everything you can independent of what life may, may put in our way, might what?

However, whatever path we may follow that the people we love are well provided for.

Folks, I thought, I hope that that you picked up a couple ideas that everyone can use.

Estate planning is mandatory.

If you have questions, send those to me.

Gene at ask mtm dot com.

And if you just enjoyed the show, maybe we'll return next week when we have another episode right here behind this podium to offer you more ideas right here on More Than Money.

Good night.