Will Bachman 00:01
Hey, welcome to Unleashed the show that explores how to thrive as an independent professional Unleashed is produced by Umbrex, which connects you with the world’s top independent management consultants. I’m your host Will Bachman. And I’m very pleased to have today with us our guest, Maureen chard, who is the founder and managing partner and at Wheatley, Pro, chard, and Associates. She’s a trust and estate attorney. And today we’re going to be talking about how to put together a will and testament and a trust and estate plan, and all that business. So Maureen, welcome to the show.

00:41
Well, thank you for having me, it’s my pleasure to be here.

Will Bachman 00:46
So Marine, a lot of folks may now more than ever be thinking about putting together a will and trust and estate plan. Talk to us about before someone goes and sees an attorney, what is all of the material that a person should put together. And as sort of our prototypical listeners of the show, think about someone you know, for who’s probably running their own independent consulting practice, they may or may not have an entity setup, may or may not, you know, have a significant other with kids, but it’s probably an independent consultant, who has an entity may have an employee maybe not, but a smaller firm. So for that profile, what should the person pull together before they go see an attorney?

01:38
Right. So for the, for the person and business person who is running the business, whether or not they are formally incorporated, and is working as a corporation or an LLC, some of the general documents that they will need to pull together is, first of all, if you’re running an entity information about the entity, its name, if it’s Incorporated, then a copy of the incorporation documents would be wonderful to have. If the individual is working with a partner, you know the names of the partner and if they have any partnership agreements between them, that would also be good to put together for a personal estate plan. And they will, of course, need to pull together their personal information. But any bank statements, they have any stocks, any deeds to houses, motor vehicle, so all documents that reflect their personal assets or any assets that they own anything that they own in their own name. So usually those are some of the things that you’ll put together also if you have any expenses, and is that they usually would want to know about those as well.

Will Bachman 03:02
Great. And I will mention that listeners in the show notes, you can download a document that Maureen very kindly provided that has a complete checklist, and helps organize all that material, including insurance policies, all your liabilities, your mortgages, as well as all your assets retirement plans. Maureen, tell us a little bit about maybe I should take a step back. Why is it important to actually work with an attorney to put together a plan? You know, a lot of people might think, Well, my heirs just inherit all my stuff if I die. So why what does this help avoid? Is there tax benefits? Does it make things move faster? Like what’s the what’s the benefit of putting one of these plans together?

03:50
When I say usually the benefits sometimes is to one to have a seamless process. So if something happens to you, one that you’re you’re the person that you’re putting in charge of figuring out your resume one day know where all of your assets are located, to there’s a process for getting those assets out of your out of the individuals name into the hands of their beneficiary, whether or not that’s through probate or through some other form of estate plan. There’s, if the person has a high enough estate, there may be tough tax consequences, and planning your estate you can prepare for those tax consequences. If you do if the individual does have children, then this is also very important because they can use a will or some other standalone documents to nominate or designate someone else to take care of their children. So it’s you know, it’s very important because you want to avoid the conflict and the uncertainty about who is going to get your assets. If something happens to you, so most people don’t realize that if they don’t put a plan in place that the state in which they live has a plan for them. And usually that’s the intestate law. So each state has a law that tells you if you pass away, these are the people who will inherit your assets. And some of those people may not be the individuals you want to get your assets to. So if you want the people to get your assets, who you want to get your assets, then it’s important to put something in place, selling a cord or telling someone that this is the people who I want to inherit my stuff.

Will Bachman 05:41
So talking about children, so with them, talk us through some of the terms, and some of the options there. So you might have a, I assume there’s like a primary Guardian, who would be the first person if you pass away, who, you know, if you and your significant other both pass away? Who would? You know, I don’t know if it means that they would adopt your kids or just take care of your kids for you. But then there’s also some other kind of roles to designate Is that right, someone else might be responsible for the money and kind of doling that out. So what are the different roles related to your kids?

06:18
Alright, so when it comes to designating guardians, for children, there are two types of Guardians, there’s the guardian of the person. So that’s the people who are going to care for your children on a day to day basis. So they’re going to basically have custody of your children, it’s not the same as adopting a child. This is a formal process that the court says this, these people are allowed to take physical custody of the children and care for them until they are 18 years old. And then you have the guardian of the property. So that’s the Guardian, the person who is going to manage the finances for the children. So they will hold the funds for the children until they’re 18. And while they’re they’re minors, they will pay to take care of the they will give the guardian of the person funds to take care of the children. So the guardian of the property and the guardian of the person can be the same individuals, it’s just that their function and in different roles. One is physically taking care of the child and one is managing the assets that’s been left for the child.

Will Bachman 07:36
So they could be the same person. But you could if you wanted to say well, I trust this person to be the kind of caregiver, but I trust this other person, perhaps to be the guardian of the assets. And those might be different people as well.

07:52
Yes, that’s correct. And for a lot of times, parents do that. And that allows a little bit of Check, check checks and balances, one person will, you know, sometimes one person is better at managing money than another person. And then you have someone else who can see what’s going on with the funds. So, you know, so sometimes, but it’s also important that these individuals are able to work together. Because if conflict arise, then there may be a need to go back to court in order to appoint somebody else if these people can’t get along with each other.

Will Bachman 08:31
Okay. And I think in terms of Guardians, you know, I recently went through this process, Margarita and I went through this process, in addition to sort of the more permanent Guardian, you may also be asked to designate a, you know, emergency Guardian, like someone in your city who could take care of your kids, if you like die in a car crash and your guardian is across the country, you might have a there’s additional categories of Guardian, right for short term emergency kind of thing.

08:59
Right, I generally call these guardians first responders. So they’re temporary guardians, and they’re only going to have custody of your children for on a temporary basis. Like you said, if your permanent guardians are in another state or in another country, then they these individuals, these temporary guardians will be able to take custody of your children to care for them, and provide for them and even be able to make medical decisions for them if the need arise until their permanent guardians can take over those roles.

Will Bachman 09:35
Great. Let’s talk for a minute about a trust. So there I mean, one way to do this, I understand is kind of a will were you just directly you know, people directly inherit your your, your your property, your real property, your assets, but there’s also a mechanism of debt creating a trust, which is the circle legal entity where you transfer your assets into that, quote unquote trust. Tell us what does that even mean? Why would you do such a thing? When is it appropriate and relevant?

10:13
Okay, so right so in, in addition to creating a last will and test them, and there are other estate planning tools or vehicles, as I call them that individuals can use to administer their estate or get their assets to their beneficiaries. And one of those other methods is what we call a revocable living trust, they’re very different. They’re very various different types of trusts. So one of these types is a living trust. And the trust is basically, you think of it as an entity of another vehicle that you’re putting your assets into, I usually explain it to my clients as Think of it as a box that you’re putting everything into. So you’re taking it out of your own name, and you’re putting it into this box, and this box is going to hold all of these assets for you, until you pass away, and those assets gets transferred to your wherever you want to receive those assets. So in a trust, there are basically three important roles. So there is the trust or the grand tour, and that’s the person who is given assets to the trust. And then there’s the trustee. So the trustees, the person who’s going to be managing the assets in the trust. So they’re going to take care of the day to day running of the trust and all the financial assets in the trust. And then you have the beneficiaries of the trust, those are the ultimate people who your assets are going to go to upon your death. So for revocable living trusts, the distinction with a revocable living trust from other trusts is that when they revoke a living trust is drafted and executed. The person who is given assets to the trust is serving in all three roles. There are the grand tour, they’re giving their own assets to the trust, they’re going to remain the person who is managing the assets in the trust. So they’re going to be the trustees. And while they’re alive, they’re still going to be the beneficiaries of the trust. So in effect, it says if nothing changes, but except for the fact that you’re taking the assets out of your own name, and putting it into the name of an entity who is going to hold those assets for you. And one of the reasons to do that is there’s a great need, a lot of people have a great need for privacy. So everything in the trust remains private. And the only people who knows about what’s in the trust is the people who are putting the assets in the trust, and the beneficiaries of the trust. So if you look at a will, when someone puts together a last will and testament, if they pass away, that will have to go through the court system, it has to be probated. And so once it goes to the court, and the court accepts the will for probate, then that will becomes a public document, anyone can go into court and pull up a copy of that will and see who is receiving your assets. So one of the fundamental differences is that some people are concerned about privacy, and they want to maintain their privacy. And so they will do another form of estate planning, like a trust to prevent anyone else from knowing what’s in their documents. The other distinction is that a revocable living trust Upon the death of the Grand Tour, the or the trust store, some people call it the trust or the trust does not go through the court system. So there is no requirement for a probate the trustee. Whoever the successor trustee is the person who you’ve named to take over for you after you pass away, that person will then step in and manage the assets in the trust and distribute the assets according to the trust documents. So the trust will tell the trustees when to distribute assets and who to distribute those assets to so that’s also another benefit of trust is that you don’t have to go through the probate process. And the probate process for someone for state for example, like New York can take anywhere from nine months to a year or longer for the the executor of the estate to be able to wrap up the entire process and give the beneficiaries their assets.

Will Bachman 14:58
Wow. So That sounds by itself like a major advantage to avoid all that nine to 12 months of delay time, which probably has some cost as well associated with them. And you’re probably paying an attorney to do something during that nine to 12 months.

15:12
Right. So there there is a cost to file to probate the will. And that’s and the cost is based on the value of your estate. So the value of the total value of the assets that you own, that will be going through the court system. And of course, your as you said, there, you’re going to be paying an attorney to assist you with those, the process of doing this. So there is a cost to getting your assets through the court system. And a lot of estate planning attorney estimate that costs can be anywhere between five and 10% of the gross value of your estate.

Will Bachman 15:49
Holy smokes. I mean, that’s like five to 10%. Wow. Okay, so if you’re a million dollars state, you could be looking at 50 to $100,000 of all this probate costs. So this

16:02
right, no costs and fees. And you know, and it could be higher if if they if there’s any challenges to your will in the courts, then you’re looking at a significantly higher costs as well. And that’s the other thing. When you when someone passes away, there’s the intestacy law, right, that tells you if you die without a will, who is going to inherit your assets. So if you have a will and you probated, all the people who would have inherited, under the intestate law has to be notified that you pass away that there is a will they have to be send a copy of the will. And then the court gives them a chance to object to the will. And it’s content. So that right there can also lead to some conflict, whereas with a trust, you don’t have the same scenario.

Will Bachman 16:56
Okay, so that is like a massive advantage. So you get this privacy, you get to skip the whole probate thing. And is there any tax advantages?

17:07
Before there used to be a lot of tax advantages, because you could plan your estate so that it’s transferred in a way to basically avoid paying some of those estate taxes or minimize them. But right now, the x, the estate tax exemption on a federal level is pretty high, it’s about $11.2 million. So if your estate is below that amount, then you don’t have to worry about estate taxes. There may be some state may have their own estate tax, for example, New York State does have its own estate tax, but the threshold, or the exemption amount is still pretty is $5.7 million. So if you have assets under that amount, then your estate you’re not looking to pay any estate taxes. The problem is that the estate taxes, I think in 2025, you know, it’s sunset, so they’re going to have to decide whether to keep it at the amount it is or reduce it back to $5 million. So there is always some uncertainty about taxes based on the laws in place at the time.

Will Bachman 18:25
Okay. So it sounds like, you know, just for the issue of avoiding probate, that listeners of the show, you may want to check out this idea, you know, definitely asked about the trust. And whether that makes sense. In addition to the trust, there’s also some documents that are part of estate planning marine like that aren’t necessarily if you necessarily die, but power of attorney, medical power of attorney talked to me about some of the other aspects of this whole estate planning that are not necessarily about your assets, but but things like things like the power of attorney, medical power of attorney.

19:05
Right. So I always look at signing your estate as not only planning for death, but planning. anticipate what happens if you are incapacitated if you’re sick, and in the hospital and can’t do certain things who will do those things for you. So in that light, in addition to put it in place, either a last will and testament, or trust, I always tell my clients that we may need to also execute financial power of attorney. And so a financial power turning gives an agent someone else. The ability to manage your finances to manage your money while you were sick, in the hospital in Kansas take care of that aspect of your life. So it’s given someone else the ability to do that to go The bank for you to open your mail for you. So that’s one of the other documents that I always recommend that clients put in place. Also, if there is a need for nursing home care, the person who has the financial power tourney can also have the ability to set up a specific type of trust that can some can assist the individual in at least saving some of the assets. So they don’t spend it all on nursing home care. So I always feel that the power of attorney is a valuable tool in your estate plan and one that should be utilized in the event that you’re unable to physically, emotionally mentally take care of your finances.

Will Bachman 20:51
Yeah. And then the medical power of attorney would give someone the right to actually look at your medical records, you know, because of HIPAA laws, and then also make medical decisions for you. So if you’re in let me say, Tell me if I’m correct here. So if you’re married, that might automatically maybe be your spouse, but maybe if you are have a significant other, that’s like a long time, you know, significant other, but you’re not married or you want someone else to make medical decisions for you, then you’d want to get that in place as well.

21:27
Right? Yeah, so you’re correct. Well, I mean, that medical power, medical power of attorney or some people call it a health care proxy, give someone else the ability to make medical decisions for you, if you are unable to make those medicals medical decisions for yourself. And in most states, that if you’re married, your spouse will get the ability to make certain decisions for you. And I know New York State has a law that tells tells you if you don’t have a medical or health care proxy, these are the people who can make medical decisions for you. But but it with that said, there are certain decisions that you want someone else to be able to make for you. And I’m assuming that these decisions you would have talked to them about for example, if you’re in a coma, or if you’re in a permanent vegetative state. Do you want to remain on life support? Do you want artificial nutrition and hydration? If you pass away, do you want your organs to be donated? Right, some of those decisions, you need to speak to your loved ones about and give someone the ability to make those decisions for you. Because a lot of times what happens if you don’t have anything in writing, certain things will go according to hospital policies. And hospital policies may not always align with your, your beliefs, some people have various religious beliefs about what they can and cannot do in terms of health care. And so often, well positive may not necessarily align with those beliefs. So you want someone else to be able to make those decisions for you.

Will Bachman 23:16
One of the things that Margaret and I one of the forms that we filled out was a guidance to caregiver form or guidance to Guardian form on which which was really required a lot of deep reflection, this form that we filled out when we did our plan, asked questions like, you know, how do you want your children to be raised? what is important to you? What kinds of things would you want to have, you know, to be funded? And what Yeah, so I mean, it was really pretty profound. filling this out, tell us a little bit about the sorts of questions that parents should think about, and that what the what kind of guidance they should leave behind for a guardian.

24:01
Right. So I always say that no one knows your child better than you do. And so if you’re not going to be around to be able to care for them, and take care of and you want the person who’s going to be stepping into that role to have as much guidance as possible. Right. So some of the things that I think about, I am a mother as well, I have a nine year old son, you know, you think about your children. And sometimes you have to adjust these, these guidance in these instruction as your children age and because, you know, they change as well. So some of the things that I think about and some of the things that I asked my clients to think about is, for example, school in, you know, what kind of education Do you want your children to have? Is there a particular school that you’d like them to go to? For example, religion? Do you raise them in a particular religion? Do you want them to your guardian to continue to continue those religious beliefs as to the best of their abilities if you’re unable to continue raising your children, and we talk about guardianship Well, I also think it’s important for listeners to understand that guardianship doesn’t only come into place if someone passes away, if the parent is incapacitated mentally or physically, to the point where they can care for their child, that child will need somebody else to care for them. Right, so So you have two instances of which guardianship can come into place. And also just think about other family members, other people or in your children’s lives, who you still want them to be in contact with who you still want them to have a relationship with, as they grow older, in terms of finances, right, so you want to be able to teach your children how to be become financially responsible. And so at a certain age or certain stages, you can start allowing them, you know, access to money. And so you may need to based on your personal beliefs, you may need to give some instructions to your guardians about what those beliefs are, and when you think it’s appropriate for your children to have access to certain funds. You know, so so the the, the things that you can guide your guardians, about invariance, and also based on your family based on your children based on their temperament based on their needs. If you have a child who has a special need, then you also have to think about that. Think about what their needs are what needs to get their special medication that they’re required to have. They have to go to specific doctors. So you have some about your children in their own particular circumstances.

Will Bachman 27:06
Great order of magnitude Marine, maybe you could help us get some sense of the rough cost to work with a trust and estate attorney to to create this entire plan with all these different documents power of attorney health proxy, the trust, I mean, I’m sure it depends a little bit, but what’s kind of the range that 80% of people should be expecting to pay? And maybe you can you give us a sense of that.

27:36
Yeah, um, so this is a this is a question I do get a lot. And I have to say that sometimes it’s it’s, it’s based on one where you’re located. So for example, in the metro New York City area, you can probably expect to pay a lot a lot higher cost than if you were say, upstate New York and Alberni. So for, for New York City for sale will base plan. So this is where you have a will and the other documents, so the power of attorney and the health care proxy burial instructions, so you can expect to pay about 1000 to 15 $100 for a full plan. And if you have children, and that requires the attorney, and it requires the attorneys also designate guardians for your children. So you can be looking at a cost between 1002 $1,000 if you have, if you have a trust based plan, obviously the cost is going to be much of your and you can look for a trust to cost anywhere between 2500 to $5,000. And that depends also on the complexity of the plan that you’re putting into place. You can have for example, a will base plan that also has a type of trust in the in the in the well. And so for parents who have minor children and don’t necessarily wants to do a revocable living trust, they can put a trust in their will. But the fact that there’s a trust in that will is going to claim to be higher than basic estate plan. Okay.

Will Bachman 29:28
And does do all these documents did they get like filed somewhere with the state or does it just you just kind of hold on to them and then your files and your attorney holds on to them and they just kind of sit there in your in your on your filing cabinet.

29:46
So practices differ differs. And it’s based on you know, Attorney preference and client’s preferences. So the one document that can be filed with the court to receive keaveny Is your will, right. So you can go to a court in New York and pay a fee of $45 for the court to hold on to your will. Or some attorneys will hold wills and estate plan in their office, they’ll put these documents in a safe, while others will return the original documents to the client. And then it’s up to the client to keep those documents safe. I always tell my client, if I’m returning the documents to you, the one thing I don’t want you to do is put it in your safe at your bank. Because especially if it’s a will, because once the bank learns of death, they everything is frozen. And so then there, there’s going to be a problem and getting your will out of the safe deposit, then you have to petition the court to get those documents back. Right. So put it in a safe place in your home, let somebody else know where those documents are located. If your attorney is willing to hold on to those documents, by all means, have them hold on to the documents and then have copies, but always let someone know where the originals are.

Will Bachman 31:09
Okay. And no additional this, maybe you have some thoughts on this. But also, you probably want to have some way to give to your next of kin or to your significant other, your passwords to sites so that they can continue accessing your bank account and all that. So, you know, if you use a password manager, you could just give one password to your to your password manager, if that has all your other passwords. But what do you recommend to clients about, you know, passing on that important aspect of their, of their state?

31:49
Right, like for certainly for things like I guess what do you call them social, you know, Facebook and Instagram and stuff like that, I would say you know, have somebody else give someone your passwords, to those documents, also passwords, you know, paying bills, a lot of people pay their bills online. So passwords to get into those accounts. And you can have lists as you end there. They’re also I know apps in different companies that you can use to generate password, then that will store passwords for various different situations. But when it comes to bank accounts, and stocks and bonds and access to those financial documents, I always want people to be aware that once these entities or these institution learn offset, everything is going to be frozen, no one will be able to access those websites in order to look at the documents or look at the information. The banks will shut down access to those accounts, because they’re cautious and they want to make sure that people who doesn’t have the authority to access those records aren’t accessing those records.

Will Bachman 33:10
Okay, that’s important to know, what would your recommendation be? I mean, on finding a trust and estate attorney? And is it? Is it a state by state thing? So, you know, if you’re if you’re in California, you might you know, you you have to go with a California attorney? And how would you? How do you recommend finding some options? And how do you recommend, you know, interviewing the, you know, several different candidates to decide who you want to work with? What should you look for?

33:42
Right? So if they plan like most other legal documents, or anything legally, is a state by state thing, each state has their own laws and their own rules about how things are governed. So an attorney that’s licensed in New York may not necessarily be licensed in Florida or California. So one of the things I always say you know, speak to a loved one or friend who has done their estate plan and find out if they you know, there’s somebody that they worked with, who they were comfortable with and who they felt represented their needs and and speak with them and get a recommendation. You can also go to your State Bar Association and they will have a list of attorneys who practice in certain areas of law and you can definitely get their names and contact information and then call them up and ask if they will give you a brief consult or 30 minutes console. So you can ask them questions about their practice, how to practice and and what they cost in their chart. Are these and so forth. So it’s definitely a state by state thing. And but you can also ask an attorney if you know, an attorney in one state, you can ask for recommendation, because oftentimes, you know, attorneys will know otter attorneys that practices in other states and can give you a recommendation, we’re not attorney.

Will Bachman 35:21
Great, and why not? Why not use what say, Legal Zoom? Or one of these online repositories of legal documents? Are there any categories of people that have such a simple, you know, simple situation that it could make sense to use the out of the box solution? Or when does it make sense that you really need an attorney? Like, what are the risks of just using one of these templates that you find online?

35:49
Yeah, but I always get that question. Well, and I always say that one of the risks in using the legal zooms are the other out of the box will template is that it may not be very specific to your situation, and it may not conform to your state rules about how a will should be drafted, what makes a will valid in your state, right. So each each, where when it whenever it drops a little whenever you sign a will, the state in which you reside will govern, that will going forward. So that will need to conform to your own state laws about what makes a wills valid. So for example, I know like in New York State, a handle will only valid on a very limited circumstances, and a will must be signed in a particular way and manner for it to be valid. So you know, a lot of these out of the box, or these online templates, don’t explain the various requirements. They have the various things that make a will valid in your state. And so I’m often a little bit very about using them, just because you may be putting something in place that later on will turn out not to be valid, and your estate will end up going through intestacy. When didn’t want it to

Will Bachman 37:18
you mentioned that the laws apply to where you live, what happens if I live in New York State and get a will and trust plan done now. And then I moves you know, several years from now, what I need to go through and get a new whole new thing done if I move to a different state?

37:37
Well, not necessarily something I recommend that you always update your plans every couple of years, especially if things change in your life. But no, if you had a well, if you live in New York State. And when your will was drafted and signed in New York State, it’s going to be valid in New York State. But it’s also going to be separated in any other state that you move to because at the time it was drafted. You were living in this state and it was valid in the state in which you live. You don’t necessarily have to change it if you move to another state. But you do have the option of doing that if you choose.

Will Bachman 38:15
that’s reassuring. Maureen, if folks wanted to reach out to you, what’s the best way to either find your website or to contact you if they wanted to have a console?

38:27
Right? Yeah, so you can find me online, you can go on to our website, it’s www.wp AS la w.com. And you can fill out one of our contact sheet form and one of our assistants will reach out to you and they’ll set a time for us to have a 30 minute consult in those consoles are always free of cost. So if you just need to figure out what you need to do, what you need to put in place you can call me up I’ll give you a you know, I’ll have a free consult with you. You can also reach me by phone, My phone number is 347-778-5130.

Will Bachman 39:12
Marine, thank you so much for joining today. This is hugely informative, and also really appreciate you providing some documents which are available for download in the show notes. So those those documents will help you get started there with some checklists of all the documents you need to put together before you see a trusted estate attorney. Maureen, this was hugely informative. Thank you so much for joining today. Thank you so much for having me.