Gimme Some Truth, Ep. 6 – “Estate Planning 101” with guest Megan Jerabek

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Note: This episode was briefly removed and editied to take out a factual error. We apologize for any confusion.

This week on Gimme Some Truth, we brought in our first ever guest: Megan Jerabek of von Briesen joined us in the booth to help us talk about estate planning. Check it out on iTunes or SoundCloud and don’t forget to subscribe!

Transcript – “Estate Planning 101”
[00:00:00] Welcome to gimme some truth I’m Kevin Castro your podcast producer and your co-hosts are Clint Walkner and Nate Condon the co owners and financial advisors at Walkner Condon financial advisors in Madison Wisconsin. This is a podcast series dedicated to eliminate some of the darkness around fees. Conflicts of interest and the motivation behind recommendations in the financial planning industry.

 

[00:00:22] Here are your hosts.

 

[00:00:38] (Intro Music.)

 

[00:00:50] Welcome to gimme some truth.

 

[00:00:51] Today we’re talking about estate planning and we have a special guest here in the podcast booth with us to lend some credence to the conversation and to guide us in the proper ways to plan for our estate.

 

[00:01:06] Yeah Nate you got the room set up just as you want. So now that we’ve gone through podcasts a couple of times now he’s very particular in how the room gets put together and where Megan was sitting and where you’re sitting so.

 

[00:01:17] Consistency so important is important. That’s right consistency and quality.

 

[00:01:21] So so as the as we normally have we’re going to have a disclaimer here because we have an attorney in the room so the information in his podcast is for general information purposes. The information is provided to inform and not to advise. This podcast does not constitute legal advice. Listeners should consult legal counsel to determine how this information applies to any specific situation so don’t do anything yourself right. That’s basically what it means. Basically what it means to have a professional do it and Meghan’s affectional here so they could have said that in three words.

 

[00:01:54] But of course it takes a paragraph. That’s why I think we said the same thing four times.

 

[00:01:58] So a lot of school to be able to write a very simple concept in nine sentences in this document what actually is taught in you know getting your legal degree what is it actually about the law or is it just about writing. You know one sentence in a paragraph it’s a lot of semi colons whereas it does do random words and just putting them together and calling a word even so it’s not.

 

[00:02:27] All right today we want to go through a couple of different things about the concept of estate planning with Megan. And we want to go through some misconceptions as well.

 

[00:02:36] So let’s just start out with you might you just introduce yourself give a little back on yourself and we’ll talk a little bit further about what estate planning actually is.

 

[00:02:45] Yeah. Well thank you for having me. I am Megan Jerabek and I am a shareholder at the law firm of von Breisen and Roper and we are in many different cities around the state I think we’re the fourth largest law firm in the state now. And I am the co-chair of our trust and estate section for the firm so the majority of my practice focuses on estate planning for individuals and business succession planning for family run businesses. I also do some real estate leasing work and some general business work but this is really my area of expertise. So thanks for having me. I’m looking forward to clearing up some misconceptions about estate planning. So where should we start.

 

[00:03:27] Well let’s just start with kind of defining what estate planning is I think a lot of people know that something happens when we die and a document is basically read but let’s just kind of go through what exactly is the state planning.

 

[00:03:40] Yes so most people when you think about estate planning most people think about the use of a will and what happens when you pass away and you have a will in place is that the person you nominate in that document as your personal representative or executor. Different states call it different things. That person takes your will down to the courthouse in the county that you live in when you die and they file your will and a court process starts. And that court process is called the probate process. And the point of the probate process is to collect your assets pay your final bills and expenses and distribute out what’s left according to that document and the personal representative is really the boots on the ground doing the work and then they report that work back to the court and the court oversees the process. So that’s generally what people think about when they think about having an estate plan is having a will but that really is just a portion of what a true estate plan is that will help you navigate or transfer assets at death. But it does not help in any incompetency planning for if you need help during your lifetime doesn’t help you with medical choices funeral choices financial assistance during your lifetime. And really it is not the most common technique to transfer assets at death anymore either. As I said the process is really something that utilizes the court to wrap up your affairs.

 

[00:05:10] The majority of people now use what’s called the trust plan and that’s really an alternate to a well plan that allows you to have your estate privately administered so not through the court process but instead the trustee in that in that case would be the one running the state. They would do the work but you would not have to do any of the reporting to the court or use the court process to get through the administration of your state. So that’s really the most common approach now. And the need to knowing what an estate plan is is knowing that it is there there’s really a bunch of different documents that together form a plan a will is a piece of an estate plan. It is not honesty.

 

[00:05:56] And so how long does that will or probate process last most times.

 

[00:06:01] Yes so even a simple probate takes a number of months to get through the court gives you between 12 and 18 months to finish a probate. And if you go beyond that then you have to let the court know why and there are a number of probate that do go beyond that time period if you’ve got beneficiaries who are arguing over something or if you’ve got assets that are taking a long time to administer or liquidate. But even really straightforward estate plans take between seven and 12 months.

 

[00:06:30] And so if we contrast that with you know kind of a trust planning type of situation I mean how does that impact the timing and things like that does it take a lot less time or not and it can.

 

[00:06:42] The the key to the administration on the trust side where you save timing is that the transition of power from the person who made the trust to the successor trustee happens instantaneously upon incapacity or death. So if I had a trust plan in place and I was the trustee of my own trust when I died my successor trustee automatically has the power to take over as opposed to a will plan where the personal representative is just nominated by the decision. And they don’t actually have any power to take over the decedent’s state until they are appointed by a court. And so in that case a trust saves time in the transition of power and authority whereas a well you have to get into court you’ve got to get on the court calendar or in some counties you just need to file the paperwork. If nobody opposes the appointment of a personal representative then that process can be fast but it’s not as fast as under a trust because it’s instantaneous with a trust. You don’t have to wait for court authority to transfer that.

 

[00:07:50] And commonly when you set up a trust I mean if we look at the general hierarchy we’d probably see if a husband or wife situation the husband in the wife would be the cult trustees while they’re living. And then if one person becomes incapacitated the other person becomes the primary trustee correct.

 

[00:08:07] That’s right if you’ve got a joint trust that’s most often how trustee ship transfers is they are joint trustees together if one becomes incapacitated or dies the other person takes over as the sole trustee and then when that person becomes incapacitated or dies they would nominate a third party to serve.

 

[00:08:27] So one misconception we hear a lot from clients is I’m hesitant to do trust planning or to use a trust because I believe it’s inflexible or it requires me to kind of understand what my life’s going to look like 20 years down the road. Can you just speak briefly to the flexibility of trust and kind of how that works.

 

[00:08:46] Yes some people think that in order to do a trust you have to list your assets in the trust. And so then every time you get a new asset you have to contact a lawyer to update that. That’s not how a trust works. In order for a trust to be formed there has to be something in the trust. But the majority of trust documents say we hereby transfer a dollar or we here by transfer $10 into the trust and so the trust is now up and running.

 

[00:09:14] And so then when you want to put assets in the trust or transfer assets to the trust you actually do that with the custodian of the asset so you would do that when you open up a new account. You would name the trust as the owner or if you have existing accounts you might transfer those accounts into the trust but it’s not actually in the trust document itself. So when you acquire more property you really don’t need to come back to the lawyer to have any legal work done. It’s a matter of following the instructions on how to open accounts appropriately or how to fill out beneficiary forms appropriately to direct them to the trust.

 

[00:09:52] So that’s one common misconception when it comes to trust work is that people think that there is this ongoing need then every time they acquire property to get a lawyer involved and that’s just not the case when it comes to flexibility to respond to change in circumstance a trust is equally as flexible as a will in that if something changes in your life you come and you get the trust updated. That would be the same case for a will. If something changed in your family circumstance and you wanted to change how you structure your inheritance you would have to update your will to do that. So in that respect there are the same.

 

[00:10:30] There is no part of the general living trust document that’s in revokable until there’s incapacity or death and so and more commonly I think people think of it as as a trust being inflexible or irrevocable but the trust that you’re speaking with I mean are all revokable living trust and that’s the most common trust you see by far.

 

[00:10:52] That’s right revokable trust or living trust they’re the same thing just called different things by different attorneys.

 

[00:10:59] That is the main estate planning mechanism you’re revokable trusts are used if you are going to transfer property outside of your control or you’re going to gift property to your children or other people and they are. You want to put some structure around that irrevocable trust are much less common. They’re used mostly by people who want to do tax planning or additional asset planning but the majority of people who do kind of basic standard estate plans that is a revokable trust that can be changed at any time.

 

[00:11:35] That for full disclosure Clint and I have both had trust written by Magadan for our respective families. When we were in our thirties and I was wondering if you could just speak briefly about the misconception that trusts are only for people that are retired or people that are kind of getting their finances in order. You know more toward end of life you know where and when does it make sense for somebody to have a trust. In other words does it make sense for a 25 year old perhaps to have a trust where maybe they would look at it and say I’m not old enough to have a trust yet.

 

[00:12:11] Yeah. It’s a good question and we get that a lot. I will say that in my opinion the real difference between a plan and a trust plan is how you want your estate administered. It doesn’t matter how many assets you have. It doesn’t matter how old you are. The question becomes do you want to work through the court process when you die or do you want to do a private administration. And so in my opinion there’s really no reason to go through court if you can avoid it.

 

[00:12:39] OK. There are certain counties where going through the probate court process is even longer and more arduous because of the volume of that county walk in Walkingshaw counties for example are very backed up their probate process takes a longer time to get through just because of how many people they have living in those counties.

 

[00:13:00] And so in those counties we wouldn’t want anyone in a will plan if we could avoid it because that court process just takes much longer than than you would want whether you’re 25 or 55 or 85 if you live in a county where the probate process is maybe a little bit easier to get through. There would be some people that would say well you can use it will in this county because it’s not that hard to get through probate. And my response to that would be OK but why would we go through probate if we don’t have to. In my opinion there’s just no reason to go through the court process if we have a great way to avoid it.

 

[00:13:36] And that’s not dependent on the age of the person or you know the size of their estate. It’s just how do you want to work through that administration process.

 

[00:13:47] How do you know where you’re subject to the probate process is that where you die.

 

[00:13:51] Actually the county that you live in when you where you die I’m sorry the county you live in when you die.

 

[00:13:57] So you might die on vacation in Arizona but if you reside in Dane County Wisconsin that’s where your probate is going to be.

 

[00:14:04] So it’s where you’re domiciled or where your residence is when you pass away your residence so if you are in assisted living that would be a residence. But if you were in like a hospice or something like that wouldn’t necessarily be a resident.

 

[00:14:16] That depends a little bit on you know the specifics of the circumstance. But yes hospice is not changing your residence for the most part because you’re not there long term. There are some specifics that go into deciding where someone is domiciled. If there are situations where they physically were not present in the same place that they consider themselves to be living in. And that kind of has to get worked through at the time to look at the circumstances and figure out where the appropriate place would be for probate. But again it’s all avoided if you use a transplant because we don’t it doesn’t really matter what county you were located in down filed in the trust is going to govern the administration and we don’t get involved in the court process so how do you handle the main argument.

 

[00:15:03] I mean I’ve heard this from multiple people and they say you know my attorney is pitching me a trust just because they want to earn more and fees and you know we get that a lot. And I think that’s a big misconception.

 

[00:15:15] It is because I would actually argue that a well-planned results in more legal fees than a trust plan or can because the well plan has to be administered by court. Generally people are not comfortable working through the court process on their own because they don’t know the format of things. They the filing requirements that kind of stuff. And so I would say actually the administration of a will or the use of the probate system can result in higher legal fees on the back end because you need not only somebody to assist in doing the work you need someone to assist in reporting the work. So there are kind of two levels of administration they’re involved which could result in you know more legal fees or more legal work being done.

 

[00:16:01] So in the majority of cases it’s it’s more of the idea of you know pay pay for the service now or pay for the service later but you’re not going to avoid it necessarily in most cases you’re going to pay for it at some point. It’s paying for it now if you will just gives you much more control and a much better design of how you want to set up as well as a much cleaner an easier path from what it sounds like.

 

[00:16:24] That’s right. I mean either way in my opinion the. Et al. I guess I can speak to is our the way that we do trust and we’ll plans that our office the trust planning is we’ve got to do it in such a way that is efficient that there’s really not a whole lot of difference in cost upfront for a trust plan versus a well-planned that might not be the case that every law firm but at our law firm that that’s the case.

 

[00:16:51] And so.

 

[00:16:54] To do a trust plan now is actually saving you fees on the back and down the road. So to say that I want to will plan because it’s easier and simpler in my opinion is kicking the can down the road a bit when it comes to fees and how often or in what time frame do you see people that have to do a review of those trusts. Yes so any state plan will or trust. In my opinion should be looked at every three to five years or so. That doesn’t mean you need to change it every three to five years. It means every three to five years you should take it out read it. Make sure the people listed in it are still people involved in your lives.

 

[00:17:31] Think about whether something has changed in your circumstance in the last three to five years. And whether this plan still makes sense. If so then you should call your lawyer and sit down and talk about the updates you want to make at that time. And if not then you put it away for a couple of more years and figure out then if something changes major life things that you would want to consider a big swing and assets. A big change in tax law having more kids or grandkids especially if there’s anybody born into the family with a disability that you need to do some planning for any divorces or other things any creditor issues of your children. Those are things that would you would want to consider in reviewing your plan to see if it still makes sense. It doesn’t mean every time you have a child or there’s a divorce you need to change your plan depending on how it’s written. That might be something that’s taken care of in the plan already. But those are things to consider when you take it out and look at it to say does this plan still work in light of these things happening in the last few years.

 

[00:18:36] And I think a lot of people spend a ton of time on going back and forth about Will intrusting get lost in the weeds of that conversation and they forget that there’s so many other documents like you alluded to earlier in our conversation saying hey there’s other documents that are going to be executed no matter what for everybody. So you know who needs an estate plan. Everybody needs an estate plan and whether you know you get a will or trust is just one component of that larger plan.

 

[00:19:01] That’s right. In my you know practice we consider a plan to be complete when you have. All of the items that you need in place to ensure that somebody can take over and help if you need help during your lifetime or a death with finances and health care decisions and for the majority of people funeral and burial choices too. So the number of things that you would need to do that to get in.

 

[00:19:27] What I would consider to be a full estate plan is a will a trust a health care power financial power a living will or a declaration to physicians a funeral and burial form. You would need some documents funding your trust to get that to work appropriately. You would need a hip authorization to make sure your agents have access to your medical records if they need to decide if it’s time to step in and help you beneficiary designation forms that are updated to make sure you’re listing the right people on those to avoid complications there. So a plan is you know really what it’s indicating by the word it is a full plan.

 

[00:20:09] It is not just a piece or two in order to have a complete estate plan you want to make sure you’ve got your bases covered because when we do see a number of people come in who have a will but don’t have a health care Parver Terni for example. And then if something happens we are in court getting a guardian appointed to make their medical choices for them because they never got that piece of the plan or they don’t have a financial power of attorney in place and maybe they are needing some assistance paying their bills or doing other things and the bank is saying we can’t allow you son to step in and help your parent to do this because you don’t have the authority to do it. A will means nothing until you die. There’s no lifetime planning involved in that piece. And so it is unfortunate when we see people come in who are trying to help their loved one and don’t have the authority to do it because their parents thought well I have an estate plan because I have a will but they didn’t have any of the other documents that really can sometimes be even more important to ensure that you can get the assistance you need when you need it.

 

[00:21:19] Yeah so they got a lot of people are just back down and go I’ll just add Peabodys payable to us and all my accounts and there won’t be any sort of court process from death. And so I’ll just make it easier for the beneficiaries. But it doesn’t really make it easy at all for them.

 

[00:21:31] These entities are what I would call kind of do it yourself estate planning you know and we get on a number of people that say well I’ve added a payable on death designation to all of my accounts. And then inevitably there is other assets or other accounts that that you forgot or there’s life insurance that wasn’t done appropriately or we’ve got a house that doesn’t have a designation on it. And so then what happens is we end up in court with no will which is a longer process with more notice requirements and all of these things. So that do it yourself estate plan kind of crumbles and causes more work on the back end. So Peabodys antibodies can be effective if they are coordinated with a plan if you are trying to do estate planning on your own by adding those designations. You’re limited a little bit by your understanding and experience in this area and so can it work. Yes. Does it work. Most often no.

 

[00:22:31] All right let’s just take it kind of a garden variety scenario here and obviously we’re going oversimplify it just to kind of illustrate the point here. But let’s say that we have a family with two minor children 15 and 12 whatever it might be. And the parents have half a million dollars of total assets and they pass away completely unexpected.

 

[00:22:55] So half a million dollars. Fifteen year old child 12 year old child what happens to the money. How does that work. And at what point does the kids actually take over possession of those assets.

 

[00:23:09] So if it was a married couple and you had one death unexpectedly OK then the natural if as long as the kids are kids together then the natural recipient of that money is going to be the surviving spouse. We may or may not need a court process on that death depending on how the assets were titled. OK if everything they owned was jointly titled then maybe it all transfers outside of court to their surviving spouse. But inevitably there are certain items that have one spouse’s name and not the others or certain IRAs or other things we have to administer. So we go through that administration process. Now let’s say that it is the second death or that couple dies together in a car accident or some other unexpected situation where now we are to the kittens OK because there is no surviving spouse without a plan. Those kids are going to receive those assets when they’re 18 or 21 depending on the type of asset. And that’s the law of the state that they live in. And I don’t know about you but I don’t have a single client that wants an 18 year old child receiving any amount of assets. $10 is usually too much for an 18 year old to want to receive outright with no restriction. And so in my opinion a lot of one of the big misconceptions is I don’t need an estate plan until I have amassed enough wealth to make it worth it which is missing mostly.

 

[00:24:37] Couples with young kids and those people in my mind are the ones that really need a plan because if something happened tomorrow those kids would receive those assets at a very impressionable time in their lives and those assets would maybe not be insulated from bad choices then. And so. My husband and I have three boys 5 3 and 11 months old. You know we are the prime candidates to need an estate plan to make sure that if something happened to us tomorrow we have trust and other things set up for our kids to delay when they would take control of those assets. OK. The assets are still available for their use. It’s just somebody else is in charge of them until the kids have gained a little bit more maturity in age and an understanding of finances before they’re given outright control.

 

[00:25:33] And so when you’re 18 they normally don’t pick up the phone and call her financial adviser that’s for updates.

 

[00:25:37] That’s right. They buy a really nice fast car and then they don’t have money left for their education. Right. So that’s oversimplifying I’m sure some people listening have very responsible 18 year olds but it’s so in my mind young families are a particular group that should really pay attention to this. Oftentimes the barrier for them to get in is that they don’t understand the process that maybe they haven’t found an attorney that can explain it to them in a way that they feel really comfortable with or Honestly they don’t know who they want to name as guardian of the kids.

 

[00:26:11] And that stops them in their tracks and they say we can’t decide on this. We can’t figure this out. And so we’re not going to do anything which obviously is you know a bit not the best way to approach it but I understand that’s an emotional decision to make. Your attorney should be able to help walk you through that process and that decision making to give you some ways to work through that. Because my my comments my clients always is if it’s hard for you imagine how hard it’s going to be for your family if there’s no direction.

 

[00:26:42] And so kind of a half step if you will somebody is you know one to make progress. But I just don’t feel like they are to the point of being able to to answer every question would be an initial sit down with somebody like you or another attorney to at least kind of understand the process and have somebody explain to them kind of the steps that are in front of them. Let’s at least get people to that stuff. Is that a fair assessment.

 

[00:27:06] Yeah and I’ll tell you the majority of people if they get to that stat the people that I meet with then we can walk through that process and they they really take a deep breath at the end to go OK. You know all we really needed was someone to help guide us through this. And so I find that oftentimes it’s just getting to the table and once they’re there a good attorney will be able to help walk them through that process in a way that makes sense that they’re comfortable with. They might have to go home and discuss a few things or they you know think through a few options. But your attorney really in that meeting should be able to help lay it out in a way that’s easy to walk through for you.

 

[00:27:44] Well and it’s so easy to update too. I mean it literally is just a few forms in many cases to update something. I mean I know that when I filled out the documents with you Megan is the hardest part for me was to fill out like the funeral form because I had never even thought about it or even addressed it in my life. You know I don’t know what my funeral is going to look like like like everybody else my age I’m going to just throw a big party. But you know is that you know what but do I want to be cremated do I want to be put in the ground. How do I want it all to happen so. That’s right. I mean I want it like in a coffee can Big Lebowski style just out on some cliff but I will say that form is very interesting to watch people fill out.

 

[00:28:21] I learned a lot about that.

 

[00:28:24] There’s a couple of other friends assets that I want to ask about you know number one where there’s a lot of digital assets out there now a lot of pictures that are really important to people.

 

[00:28:33] Facebook you know just having that whole thing you might be on Facebook for the last 15 years I mean where do those digital assets go and how do can we pass those on if we want to.

 

[00:28:42] Yeah that’s a really hot topic in estate planning right now. It used to be when you wanted to know what someone owned when they died as you went into their office and you opened their file cabinet and there was everything that they own every account every statement every piece of information you need. You cleaned out their house and that’s where their pictures were and their photo albums in there you know CDs or records or whatever. And that’s just not the way that it works anymore in this world. And so a digital asset planning is becoming a very hot topic. It is not an easy topic to understand right now because each company that owns a digital asset or holds a digital asset for you has their own contract service contracts in place and many of those deal with how you transfer that ownership of that asset and whether you even own it. You know a lot of the music sites for example you are not buying the song you are buying the right to listen to the song. And when you die that right that license is done on your e-mail content for example you own your e-mail content but how do you transfer it. So there are a lot of states including Wisconsin that have passed digital property laws to deal with the right for someone to transfer their digital property.

 

[00:30:07] And also the right for somebody to nominate an agent to work with that digital property either if they become incapacitated or after their death. Wisconsin does have a digital property law in place that allows you to do that. Are documents that our firm have been including digital planning for years now because we saw this coming and so it’s important.

 

[00:30:34] However you are a bit beholden to the service providers and what their Terms of Service are because you are signing a contract.

 

[00:30:43] When you click on the I agree button after all of that stuff you don’t read. You are agreeing to whatever their policy is. So it’s important in all of our state plans we give our clients and digital property inventory sheet at the end for them to write down what they have where it is what their passwords are.

 

[00:31:03] They want to. So that part of the problem with this property is just even knowing it’s there. You know. And so the inventory helps in that way. Our documents in our financial power of attorney our will and our trust all deal with transferring authority to your successor decision maker to help manage those assets and then they are property so they are going to transfer subject to the terms of the service contract. If you have the right to transfer them they’re going to transfer like any other property under your estate plan how you effectuate that is the hard part. And that’s really depends on what service providers you’re with what kind of property we’re dealing with. It’s becoming more and more complicated. But on a national level the service providers are working with lawyers in this area to try to figure out a path forward for their for their clients or customers.

 

[00:31:55] Does she say if she waits fluctuates she wait.

 

[00:31:59] I don’t I don’t even know if it doesn’t work like that.

 

[00:32:02] I think we get Calvin a check in fact checking the video now slightly faster that’s good. Already the.

 

[00:32:16] Is like right now he’s checking on that to see that that’s a word I’m just using it clearly in the wrong context at the wrong definition. It is a fluctuation. All right. OK. Just something to eat. I thought a story.

 

[00:32:29] All right good. Back that fixed it.

 

[00:32:34] I’m going to say it is a actuates. That’s incorrect.

 

[00:32:39] So make it out before you have one. Do you have a story or something like that or a horror story about something that happened in the state planning process that you know isn’t a celebrity but a real world example.

 

[00:32:52] Well there’s a few high profile ones out there right now of course Prince is the one everybody’s talking about because he supposedly died without an estate plan. So his his administration will be caught in court or settle outside of court for a while. So that’s probably the most famous one recently you hear a lot of celebrities estates being fought over or beneficiaries coming in and challenging things the majority of. You don’t hear about that a lot because they use transplants. And so they’re not in court. And so anything that is being fought over is being done outside of the court process or you would hear about it a lot more. And also because the court process is public record and so a lot of people who have assets whether they’re celebrities business owners is another group that they don’t want any part of their estate going through the probate process because they don’t want valuation or information about their business to be public record. So a lot of that is kept private which is a good thing. I have a horror story of a client who did try to do their own estate planning mine.

 

[00:34:05] This client actually came in to me and they said well I have an estate plan and I just need to update a couple of things. And

 

[00:34:14] they showed me their estate plan and it was a plan that they went online and found and they drafted the plan and the plan left everything to the husband. OK as a married couple is a woman who is showing me these documents in her will that she got online left everything to her husband. And then she had handwritten in my life insurance goes to my son and I said Well tell me about your life insurance how much life insurance you have. And

 

[00:34:42] she said well I have a million dollar policy of life insurance and I want that to go to my son right away and not to go to my husband. And I said OK well you’ve written it in your will document but life insurance actually transfers by beneficiary designation. Do you know who the beneficiary is on your life insurance. And she said well yeah it’s my husband because it was filled out a long time ago but I signed this well after that so that will work right. No it wouldn’t have worked. The life insurance would have transferred to her husband as the named beneficiary. There would have been no life insurance to transfer under her well document at all. So the fact that she wrote My son gets my life insurance would not have actually gotten the son the life insurance. And this really freaked her out. When we talked through this because she in her head had that she had done what she needed to do to get this on this million dollar policy and she had not. And so the thing about information being available online and sources that provide you with Plan documents they are not advising you on how this process actually works.

 

[00:35:50] And so you have to be really careful because it might not actually work the way you think it’s going to work because you have not seen an adviser you have filled out a form and could it work. It could work but it wouldn’t have worked in this case. And there’s a number of clients who have similar stories where the plan just would not have done what they thought because they didn’t seek an adviser. And there we would have been fighting about it probably depending on the relationship between the Son and the father.

 

[00:36:20] So I would fight over for a million bucks.

 

[00:36:23] That’s what I’ve heard horror stories too about people over the UW in the pension system who have spouses as beneficiaries and they forget to update that beneficiary form and lo and behold their new spouse gets pretty upset when their spouse gets the entire pension amount.

 

[00:36:40] And there is nothing that can be done at that point.

 

[00:36:42] Well on their ex-spouses if they’re divorced the Wisconsin does have a law that says that if you are divorced and your documents were done before you were divorced they will treat your spouse as having predeceased you so that it does avoid kind of the situation that you’re talking about. If you execute the plan documents after your divorce then you’re showing intent to keep your ex-spouse in which the majority of people don’t do.

 

[00:37:08] Right.

 

[00:37:09] But we do have at least a safeguard there to keep ex-spouses from taking under or just an outdated plan. Now does that mean it will get to the new spouse. Probably not. Without you know some additional process the new spouse does have certain rights under Wisconsin marital property law. But the old plan if it had not been done probably said to my spouse Sally. And if not Sally to my kids and build divorces Sally and Sally doesn’t take any more of the plan because they’re divorced and we have a law that prohibits that but it doesn’t get new wife Betty in. It gets to the kids and Betty’s going to have to exercise some spousal rights through the court system or through another an outside settlement to get anything under that plan.

 

[00:37:57] And so you do have a fight it might not be between the ex-wife and the new wife it might be between the new wife and the kids well well that’s why you don’t web M.D. That’s right a state plan you know of your investments you don’t guarantee your accounting. I mean there’s just certain things where I think you need it.

 

[00:38:16] I mean this is our personal opinion and we have three professionals in the room but well is a professional too. So for professionals in the room but you know it’s a situation where I think you need to take a step back and sometimes you got to pay some people to get some things done that would it wouldn’t be proper legal podcast without some Latin involved right.

 

[00:38:34] Or is it a caveat something shabby out on tour. There we go. Right. Let the buyer beware right.

 

[00:38:39] Well and I will say that working with professionals like you guys who can really help take some of the some of the process and break it down a little bit before your clients get to a lawyer is really helpful. And so working with other professionals and having a team of professionals that are working together to create an overall plan for you is a really big benefit.

 

[00:39:02] So it’s a great reason to work with the guys in this room and to make sure that they’ve got the bench strength to help you on the estate planning and other things so great.

 

[00:39:13] Well Megan thanks for joining us today.

 

[00:39:15] I think that was very enlightening and it’s very important for everyone to you know make sure that they all have an estate plan they’re working with a qualified professional there and we’re happy to get anyone Meghan’s information should they desire it.

 

[00:39:28] So just another episode of Gimme Some Truth thank you very much for listening and watching our next episode.

 

[00:39:46] Of your money. Get.

 

[00:39:56] Masses.

 

[00:40:04] Advisory services are offered through Walkner Condon financial advisors LLC a registered investment advisor in the states of Wisconsin and Texas. Clint Walkner and Nate Condon are investment advisor representatives of Walkner Condon. Kevin Castro’s an office manager and marketing communications specialist for Walker and financial advisors. He’s not registered and is because patients podcast is limited to unregister activities and will not be providing any advice or investment related. Nor should any comments he makes be construed as giving investment advice. Insurance products and services are offered through WC Insurance Services LLC Walker kind of financial advisors LLC and WC Insurance Services LLC are affiliated companies content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. What kind of financial advisors LLC is not engaged in the practice of law. Whenever you invest you are at risk of loss of principle as the market does fluctuate. Past performance is not indicative of future results. Purchases are subject to suitability. This requires a review of an investor’s objective risk tolerance and time horizons. Investing always involves risk and possible loss of capital. Long term care estate planning insurance products and tax advice are not offered through Walkner Condon financial advisors LLC Walkner Condon works on a best efforts basis and does not promise or guarantee any results. Past performance does not represent future results. Please see Walk Dotcom for additional disclosures

 

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