00:00 John: Welcome back on Facebook Live. 00:03 Advertiser Our first general advice
it does not create an attorney-client relationship. Every person's legal situation is unique.
You should contact your attorney before taking any legal action related to the subjects discussed
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00:24 John: Hope you enjoy the show. If you have any… if you do like it, make sure you
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we're live, we'll try to respond. 00:41 Advertiser -of growing older, so call
in and ask your questions. The number is 903-793-1071. Now here are your hosts, John Ross and Lisa
Shoalmire. 00:51 John: Welcome to Aging Insight everybody.
This is your host… there's plenty of myself Lisa.
00:56 Lisa: Oh, sorry. 00:57 John: Are we on? Let's see, are we on?
I can't tell. Well anyway, yeah we're on. Okay Lisa, we're on. Everybody else, you're
listening to John and Lisa on Aging Insight. We are here as we are most Saturdays.
01:15 Lisa: Most Saturdays that's right. Sometimes I say every. That's not exactly it.
01:19 John: Yeah technically, we're not here every Saturday but we are here most Saturdays
live in the studio where we can address your concerns about the aging process, about what
you need to do to plan ahead if you want to avoid nursing home care and you want to avoid
becoming a burden on your friends and family and you want to protect and preserve those
resources. That's why we show up here. It's to talk to you all about this sort of stuff.
Because we do it live, you can call in. Phone number's 903-793-1071 and that's 903-793-1071.
You can call in, ask your questions or you can go to the Ross and Shoalmire Facebook
page where you can check us out on Facebook Live.
02:05 Lisa: Right. On that Facebook Live, you can of course watch the show, you can
watch radio being made but you can also ask a question, type it in. Maybe, if you don't
think you have a voice for radio and you don't want to call in, well then you can type your
question there on the comments under the show and we will see those here in the studio and
we'll be glad to answer those questions as well.
02:29 John: Absolutely. Of course we are able to do this because of our sponsors.
02:33 Lisa: That's right. You know, while we bring it to you all our listeners, our
viewers for free, it's not free. We have some sponsors who help us out to make sure that
we can have the airtime and have the studio equipment and such to bring it to you. I wanted
to give a special thanks to Edgewood Manor, the Barnette Agency, Dukes Memorial Hospice,
Riverview Behavioral Health in Calhoun Creek Estates, Kirk Green and Company and St. Michael's
Hospital, the Retreat at Kinwood, Red River Federal Credit Union, Twin City Rehab and
Inspirations Health and Rehab. Those folks, they support us financially to make sure we
can be here every Saturday and we appreciate them.
03:21 John: That's right, we appreciate them. In fact, I think many of them send folks over
to us during the week and we send many folks back over to them during the week. That's
the thing about it. It's, we're dealing with our clients on a day to day basis. There's
this constant blending of legal issues, health issues and financial issues and [03:47 inaudible]
and constantly overlapping one another, if you're not paying attention to all of them
[03:56 inaudible]. 03:57 Lisa: It's like the [03:58 inaudible]
oranges okay? People [04:01 inaudible] one of those oranges up in the air but then we've
got committee, partners that help put it together. 04:17 John: Yeah that's right. Well you know
[04:21 inaudible] and I don't know, I've spoken maybe two or three times this week. I have
a hard time even remembering at this point. 04:31 Lisa: Yeah I think it was at three times.
Let's see, we hit Paris Texas and Tyler Texas. 04:35 John: Twice?
04:36 Lisa: Tyler twice, that's right. 04:39 John: You and Tyler Ransme and Tyler
Once. 04:40 Lisa: Hope Arkansas, hope some of our
listeners north at 30 are listening, Longview also, a lot of places. There's just such a
hunger for the information and I think people realize too that there's so much misinformation
out there. I'll stand up and talk to you and I know what I'm saying to you is accurate
and factual and that's what I want to get out there.
05:11 John: That's right. We want people to have good information out there because we
so often see people mess this stuff up. Usually, it's not their fault necessarily. It's because
they've acted on bad advice or they have had inaction because they were under the assumption
that everything was fine. That's probably the worst situation. It's where for example,
somebody went to their little small town corner next to the court house attorney's office,
went in and said; 'hey we want to do some estate planning.'
05:56 Lisa: Their friend who they see at church and at the community barbecues and everything
said, "Great. We'll do your will." 06:05 John: Well, let's get you a will. Who
do you want to leave your stuff to? They say, well, we just want to leave everything to
each other and then leave it to the two kids when we both die.
06:15 Lisa: That's just a little… that's just one little segment of the issue and it's
not covering everything. John, I thought today, we have some listeners who listen to us every
week and I think maybe we've got some new folks. I thought today we would kind of pull
all the pieces together a little bit. A lot of times we'll go off on the rabbit trails
and really concentrate on something or another but I thought today we might kind of look
at the total package, total picture here. 06:45 John: Yeah and as we get to that, we
do have a question on the Facebook Live page. The person on there says that the one thing
that they missed in doing their estate plan was related to the prescription drug deductibles.
Looking at annual deductibles in the… it looks like $4,000-$5,000 range.
07:14 Lisa: The donut hole. 07:16 John: -and wondering if there was some
recommendations of how to deal with some of that.
07:24 Lisa: You know John, I presume they're kind of talking about the donut hole which
is being the TV kid that always was every time on. When I say that term donut hole,
I always think of the Simpsons and Homer Simpson. I think what they're talking about is that
when you're on Medicare and have a prescription drug plan, there's a certain portion of those
prescriptions and all that Medicare covers and then once you exceed that, you kind of
fall in a hole where you are responsible for covering any of those costs. Then after you
pay so much in that hole, you basically reach the other side and now you've fallen to some
catastrophic care support, cost support and then you're back out of the hole and Medicare
starts helping out again. That's why they call it the donut hole. One of the things
that ObamaCare did was there were some provisions in ObamaCare that is looking to shrink that
donut hole. 08:35 John: Each year, they're supposed to
close that donut hole year after year. Unfortunately, we're probably also looking at the repeal
of the affordable care Act which I actually have mixed emotions on that from a personal
standpoint, perfectly cool with it because it's been jerking at my personal health insurance
for years. But for many of my retiree clients, some of the provisions that would have protected
them from the donut hole and that sort of stuff can be a big deal. The other thing is,
you were talking about on Medicare and that's for many folks… the other place you can
run into this is where your insurance company doesn't or won't cover it.
09:20 Lisa: Right. If you are on a company plan of some sort of you have a separate prescription
drug plan that the drugs that you take in your condition maybe they're no longer on
the formulary. That's the list of drugs that that particular insurance company will pay
for whether that be a generic version or a named brand version but the formulary… the
formulary changes. John, this is what kills me. The formulary changes from year to year.
Even if you pick something… I have a lot of folks as they near retirement, they get
their Medicare plan, they pick their supplement plan, they purchase a Part D prescription
plan and they're happy. Next year in January, they show up at the pharmacy and all of a
sudden the cost to have that drug filled has gone up tremendously.
What's happened is the formulary has changed for that insurance company and that insurance
company may have sent a notice. They may have sent you a post card, they said, "Hey, our
formulary is going to change. Go to this website and you can check it all out." Usually, they're
telling you about the good things that they've done. The formularies do change from year
to year on these insurance programs so it's not a won and done type of deal.
149 John: No and of course the other thing is, if you don't have those, you can look
at other places. For example, if you're particularly of low income, there may be Medicaid programs.
Even if you're not necessarily low income, many prescription drug companies offer programs
to where certain people can either get them directly from the manufacturer at a reduced
cost or just outright free. I've seen many people benefit there. The other place to look
at if you happen to be a veteran is to look at the VA. I've got lots and lots of clients
that get their prescription drugs… in fact, the only benefit they get from the VA is that
they're able to get prescription drugs through the VA and they're able to get … In many
cases, they're getting them at a lower cost. 11:36 Lisa: Sometimes I have folks that maybe
do have some service connected issues from their military service but they've never pursued
anything thinking that it's just outrageous and not going to be worth anything, that they're
generally fine. That's a situation where it can be worth it just to be able to get into
the prescription drug programs with the VA. John, you know, the Area Agency on Aging,
the Triple A, so I'm not talking about the people that come get you off the side of the
road, different Triple A. I'm not talking about the Area Agency on Aging. This is a
government organization that is funded by the Old American Fact. All of our communities
should have access to an Area Agency on Aging. Your community may not have an office located
physically in your community but there should be one close by in your region. The Area Agencies
on Aging, one of their departments that they have is a benefits coordinator. This benefits
coordinator, it may be one person, it may be staff and folks, but if you take your prescription
drug list that you are currently taking and you make an appointment with the benefits
coordinator, they actually have access to some computer programs and things like that
where they can plug in your prescription and then they can… it does it's little computing
and it spits out a list of Part D drug plans that are available in your residential area.
It's not going to spit out New York, Upstate New York, it's going to spit out plans that
are available in your area and that cover your prescriptions. Then you can compare premiums
and pick a plan. That's one thing you need to do frankly every year.
13:37 John: That's right. Of course anybody that's in our local region, one of our sponsors
is the Barnette Agency and these guys are absolute experts when it comes to Medicare
Insurance and stuff. They're who we call with those kinds of questions.
13:52 Lisa: I talked to Jay earlier this week and he was wonderful with some great information
that helped. I was able to look like the hero after talking to Jay.
14:01 John: Yeah get the information from him and then give it to the client like look
how smart we are. Sometimes it's just a matter of knowing where to go. Anyway, that's a good
question. You mentioned that the Older Americans Act is what supports the Area Agency on Aging.
The Older Americans Act is one of the things that is on the chopping block. I know I did…
when Lisa wasn't here one day, I did what we are expecting to get chopped and the Older
Americans Act is certainly one that we do anticipate getting chopped. If it gets chopped,
that will essentially be the end of the Area Agency on Aging as well as the Meals on Wheels
Program. Anyway, I think we need to take a break and then we can jump into our kind of
topic of today of if you're going to do an estate plan, do it right or just don't do
it. Don't bother. If you're going to do it right, what does doing it right mean? Essentially,
there are three things that your estate plan should address. We're going to talk about
those three things for today's show s stick around. We'll be right back. I've got something
in my chest, it's killing me. 15:24 Lisa: I keep drinking my coffee. It's
new but hey. 15:27 John: That's right. Thank you all for
continuing to watch while we have our little commercial break from our live radio. Like
I said, we're going to be talking today about some of the stuff that we think you should
keep in mind. We have a lot of people that come into the office and they say, "Oh well,
really, I think we've got all that stuff taken care of." Then when we start asking them questions,
they're like, "Well, no we don't, no, no. No I don't have that, no, no," just one thing
after another. That's kind of what we thought, what the heck, we'll just point it out. Of
course again, if you enjoy it, feel free to give us a like. If you're watching, if you
like it, give us a like. Hit the little heart button, if you have any questions, feel free
to comment on there, share with your friends if you think other people might get a little
something out of the program. We've got about a minute and a half before we've got to get
back live on the actual radio. You all never go away but we get a little break here with
these people. 16:38 Lisa: I was speaking in Paris to a group
of retired teachers on Monday and our radio program doesn't reach out there but I told
them about our Facebook Live so I'm guessing that some of our folks who may be not in our
listening area will be able to login on Facebook. I think it's really great, technology.
17:00 John: Yes the modern world. Looks like we've got about 20 more seconds and then we've
got to go back live on our radio. Thank you all for sticking around. I'll turn the volume
up so you all can hear our handy dandy music when we come back on live.
17:25 Advertiser A question? Phone 903-793-1071, now back to Aging Insight with John and Lisa.
17:34 Lisa: All right everyone, welcome back to Aging Insight. I'm Lisa Shoalmire and I'm
here live in the studio with John Ross. You can call in, ask a question at 903-793-1071.
You can watch us on Facebook live and type in your question on Facebook. John, I thought
today we'd kind of talk about the pieces, the parts of an estate plan and I think it's
more than planning. I was going to call it, I don't know, it's a plan.
18:06 John: Yeah it's just a plan, there's three things. If you're here today and you're
alive- 18:16 Lisa: That I figure covers everybody.
18:18 John: Then as you're looking forward, as you're heading down the road, there's essentially
your plan here whatever you want to call it. Your plan should generally address three things.
That's what kind of we're going to talk about today. It's no surprise here, these three
things that your plan should accomplish; the first one is it should address what's going
to happen when you become incapacitated. 18:48 Lisa: John, I noticed the way you phrased
that. You said what happens when you become incapacitated. Everyone and we can get into
the details later but everyone should plan for the potential of becoming incapacitated.
19:06 John: Sure. You just go ahead and assume yes I'm going to be incapacitated. Just assume
that because frankly, it's one of those things where unless you die very suddenly, if you
age along with everybody else up into the average life expectancy's range, then your
statistical likelihood of being incapacitated for at least a portion of time before your
death is virtually guaranteed. If you live a natural life expectancy, you will be incapacitated
before you die at some point. Maybe not for long, maybe a couple of days, maybe a week,
maybe five years. 19:52 Lisa: Everyone should plan for that.
If that's not a situation that happens to you, well there's no harm in planning for
that potential incapacity. 201 John: Of course you always plan for what
you don't want to happen. You never plan for what you want to happen. If what you want
to happen happens, you needed no plan. Seriously, I mean there's really just… if what you
want is I want to live healthy and happy and one day die in my sleep and I'm going to leave
behind wonderful loving people, they get along with each other and everybody is financially
stable and debt free and living and a pot of gold at the end of the rainbow, you needed
nothing in the way of a plan to effectuate that if you're the lucky person that that
happens to. 246 Lisa: I haven't met too many of those
so this one piece of your plan should always be to plan for your potential incapacity.
Then the second piece of the plan is we need to plan, this is more of what people think
about, plan for the disposition of your stuff, of your assets, of dealing with debts, all
of that. Make a plan for that stuff. 21:12 John: What we're talking about is the
transition at death. We're talking about the transition of assets, of income, of responsibilities,
of debts, of all kinds of things. We're talking about what happens to these sort of things
at death. Essentially again, your goal should be that that process is the smoothest, easiest,
most economical and most protected way that you could transfer assets at death.
21:49 Lisa: A lot of times we'll get into as far as transferring assets at death, we'll
get into transfers through a probate process with the will and a court system and then
we'll talk about transfers through a non-probate transfer such as bank accounts or life insurance
beneficiaries, things like that. Those are, that's the transition right there. The John
there's a- 22:14 John: Then we get into the third. The
third phase of all of this is the people that you're leaving behind. It doesn't even have
to be people. It could be entities like charities but for most people we're talking about your
kids or if you don't have any kids it's your aunt and uncle or your brother and sister,
whoever it is that you're ultimately going to benefit from or who's going to benefit
from you. Again, we're not thinking about what we want for them. We're thinking about
how bad their situation could be at some indeterminate time in the future.
22:53 Lisa: Yeah just the complexities of your beneficiaries.
22:57 John: That's right. Typically, you're talking about in this case, we're talking
about what I call the four Ds; Death, Divorce, Disability ad Debts.
23:06 Lisa: Those are all of your beneficiaries. So there's a way to plan to address those
things. 23:13 John: That's right and so we're going
to kind of break each of the three sections down as we come back from our bottom of the
hour news break and we'll go into if you're planning for incapacity, here's what you've
got to have in place. If you're transitioning assets at death, here's the way you need to
do it and if you're looking out for those ultimate beneficiaries in step number three,
here's how you need to be planning to protect them. We're going to talk about all of those
things. 23:42 Lisa: I think you're going to get a
lot out of it. It's going to really bring it all together. Stick around after this break,
it's going to be a good overview. 23:52 John: That's right. In the meantime,
if you're not on Facebook Live, you can whip out your phone during the news break, not
if you're driving. If you're driving, pull over but anyway, we'll see you in a second.
All right, so we're at least not live on the radio but we're still live on Facebook Live.
24:20 Lisa: I think this is a good show. People get so overwhelmed and so this is a good show
to kind of bring it together. 24:27 John: To be perfectly honest, this is
also basically how I spend many of my client appointments. It's learning about them, what
are their incomes, what are their assets, what is their personal situation and then
looking at those personal facts of them, how do their personal facts fit in in each of
these three phases. That's essentially where… that's how you develop. That's how from this
side of the table, that's how we try to develop these plans. It's looking at your personal
situation but looking at it in the context of these three elements. How are we going
to plan based on you, how are we going to plan for incapacity, how are we going to transition
your assets at death and how are we going to protect the people that you leave behind?
25:24 Lisa: It's such a lawyer answer John with… everybody's situation is different.
I even know that's part of our tagline on the radio but it's just true, everybody's
situation is different and so you've got to individualize and customize.
25:45 John: Every speech that I've given and just every one of them period but just having
given quite a few in the last couple of days, there's always somebody in the audience that
will say, well okay, all right John, how is it charged to get everything done? Of course,
even though they've heard me say, I've spent a whole hour talking to them about the complexities
of all of this, somehow they still have it in their mind that there's this, this one
solution. That there's this magic bean that is going to be appropriate for everybody and
so they want to know how much does the magic bean cost. If you've got somebody out there,
if you're talking to somebody and they're trying to sell you the magic bean, this is
the perfect thing for everybody and aren't you lucky that you're getting to hear about
it, run away from that person. There may be something that is appropriate for more than
one person, sure there's lots of those but it should be very individualized. I always,
I hate to do it but I have to answer that question the same every time which is; I have
no idea because I don't know how complicated or not complicated that person's situation
is. 27:08 Lisa: That's hard. I think people think
that you're just kind of trying to keep your options open on your fees and charges for
planning but it really is… there are so many different tools in the tool box and we
try to pull out the right tool for the job. They all have their own …
27:29 John: We've got everybody from Hope Arkansas to Lemit Texas checking out the show.
That's a lot of real estate work covered Lisa, from the Panhandle to the birthplace of Bill
Clinton. 27:51 Lisa: Where we were just at yesterday.
27:54 John: Yes where we were just at yesterday giving a speech and where I'll probably be
at if my daughter decides she wants to go look at Texas Tech. They do have a fine law
school there. 28:12 Lisa: I hear it's second best in the
country. 28:14 John: Lisa may have a slightly different
opinion on law schools. All right, we've got to go back live on the radio here in ten seconds.
28:24 Advertiser Dial now to contact a Dell small business advisor today. That's 877 buy
Dell. Have a question? Phone 93-793-1071, now back to Aging Insight with John and Lisa.
28:40 John: Welcome back everybody this is your host John Ross here live here live in
the studio with Lisa Shoalmire. Today, we're talking about the three things, three things
that every single estate plan should address out there. Essentially what we're talking
about is we've got the phase one which is planning for the incapacity, phase two the
transition at death and phase three the people that you're leaving behind. Let's focus on
stage one for a second. 29:14 Lisa: John, I will have to say that
I think the stage one focus of planning for your incapacity. Most people just want to
skip over that. 29:23 John: That's true, they really do.
29:22 Lisa: They just want to go to who gets their stuff when they're gone and how that's
going to work. I almost think it's like an ostrich head in the sand kind of thing that
we don't want to consider the fact that we may be incapacitated and actually considering
it. You know how we all have this idea [29:38 inaudible]. Every time I go down this road
with a client, they always have a story. They always tell me about taking care of a parent,
a grandparent, an in law that faces this very thing. They often tell me how difficult and
just how frustrating that that whole process was in caring for that incapacitated family
member. That's when I kind of turned the white spotlight right on them. I said, "You know
what, that's not the situation you want to leave for your spouse or your children so
let's jump in." 337 John: That's right. Although we do say
that everybody's situation is different, there are some things that are going to be universal
whether you're in Hope Arkansas or Levitt Texas or De Queen Arkansas or any of the folks
that are watching. The one thing I can tell you is you're going to need a financial power
of attorney, you're going to need a medical power of attorney, you're going to need a
HIPPA release and you're going to need a living will.
31:06 Lisa: All of those documents, I call those documents John, the living and breathing
documents. I don't mean it like a constitution. I mean it that these are the documents that
you need while you are living and breathing. They have nothing to do whatsoever with the
transition of your property at death. A lot of times I have to remind folks, if you're
incapacitated, bills still have to be paid, decisions still have to be made and you need
some method to make that happen if you can't do it for yourself. Luckily, the law has already
come up with some tools that make that happen. John, there is a big difference between a
screwdriver that you buy on … You know how those grocery stores have little tool isles
sometimes, you can go buy a little screwdriver on the grocery store isle or you can go get
that snap on tool. We need to make them sponsors for that but you can go get that high end
quality tool that you're going to have for the rest of your life that's never going to
break. It's a big difference in quality of those tools but the tools are very common;
powers of attorney, healthcare powers of attorney, a HIPPA release for medical information and
a living will. 32:29 John: Absolutely but there's actually
a bigger issue with that incapacity for most people and that's going to be if you become
incapacitated, what happens is you have the medical crisis that creates the incapacity.
The medical crisis creates a housing crisis of where are you going to live, how do you
stay home if that's where you want to, do you need to go to assisted living or nursing
homecare? Which the next thing you find out is that all of those are very expensive, so
your health crisis becomes a housing crisis which becomes a financial crisis. It's that
financial crisis that's probably the bigger issue in planning for incapacity. I know we
recently had somebody who they had a pretty good sized estate and they had a couple of
kids. One of the kids maybe he didn't quite like as much as the others and so they left
them a small bequest. Let's say they gave them say $10,000 but at the time they made
the will, they had quite a bit in assets. 33:38 Lisa: The $10,000 was kind of just a
drop in the bucket. 33:43 John: Yeah that was the sticking your
tongue out and- 33:44 Lisa: Kind of making a point?
33:45 John: Yeah flipping your nose at him and saying, hi, you're just getting $10,000
but because of a long long-term care situation, the cost of that care essentially drained
the estate down to just over $10,000 by the time the person died. Ironically at that point,
she had given the vast majority of her estate to the one person that she really was trying
to thumb her nose at. 34:19 Lisa: That $10,000 bequest essentially
sucked up the entire estate and the kids that were left who split the rest, they thought
they were going to be splitting six and seven figures and they ended up with next to nothing.
34:30 John: The perfect example of somebody who may be ten or 15 or 20 years before their
death went in to do some planning and just completely skipped over the incapacity part.
Just skipped over it and just said here's what I want to happen at death on the assumption
that the $200,000 in assets that she had at the time she made the document was going to
be the same 200,000. Had she planned for that long-term care, had she for example set up
asset protection trust to shield those assets or if she was a married couple had built in
contingent special needs trusts into their estate planning to protect the surviving spouse,
any number of different ways that they could have shielded a portion of the assets so that
they did not have to get burned up in that long term care. Again that's not appropriate
for everybody. Some people have more income that's not a big deal.
35:34 Lisa: Yeah they won't be going through assets [35:35 crosstalk].
35:36 John: Some people can afford long-term care insurance or who have access to very
affordable long term care insurance through an employer or something like that. That changes
the dynamics. But for everybody else, you're going to have to figure out how you're going
to pay for those costs because if you burn up all your assets paying long-term care,
then it doesn't matter what you've put in place at death.
36:00 Lisa: That's right, the transition won't matter, so planning for incapacity now in
the financial portion of it but making sure that you've assembled your team through powers
of attorney and things like that. I tell folks that when those things occur, those are the
documents and the planning that you care the most about is your planning for incapacity.
36:23 John: We're going to have to take a break here in a second but I wanted to go
ahead and get started on phase number two. Essentially what I want you to understand
is, here's what a will does. A will, if you're planning with a will, you're saying that you
want two things to happen. One, you want a court to control the disposition of your assets
at death. You want it to be supervised y a judicial process. That's the first thing you're
saying. The second thing you're saying is, before any of my heirs get any of my estate,
I want anybody I owed money to to be able to clean house first even if the people I
owe money to; say the plaintiff in a lawsuit from a car wreck that you died in. For example
if you were at a nursing home and on Medicaid then the state wanting to get paid back. If
you're planning with a will and planning for your assets to go through the process, essentially
what you're saying is, one, you want your family to have to hire attorneys and go through
a process after your death and two you want all of your assets to be available to pay-off
potential creditors at your death. 37:56 Lisa: As we talk about the transition
of your assets at your death, during the break, ask yourself, are those the two things you
want? 38:03 John: Is that what you were planning
when you were thinking about making a will? We've got to take one more break. We'll be
back in just a second. People have no idea what a will actually does or doesn't do unless
you're in the business of dealing with these silly things. Again, I'm not saying that having
a will is a bad thing but a will is the perfect example of something that you want to have
but you don't ever plan on needing. When we come back, we'll talk about some alternatives
to the will and things like that. 38:45 Lisa: I met with a lady this week and
she was on top of it. She had already decided that she did not want her children to have
to deal with her incapacity but she wanted stay at home. What she said is, she already
talked to a trust officer with the bank and talked to them about when she reached some
incapacity then they would take over paying her bills. She was letting them know that
she wanted to be cared for in her home and she wanted all the money to be used to make
that happen but she didn't want her children to have to carry the burden of doing that.
That's one of the few people I've met that has already jumped out there before they even
saw me about dealing with incapacity. 39:29 John: Yeah been thinking it through
a little bit. It is pretty unusual. I will say it's not often … I mean, people do think
about it, a lot of times they're just thinking incorrectly. These are folks who come in and
say, oh I've been thinking about it and I want to give everything to my kids now. No,
no, we don't do that. 39:52 Advertiser Have a question? Phone 903-793-1071,
now back to Aging Insight with John and Lisa. 40:01 Lisa: Welcome back everyone, this is
Lisa Shoalmire, I'm here in the studio with John Ross and you are listening to Aging Insight.
You may be watching Aging Insight on Facebook Live but we're glad you're here regardless
and this is our final segment today. If you've got a burning question; this is the time to
call it in at 909-793-1071 or type it in on our Facebook Live. Today we've been talking
about the three things to consider as part of your estate plan. The first thing we went
over is planning for your incapacity. Just face it head on, make the plan and then we
move on to phase two of our plan and that is dealing with transfers of assets at death.
Before the break John, you were talking about using a will to transfer those assets. Essentially,
that is what we would call a probate transfer. 41:06 John: It is not an efficient way to
transfer the estate. It's just not. It takes time, it takes effort, it takes money and
frankly it's easy to avoid. 41:19 Lisa: I don't like probate [41:20 inaudible]
let me handle the future. 41:23 John: Because it's subject to a set
of court rules and laws, then you actually have no idea what those court rules or laws
will be at the time of your death. We run into this just in the … I think what are
we operating in about 40, 50, 60 different counties between Texas and Arkanasas?
41:47 Lisa: Yeah. 41:47 John: We cover a gigantic area with
our firm and so we deal with a lot of different judges. The exact same type of case can be
an easy process in one county and a monumental pain in another strictly because of the way
that that particular court administers the rules and regulations related to this process.
42:13 Lisa: What's so funny is that it's the same rule book.
42:15 John: It's the same rules. That's exactly right. We're not talking about the difference
between Texas and Arkansas, we're talking about the differences between Texas County
X and Texas County Y. Same laws, same rules, same place just two different interpretations
of the same zip. 42:37 Lisa: Would you really want to make
a plan if you could make a plan that was subject to Willy Nilly rules and interpretations of
those rules? 42:48 John: By an elected official.
42:47 Lisa: By yes elected officials or you can make a plan that would be above all those
rules and possibilities and process. What would you do?
42:58 John: Outside of that, private. There's just really no question about it. You don't
want to… again, of course we add in the death factor. If you talk about losing everything
to the state because of a Medicaid claim or something, then it's even a bigger deal. You
definitely need to be planning for transition at death that avoids the necessity of probate.
There's lots of- 43:25 Lisa: Here we go back to the tool box
again. 43:27 John: Here in the tool box, you've got
lots of little one offs. What I mean by one offs is there are ways you can go asset by
asset by asset. For example, I can go to my bank and name a pay on death beneficiary.
That's good for that one account. Then I can call my IRA people and I can name a beneficiary
on my IRA and that's a one off. Then I could even do a deed on my house-
43:59 Lisa: That's a beneficiary deed or a transfer on death deed.
44:02 John: Or a Lady Bird deed, and this is a one off, it's for the house. The problem
is if you're doing them individually like that, trying to wrap all of those up and make
sure that for example, how many different banks have we had in Texas just in the-
44:22 Lisa: I think there's one building that's been five different banks.
44:26 John: Many of those banks have changed. 44:29 Lisa: There was one bank I remember
John that they were, they kept their paperwork in New Orleans.
44:34 John: Yeah in- 44:36 Lisa: Remember in a paper kind of [44:37
crosstalk]. 44:38 John: There was a certain flood and
yeah we've had situations where somebody went and named a pay on death or they swear they
did but the bank has no record of it because the current iteration of the bank didn't transfer
the records from the previous bank that they bought from and all of that. You can run into
problems on that kind of case by case or one off type thing.
45:10 Lisa: Asset by asset, non-probate designations. 45:14 John: It can work. Again, if you have
a relatively modest estate, if I've got a checking account and a house, it may be very
simple to go and name a pay on death beneficiary on that checking account and do a lady bird
deed on my house. Bam, done. 45:29 Lisa: Right and that's all you need
out of the tool box. It's the most efficient, economical way for your situation.
45:36 John: On the other hand, if I've got two or three different bank accounts plus
IRAs, maybe some other land, plus a house, maybe there's a mortgage on my house, maybe
I've got some life insurance, any number of things, maybe I need a tool that'll wrap all
of these together into one umbrella. Usually for something like that, now you're talking
about using a trust of some sort, a revocable trust, irrevocable trust, asset protection,
there's different types of trusts out there but you'll find that all types of trusts are
non-probate transfers. Depending on your complexity, your long-term care needs on the frontend,
that's going to dictate the type of non-probate transfer tool you're going to use. Something
very simple like just naming beneficiaries, something quite complex like an asset protection
trust and something in the middle like just revocable living trust. There's lots of different
ways to accomplish this based on your situation. 46:39 Lisa: That focus is okay how are you
going to transfer assets at death? We kind of talked about two of the three things to
look at when we're doing an estate plan. We've talked about planning for incapacity, we've
talked about planning for the transition of your assets upon your death and the final
piece that we want to look at is how are you going to protect your beneficiaries following
your death as they receive those assets? 47:07 John: Essentially people want to…
they want to hope that at their death, they leave behind; living, healthy, well married,
financially stable, debt free adult children. 47:23 Lisa: What a blessing that would be
if we all could manage to make that happen. 47:26 John: I would say that is the exception.
47:29 Lisa: Very much the exception. John, typically at a minimum, at a minimum, this
week I can't tell you how many clients told me, well I have great kids but my daughter-in-law,
she rushes. I just feel like she would be calling the shots and my son would be doing
whatever she said and I'm worried that that wouldn't work out too well. At minimum I see
that. 47:56 John: The point here is, you want to
plan for what we call the four Ds. When you're talking about your kids or ultimately your
beneficiaries, whether they're your kids or not, it doesn't matter but with your beneficiaries,
we want to think about the four D's. The first of those is death. Just assume that somebody
you're going to leave behind assets to is going to die first. If they do, where is their
share going? You say, oh well that's fine. If my son dies, I want it to go to his two
kids. Well, yeah, you're talking about the ten year old and the eight year old? Is that
who you're talking about? If you're leaving assets to a ten year old
and an eight year old, you haven't left assets to a ten year old and an eight year old. You
left assets to your deceased son's baby momma's new husband's three kids. That's who you left
your stuff to. You need to planning be planning okay, if my son dies, I want it to go to his
kids if that's who you want, but here's who's going to be in charge of their share if they're
under the age of 18, 21, 25, 30, never. You've got to make some decisions there. So that's
death. 49:11 Lisa: Then there's always the potential
for divorce and that's a pretty common thing especially when it comes to adult children.
What you don't want to end up is having your assets transferred to your child and then
a year or two later, those assets end up getting caught in the crossfire of your child's divorce
and be subject to division by a divorce court. 49:39 John: Do not just think that well, oh
I heard that inherited property is separate property so they don't have to worry about
that. It isn't that simple. 49:45 Lisa: No. There's lots of little things
there so don't- 49:49 John: Ask any good divorce attorney
and- 49:51 Lisa: They can get to them.
49:53 John: Yeah there's a way. You want to protect for that. Say along that same line,
is the debts. Lisa and I will get calls almost weekly from attorney general's office because
there's a beneficiary of an estate that owes child support. They want the inheritance.
511 Lisa: Or we'll have a client come in and say well, you know, I love my daughter but
she's not great with money and I know she's got IRS problems or I know she's got credit
card problems, she's got- 519 John: Unpaid student loans.
522 Lisa: That's a big one. 523 John: Yeah bankruptcies, lawsuits, there's
all kinds of third party creditors that might be trying to attack your beneficiaries whether
it's at the time of your death or some time later and so you need to shield from that.
You've got your death, you've got your divorce, you've got your debts and then your fourth
D in all of this is disability. We think of nursing homes as being old people things.
They're not. Walk into any nursing home and there are… the overall age is going to skew
pretty high but there's going to be a few young people in there.
559 Lisa: There are a few young people there aged 61, 64 and their parent is healthier,
their 85 year old mom is healthier than the 61 year old that is now needing nursing care.
There's always potential for your own child to be disabled to the point where they do
need the supports of public benefits programs. What you don't want is your assets to pass
on to them and basically the public benefits program vacuums, sucks up all those assets
and kicks your child off those public benefit programs until your assets are expended and
they're no good to your child. 51:39 John: The thing is that it's actually
relatively easy to leave behind assets in a way. We'll leave assets, say, I'm going
to leave assets to the four kids but we're going to do it in a way that it's not divisible
under force, that it can't be attacked by a third party creditor, that it doesn't count
towards their eligibility for any need based government benefit. If that child dies, then
here's who it goes to, in what shares and here's who's in charge of it if they're under
the age of whatever. I would say at least 25, maybe 30.
52:17 Lisa: You John, I had an outcall this week. I went to a nursing home, 90 something
year old lady. Her daughter had passed away and left her, her $75,000 life insurance policy.
We've got to deal with it or else it's going to kick off her grandma off her Medicaid and
it's not going to be for the benefit of the family as intended.
52:40 John: We actually run into this all the time. We just run into it all the time.
All that decided, let's wrap it all up. You're going to plan for your own incapacity with
powers of attorney and figuring out how you're going to pay for your care, you're going to
transition you assets at death in a non-probate way that is smooth, easy and protects the
assets from creditors and you're going to protect your beneficiaries from those four
Ds, the death, the divorce, the disability and the debts.
53:12 Lisa: Let's give a shout out real quick to our sponsors; Edgewood Manor, the Barnette
Agency, Dukes Memorial Hospice, Riverview Behavioral Health, Carlow Creek, Kirk Green
and Company and St. Michael's Hospital, Red River Federal Credit Union, Twin City
Rehab and Inspirations. 53:28 John: All right, we'll see everybody
next week. 53:30 Advertiser With John Ross and Lisa Shoalmire,
tune in next Saturday at noon- 53:35 John: We'll see you all next week too.
Thanks for watching. 53:37 Lisa: Bye.
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