Bogleheads® Chapter Series – Estate Planning Basics

00:00:00.000 | Welcome to the BogleHedge Chapter Series.

00:00:05.980 | This episode was jointly hosted by the Starting Out in the Pre and Early Retirement Life Stage

00:00:10.460 | Chapters and recorded September 13th, 2023.

00:00:15.080 | The presentation and discussion topic was Estate Planning with Attorney Summerfield

00:00:19.740 | Baldwin.

00:00:20.740 | BogleHedge are investors who follow John Bogle's philosophy for attaining financial independence.

00:00:26.220 | This recording is for informational purposes only and should not be construed as personalized

00:00:30.280 | investment advice.

00:00:34.480 | Featured guest tonight, Summerfield Baldwin.

00:00:37.260 | Miriam did a basic intro.

00:00:39.100 | I'll elaborate on that a little just so folks know a bit more about Summerfield's background.

00:00:45.740 | Summerfield grew up in Brooklyn, New York.

00:00:47.220 | He has a BA from Johns Hopkins and his law degree from Brooklyn Law.

00:00:54.340 | He's licensed in New York, so his comments will largely be based on his knowledge of

00:00:59.220 | his practice in New York.

00:01:01.440 | He started that practice in 1993 specializing in estates and guardianships.

00:01:08.480 | In his practice, he's served as a trustee of various trusts and as a guardian, guardian

00:01:13.940 | ad litem, which we may or may not get into.

00:01:16.860 | He served as a court evaluator and attorney for alleged incapacitated persons in a variety

00:01:24.580 | of Supreme and surrogate court cases.

00:01:28.380 | Summerfield and his wife and his cat live in New York, just north of New York City,

00:01:32.620 | but will be moving back to Brooklyn to be closer with family.

00:01:36.500 | And in full disclosure, I have retained Summerfield for his services, and I also consider Summerfield

00:01:42.620 | a personal friend.

00:01:45.000 | So with that, we'll begin what will largely, hopefully, be conversational.

00:01:50.440 | We have many questions to ask Summerfield.

00:01:53.120 | As Miriam mentioned, we'll have two sessions with Summerfield.

00:01:56.220 | This first will largely be the building blocks for legal understanding, and the second session,

00:02:01.900 | which will be scheduled within, it'll be a few months from now, likely, will be more

00:02:08.280 | of the people side of things like elder care and implementing care and guardianship and

00:02:13.980 | custody and moving residents and the complicated people side of things.

00:02:18.740 | So we understand how sprawling this topic is and how relatable and how inevitable and

00:02:25.260 | how there's general interest, whether you're experiencing it or not right now.

00:02:29.060 | But when I say inevitable, almost everyone is encountering these issues.

00:02:33.100 | So with that, there's a near infinite amount of questions.

00:02:37.380 | So we have a lot to cover, limited time.

00:02:41.140 | We want to turn it over to the questions from the chat.

00:02:44.980 | So I will sometimes, unfortunately, cut off Summerfield.

00:02:48.380 | We want to keep things concise.

00:02:50.420 | We're going to want to move on to different categories of questions.

00:02:54.700 | So if folks can, again, submit questions in the chat, and, you know, we hope everyone

00:03:01.540 | gets a lot out of this.

00:03:03.220 | Summerfield, did you have anything you wanted to add before we start?

00:03:06.940 | Oh, just, I appreciate your having me on.

00:03:11.500 | I've been an admirer of Vanguard and their philosophy and, of course, John Vogel.

00:03:18.580 | And I appreciated our working together and friendship, Gorrie, so glad to be here.

00:03:23.900 | Excellent.

00:03:24.900 | Well, thanks again for being here.

00:03:27.740 | It is such a topic of interest for such a wide group of people.

00:03:33.180 | And you mentioned Jack Vogel and Vanguard.

00:03:37.940 | And so the Vogel Heads span, this audience is certainly national, and sometimes we have

00:03:43.580 | international folks.

00:03:44.980 | So with that, it's an important point, I'll reiterate, folks will have very state-specific

00:03:50.340 | questions sometimes.

00:03:51.340 | And there are questions relating to internationally held assets or beneficiaries located elsewhere.

00:03:59.260 | We are aware that that's a topic of interest, but we're also going to curtail some of those

00:04:06.020 | so that we can focus on what's most relatable for the broadest audience.

00:04:12.060 | So Summerfield, thank you for that.

00:04:14.180 | And again, for context, as you know, there's a wide range of, not just geographically,

00:04:20.180 | but age and kind of personal interest.

00:04:23.380 | So with that, why don't we get started with the most basic of questions.

00:04:27.700 | Can you walk us through what a will is, what goes on in the absence of a will, and why

00:04:34.580 | it's important to have one?

00:04:36.660 | Sure.

00:04:37.660 | A will is a legal document whereby when you've passed away, the will controls how your property

00:04:49.340 | is going to pass, and it also nominates, and it was called an executor, someone to control

00:04:58.940 | and operate the estate.

00:05:02.060 | And a will needs to be a writing.

00:05:06.700 | Most typically, it's a paper writing.

00:05:09.820 | I've never encountered anything different, although in law school, I know there was a

00:05:13.820 | case in England centuries ago, where some farmer had written his will on the back of

00:05:20.180 | a farm animal, on a cow or something.

00:05:22.980 | And that was actually held up by the English court at that time.

00:05:27.660 | So yeah, writing.

00:05:31.540 | One of the requirements of a will is that it be published by the person making out the

00:05:36.260 | will.

00:05:37.260 | So when I supervise a will signing, I always ask my client two questions.

00:05:42.980 | I say, one, is this your will?

00:05:45.620 | Person says yes.

00:05:46.620 | And then I ask, are you asking the three of us to witness the signing of your will and

00:05:52.580 | do a self-proving affidavit?

00:05:53.900 | They say yes, that's the publication.

00:05:57.980 | And then they sign the document.

00:05:59.420 | The will in New York, as it would be in other states, needs to be witnessed by at least

00:06:07.260 | two adults.

00:06:10.020 | And for my will signings, I generally have the witnesses do what's called a self-proving

00:06:16.540 | affidavit where they basically attest to the fact that the testator was of sound mind,

00:06:23.300 | that they were not being unduly forced into signing their will, that they had understanding,

00:06:29.700 | they could read English, knew the English language, they had no physical defect, vision

00:06:36.820 | or hearing problem that would affect their capacity to make a will.

00:06:41.120 | So Summerfield, sorry, I'll interrupt from time to time just for clarity.

00:06:44.260 | So two things.

00:06:45.260 | One is when you said two witnesses, I assume, but you'll clarify, these have to be disinterested

00:06:51.700 | parties.

00:06:52.700 | It wouldn't be a beneficiary or relative or could it be?

00:06:57.060 | As a practical matter, the answer is yes, although technically it can be an interested

00:07:03.220 | party.

00:07:04.220 | The catch, though, is if a beneficiary is a witness, they have a choice or the estate

00:07:13.740 | has a choice.

00:07:15.100 | They can either withdraw as a witness or they can withdraw as being a beneficiary.

00:07:19.940 | They can't serve in both those roles.

00:07:22.580 | So yes, you would never like I would never want my client to have as his or her witness

00:07:30.540 | someone that he's included in his will as a beneficiary.

00:07:34.680 | That helps.

00:07:35.680 | So I want to follow up on what it means to be published for folks outside of the legal

00:07:39.180 | space.

00:07:40.180 | But before that, I want to close this point.

00:07:42.100 | Can you elaborate on how these witnesses are sourced?

00:07:46.520 | If the average person doesn't know how to find a disinterested person, does the attorney

00:07:52.300 | provide them or how else is it done?

00:07:55.820 | How I do it, most of most of my will signings are done in my office and I on my floor, there's

00:08:04.900 | a receptionist, sort of a receptionist who serves a whole number of offices.

00:08:11.420 | And she is usually my my lead witness.

00:08:14.740 | And then she, in turn, because she's sort of the property manager for the building,

00:08:19.420 | she will usually call in another staff person at the building and the two of them are my

00:08:24.940 | witnesses and I serve as sort of a third witness.

00:08:29.300 | If I do a home visit to a person for their will signing, then I make arrangements beforehand.

00:08:37.880 | I'll say to them, look, are there some neighbors or do you have friends who could come by and

00:08:43.540 | and serve as the as the witnesses and usually that that works out well.

00:08:47.180 | Fantastic.

00:08:48.180 | That was super clear.

00:08:49.460 | So now let's go back to being published.

00:08:51.420 | You said it must be published for folks, again, without the the legal knowledge.

00:08:57.580 | What is what does that mean to the average person?

00:09:00.960 | How how what defines published as it satisfies you?

00:09:04.940 | Yeah, just like a declaration to the to the witnesses that the person intends this document

00:09:13.840 | to be their last will and testament to dispose of their assets at their death and set up

00:09:20.100 | their estate.

00:09:23.540 | And it goes partly into this whole thing of does the person know what they're doing?

00:09:28.820 | You know, one of the big concerns about a will, you know, oftentimes you have older

00:09:32.380 | people doing a will.

00:09:34.420 | And of course, with age can come some form of mental decline.

00:09:40.380 | And and so you want your witnesses to feel confident that, in fact, the person signing

00:09:49.420 | the will before them knows what they're doing, knows what's going on.

00:09:53.940 | And so the publication requirement sort of goes towards establishing that that confidence

00:10:01.340 | in that.

00:10:02.340 | OK, so I wanted to hit on this later, but it's timely, given what you just said.

00:10:08.000 | If someone contests the will and says those witnesses were not qualified to make a determination

00:10:17.100 | that the decedent was of sound mind, how would that be handled?

00:10:22.620 | Let's say someone went in and out, had had some early history of being in and out of

00:10:29.300 | lucidity, wasn't clearly suffering from, you know, full dementia or Alzheimer's.

00:10:36.460 | But in this hypothetical, some beneficiary or potential beneficiary or excluded otherwise

00:10:43.080 | beneficiary could say not of sound mind, those witnesses were not qualified to make

00:10:50.140 | that determination.

00:10:51.140 | Right.

00:10:52.140 | Yes.

00:10:53.140 | Yeah.

00:10:54.140 | That can they can do that.

00:10:56.140 | The thing I mean, the best argument for a will object and regarding the witnesses would

00:11:01.720 | be, in my opinion, would be on the one hand, all the witnesses were under age, you know,

00:11:08.500 | because legally the witness has to be an adult, 18 or older.

00:11:12.140 | So if if you can establish that a witness was 16 or something, then that, you know,

00:11:17.020 | you win your objection that way.

00:11:19.980 | I think a second strong object and argument to a witness would be the witness was was,

00:11:29.100 | you know, not not an independent, true witness.

00:11:36.020 | They were maybe maybe they received some money.

00:11:39.300 | Maybe they were paid by the testator or the attorney or something.

00:11:43.060 | There was there was some kind of fraud going on.

00:11:45.740 | There was this plan to defraud a vulnerable person.

00:11:52.160 | And the witnesses were part of a scheme to do that.

00:11:55.620 | So I mean, I suppose you could argue that a witness is not doesn't have a particular

00:12:01.820 | qualification to determine whether someone has capacity or not.

00:12:06.980 | And I mean, if you could establish that a witness themselves had some kind of disability

00:12:11.100 | that would limit their ability to understand, that might be successful.

00:12:15.180 | But generally, courts are used to witnesses being just sort of regular folks that aren't

00:12:19.820 | expected to have any particular knowledge or, you know, great qualifications.

00:12:24.060 | All right.

00:12:25.060 | That helps.

00:12:26.060 | So it's a low bar to make that determination.

00:12:27.740 | Yes, it sounds like.

00:12:29.260 | OK, so let's say you've described what a will is, what it does, what happens in the absence

00:12:35.820 | of a will.

00:12:37.340 | Someone intended to do will started it, never finished it.

00:12:40.460 | There's a partial will count.

00:12:41.900 | Does it need to be officially complete or let's say there's no will.

00:12:46.500 | Right.

00:12:47.500 | Yes.

00:12:48.500 | In those cases, I mean, in some case, in the ideally, if you haven't done a will, you've

00:12:53.580 | done other things, you've made beneficiary designations on your life insurance, on your

00:12:59.700 | bank accounts, on your pension or annuity that you may have such that.

00:13:08.380 | There's really nothing.

00:13:10.300 | Everything is accounted for.

00:13:11.840 | Everything is provided for.

00:13:13.060 | Nothing will really come into your estate or if things do come into your estate, they're

00:13:17.380 | so small, some kind of refunds or a very small account that it just it doesn't make sense

00:13:23.380 | to hire an attorney to take the time and effort to go and and probate or handle the estate.

00:13:29.620 | So that would be the ideal situation for someone who doesn't do a will.

00:13:35.060 | If if you don't do a will and you don't do the beneficiary designation or a trust or

00:13:41.020 | whatnot and property legally passes to your estate, then what has to happen is a.

00:13:53.220 | Distributee, which is a legal term for someone who's a close family member who, by virtue

00:14:00.700 | of their kinship, would inherit under the state intestacy law, a distributee needs to

00:14:07.460 | come forward and file a petition for letters of administration to be appointed as the it's

00:14:14.460 | not executor.

00:14:15.460 | If there's no will be appointed as the administrator of the estate with the authority to marshal

00:14:21.220 | the assets, pay the estate expenses and then distribute the estate assets to those closest

00:14:29.780 | blood can as determined by the state law.

00:14:33.220 | OK, super helpful.

00:14:35.540 | So building on what you just said, I want to pick up on two things.

00:14:38.820 | One is you mentioned if someone has relatively minimal assets or however subjective that

00:14:46.340 | is, but in what situations is it OK to do a will yourself or hire an attorney versus

00:14:55.100 | use an online tool?

00:14:57.140 | And then you mentioned executor.

00:14:58.300 | Why don't we segue after you address those if you can elaborate on the role of an executor,

00:15:05.820 | how to choose a good one, how to inform them what it means to be an executor.

00:15:12.980 | So they're agreeing to something in an informed way.

00:15:17.620 | Great questions that before I get to those questions, and I may have to nudge you to

00:15:22.500 | remind me of them, but there is one point I should make that could be helpful to people

00:15:27.260 | with it in these small estate situations in New York.

00:15:32.380 | And again, most states, although laws vary, do have similar type arrangements.

00:15:37.420 | But in New York, if you have a very small estate, I think it's up to 20,000, 30,000,

00:15:46.980 | even without a will and without doing a court proceeding at the surrogates court, there

00:15:53.140 | are provisions under the New York law where you can go to your bank or whoever is holding

00:15:57.860 | the small assets and you can fill out an affidavit.

00:16:02.340 | And just by virtue of that affidavit and a particular section of the New York law, the

00:16:07.220 | bank, the financial institutions are required to turn over those small assets, so just something

00:16:14.260 | to bear in mind.

00:16:18.580 | And then the nudge, you were in terms of...

00:16:21.540 | Oh, well, so to finish up, let's say, so people have, they've definitely seen online they

00:16:27.740 | can do their own will versus they get comfort with an attorney versus someone has a friend

00:16:35.660 | who did it themselves and feel fine.

00:16:38.140 | When is it okay and when should someone absolutely hire an attorney?

00:16:42.820 | Right.

00:16:43.820 | I mean, personally, my advice would be to...

00:16:51.020 | My best advice, I think, would be just to go to an attorney.

00:16:53.620 | And you can check with an attorney about their fees ahead of time and all of that.

00:17:00.020 | Now, but that being said, if you feel comfortable, like maybe you have some experience with the

00:17:08.360 | state matters, wills, that sort of thing.

00:17:11.580 | If you want to draft your own will, I think that's just by yourself or with one of these

00:17:17.340 | will kits.

00:17:18.340 | I don't particularly have a problem with that.

00:17:22.800 | You should be careful about, in terms of, you want to make sure you select all the people

00:17:30.400 | that should be selected, executors, backup executors.

00:17:34.560 | If you have children, you want to have guardians, backup guardians.

00:17:38.880 | You want to make sure you cover all the bases, but drafting your own will, I don't particularly

00:17:44.000 | frown upon.

00:17:45.900 | But if you do that, I would recommend that you do have an attorney, at least supervise

00:17:52.120 | the execution of the will signing.

00:17:55.320 | And that, in terms of fees, that should be, I would estimate like a third or a fourth

00:18:03.960 | of what an attorney would charge for the entire process, because most of the attorney time

00:18:10.040 | goes into drafting the will.

00:18:12.680 | If you come with a will to an attorney, and I've had a couple of clients do this, and

00:18:18.480 | I as the attorney, I'm just there to supervise the signing, that's not a big deal, and my

00:18:24.400 | fee is going to be considerably less.

00:18:27.480 | And the reason for that is that, like I mentioned earlier, the New York statute has very specific

00:18:38.400 | laws about what constitutes a valid will signing.

00:18:45.160 | And the self-proving affidavits that the witnesses have to sign, ideally they're done at the

00:18:53.000 | will signing.

00:18:54.540 | They don't have to be, but it's much easier to get the witnesses to do these required

00:19:00.080 | affidavits at the will signing than it is to track them down 20, 30 years later, and

00:19:08.360 | then have them sign affidavits at that point.

00:19:12.600 | So yeah, that, and then a final thing, like if someone's going to object to a will, just

00:19:19.560 | the fact that you've had an attorney supervise the will signing, that gives the surrogate

00:19:24.480 | judges a lot more confidence that it was done properly, as opposed to you went before a

00:19:29.960 | notary at FedEx or something.

00:19:33.200 | So just for the purpose of having the will hold up, I'd have an attorney supervise it,

00:19:37.920 | even if you do draft your own will.

00:19:39.880 | - Okay, that was super clear and helpful.

00:19:42.820 | There's a lot there that I think is worth following up on, so I'm going to focus on

00:19:48.240 | a few things, but we'll move into sort of speed dating round.

00:19:53.880 | I'll ask questions and we'll do like high level, concise answers.

00:19:57.520 | We'll get back to executors.

00:19:58.520 | So you mentioned a few things.

00:20:01.080 | Coming to an attorney with a self-drafted will would be helpful.

00:20:04.560 | How does one, I think we know referrals are a great source for choosing an attorney, but

00:20:09.760 | absent that is the bar association, or how would you recommend someone find a good attorney

00:20:15.080 | outside of casting a wide Google search and then bringing the draft?

00:20:23.440 | So if one is going to self-draft, should they follow an online template?

00:20:28.320 | How do they know that they have good guidance for the draft they're using?

00:20:32.440 | - Right, that's kind of tricky, yeah, because I really don't have experience with working

00:20:39.160 | with the different programs and stuff.

00:20:41.400 | I mean, I had one person come to me, and this was a well-educated person, a friend, and

00:20:47.040 | he had gotten a hold of a program that was really quite complex and involved.

00:20:54.840 | And I suppose it could have been good, but, and he did what sort of what I had recommended

00:21:00.040 | in that he had me look it over and I was going to supervise the signing.

00:21:04.360 | But to me, it was really too involved.

00:21:07.760 | I would favor a simpler program, or even, maybe even more so than a program.

00:21:15.640 | If you have like your grandfather's will or your parents' will that a lawyer drafted,

00:21:21.680 | maybe just take that as your template and just kind of copy it and change it to pertain

00:21:28.960 | to your situation.

00:21:31.760 | And that could even be free.

00:21:33.000 | You wouldn't have to pay for, I would prefer something simpler, because if you go have

00:21:39.360 | too much complexity, you're going to confuse yourself, confuse the court.

00:21:44.080 | So simpler is better that way.

00:21:45.840 | - Excellent.

00:21:46.840 | So ultimately, it should not, it need not be a highly technical document and someone

00:21:51.960 | can intuitively draft it, and that might be a great foundation.

00:21:57.640 | Okay.

00:21:58.640 | If it needs to be complex and all this, then your wisdom, go to an attorney, because if

00:22:08.360 | it's really, you know, you just, you know, so.

00:22:10.720 | - Understood.

00:22:11.720 | Okay.

00:22:12.720 | So quick thoughts on how to find or select an attorney.

00:22:16.720 | - Yeah.

00:22:17.720 | Word of mouth, some, I know some companies have legal plans where for a discount, and,

00:22:27.160 | you know, I think that's worth exploring, you know, I think those guys could very well

00:22:31.440 | be good attorneys.

00:22:33.360 | And then, yeah, bar associations, county bar associations have legal referral services

00:22:38.960 | where they have qualifications and everything for attorneys to register with them and they

00:22:46.000 | keep an eye on them.

00:22:47.000 | So that's a good source as well.

00:22:49.160 | - Great.

00:22:50.160 | So some great resources there.

00:22:52.040 | I definitely want to jump to executor, but to close out the physical will process, does

00:22:57.840 | it need to be registered or filed somewhere?

00:23:01.840 | - No, in New York, it doesn't.

00:23:04.960 | In New York, you can file it with your, the surrogates court in the county in which you

00:23:10.240 | live, but there's a catch to that, which in my opinion, and every client I've spoken with,

00:23:19.720 | it's a deal killer for them, and what the deal is, is that you file it at the local

00:23:24.840 | county surrogates court, you pay like a $35 filing fee.

00:23:29.760 | The catch is though, if you ever want to change your will, you yourself have to physically

00:23:35.380 | go to the court and withdraw that original will.

00:23:38.600 | You can't send your spouse, you can't send a power of attorney.

00:23:42.080 | Even if you're on death's door, it has to be you who goes to the court to pull it out.

00:23:47.480 | So for that reason, it's not my top recommendation, so.

00:23:53.920 | - Okay.

00:23:54.920 | So building on that, who should keep, let's say the will is finalized and there are no

00:23:59.640 | changes being made, who should have a copy of the will?

00:24:03.720 | How many copies should be distributed and how do you know that the latest, how does

00:24:11.100 | the judge or the executor or the post-passing, how do parties know what the latest will is?

00:24:21.920 | - Right.

00:24:22.920 | No, this is a very good question.

00:24:26.160 | Yeah, well, a standard clause in any will is that it revokes any prior wills.

00:24:34.840 | And so then you're, so you see that in virtually every will.

00:24:38.960 | - But if you don't know that there's a later one, any document saying it revokes preceding

00:24:45.080 | ones can seem like the most common.

00:24:47.680 | - Exactly, exactly.

00:24:48.680 | So basically, yeah, I mean, you would have to, right, yeah, I mean, there is a default

00:24:58.600 | paragraph in the standard court petition asking for the probate of the will, where you say

00:25:06.700 | that you've done a thorough search and that this is the latest will kind of thing.

00:25:13.200 | And I guess you just have to, whether it's from the attorney who drafted the will or

00:25:20.240 | kept it or from your search of the decedent's home, you just have to, I guess, yeah, to

00:25:29.680 | the extent you can, be sure that it's the most recent will.

00:25:35.760 | What some people will do is they'll, if they redo a will, they'll make sure they get their

00:25:42.660 | prior originals and just tear them up physically, just so that kind of a situation can't be.

00:25:49.100 | - Okay, that makes sense.

00:25:50.660 | And so in your experience is, how often have you seen a surprise later version surface

00:25:57.740 | after what was thought to be the latest?

00:26:00.380 | - Right, to be honest, I have not actually seen that.

00:26:04.260 | I remember I assisted a gentleman, a colleague who had drafted a will for an older client

00:26:18.700 | and there was a contest and the specific issue you mentioned about not knowing if there was

00:26:28.320 | a more recent will didn't come up, but there were several prior wills and that came into

00:26:36.000 | the part of the objection.

00:26:38.560 | So we dealt with a different number of wills, but specifically, no, I haven't seen what

00:26:43.680 | you described.

00:26:44.680 | - Okay, so that could be comforting for folks just knowing it's a low probability, low frequency

00:26:51.240 | event.

00:26:52.240 | - Yes, and one thing, if I could just jump in, one thing that'll help prevent what you've

00:26:56.600 | described is missing a more recent will.

00:27:01.040 | Whenever you submit a will to be probated in New York, and again, this should apply

00:27:05.720 | to all states, there's a requirement that the closest blood can be notified, be provided

00:27:13.160 | a copy of that will, and they have the opportunity to object to that will.

00:27:19.880 | So the fact that you're alerting spouse, kids, siblings, parents, or whatever, of the will,

00:27:28.720 | they're the kind of people who would know or potentially would know if there's a more

00:27:33.600 | recent will out there.

00:27:35.080 | So if they see something that seems too old, doesn't seem right, then they just go to the

00:27:40.240 | court and say, "There's something wrong here," and so that it could come to light that way.

00:27:45.760 | - Got it.

00:27:46.760 | Thank you.

00:27:47.760 | So let's jump over to executor demystification.

00:27:52.320 | So have you seen someone asked to be an executor, accept the role, but doesn't really have an

00:28:00.280 | understanding of what it entails?

00:28:02.320 | They feel obligated.

00:28:03.760 | How does one empower a potential executor to make an informed decision?

00:28:08.960 | So if you can walk us through what it means to be an executor, what they typically do

00:28:13.720 | deal with, can they decline midstream and find a successor executor?

00:28:21.080 | How does that- - Yeah, I'll answer that one first.

00:28:24.860 | You can decline midstream and sometimes it's unavoidable.

00:28:29.880 | If you have a health issue or you have to move, or sometimes there can be some kind

00:28:36.040 | of problems with the estate where just in order to get the estate resolved, you need

00:28:41.180 | to step aside and let someone else take over because of family issues or something.

00:28:46.880 | So sometimes that's unavoidable.

00:28:48.880 | It's generally better not to sign up to be the executor at the beginning, because if

00:28:59.140 | you feel, if you've been nominated as the executor and you're questioning whether you

00:29:04.400 | want to do it or not, or can do it, if you go ahead and accept, then to get yourself

00:29:11.700 | out of that is a process.

00:29:14.380 | You can't just sign a letter or something and send it to the court and that's it.

00:29:18.980 | You basically have to reapply to the court for permission to withdraw.

00:29:24.480 | And if it's gotten to the stage where you've taken hold of property, if you've administered

00:29:30.760 | money, access money, put it in a state account, then you need to provide an accounting of

00:29:37.200 | how you've handled that money before the court will release you.

00:29:40.940 | So just sort of a warning that way.

00:29:44.560 | But yes.

00:29:45.560 | I mean-

00:29:46.560 | When you say a state account, who sets that up?

00:29:48.960 | The executor is empowered to-

00:29:50.680 | Yes, exactly.

00:29:51.680 | Yeah, because an executor, I mean, another way of looking at the executor role is it's

00:29:57.560 | basically the person who steps in the shoes of the decedent and can and does do what the

00:30:06.040 | decedent would be doing if they were still alive.

00:30:10.760 | So they're gone, so someone needs to be able to act for them for the purposes of carrying

00:30:17.520 | out their last wishes.

00:30:19.520 | And so more specifically to demystify for folks who are zero familiarity, what are typical

00:30:25.780 | things an executor does?

00:30:27.600 | And if you can build on that, what makes for a great executor and what are some unanticipated

00:30:33.640 | pitfalls, some things that executors aren't really foresightful to, things that an executor

00:30:43.540 | may not have foreseen and tripped over.

00:30:47.120 | Right.

00:30:48.120 | I don't know.

00:30:49.120 | To me, I think there's kind of two things that make a great executor.

00:30:55.740 | Probably the most important, I'd say, is just having that connection, that loyalty to the

00:31:00.940 | person that passed away, such that you really want to honor and fulfill their own wishes.

00:31:08.420 | And whether it be to paying their last bills, making sure that the doctor, the home care

00:31:16.260 | worker, the cleaner, people that were important to them in their lives, those people get properly

00:31:23.460 | paid for the services that they did, but that the decedent wasn't able to pay during his

00:31:30.460 | last illness.

00:31:33.660 | Honoring the decedent's wishes to leave gifts to charity, to cherished friends and family

00:31:40.700 | members, having a real devotion to the person means that you're going to, that kind of an

00:31:46.420 | executor is going to go the extra mile to, in a timely and caring way, carry out those

00:31:53.320 | person's last wishes.

00:31:56.700 | So to me, that's the most important aspect.

00:31:59.740 | And then the second aspect I would say is just kind of maybe a general good sort of

00:32:07.540 | organizational business affairs kind of sense, because the executor really is the person

00:32:15.500 | in charge of the estate.

00:32:17.580 | And you don't have to necessarily have specialized knowledge or abilities, like either for investing

00:32:24.340 | or legally or that kind of thing, because as long as the estate is not really small,

00:32:34.340 | it's customary and fine to hire an attorney to help you with the legal aspects, hire an

00:32:40.100 | accountant to help you with tax aspects to the extent they exist, hire an investment

00:32:47.300 | person to make some investment decisions if the estate is going to go on for a little

00:32:52.340 | period.

00:32:53.340 | Okay.

00:32:54.340 | And it's, it sounds worth mentioning the executor can be compensated.

00:32:58.780 | Is it predefined by the decedent early on?

00:33:03.700 | Is it a formula of assets?

00:33:05.660 | Is it a service?

00:33:06.660 | How does that work?

00:33:07.940 | Is it per service?

00:33:10.380 | It's in the, it's in the, the person making the will, it's in their control.

00:33:16.500 | They can specify in their will, I want my executor to be compensated with X amount of

00:33:23.260 | dollars or X percentage of the estate, or sometimes they'll say, I direct my executor

00:33:29.100 | to serve without compensation.

00:33:32.940 | That's it's, it's rare for people doing their wills to make that kind of a specification.

00:33:40.740 | The 99% of the time, the executor simply takes as his or her commission, the percentage that's

00:33:49.980 | set by the state statute.

00:33:53.060 | And to give an example, like in New York state for the first $100,000, and in the state,

00:34:00.060 | the commission is 5%.

00:34:02.660 | For the next $200,000 after that first $100,000, it's 4% of that, then it's 3% of every dollar

00:34:10.780 | from 300,000 up to 700,000.

00:34:14.980 | After 700,000, it's two and a half percent.

00:34:18.660 | And then I think at a higher level, it even goes down to like 2%.

00:34:21.860 | Okay, that's a perfect segue.

00:34:24.300 | That's phenomenally important information.

00:34:26.060 | So thank you, Summerfield.

00:34:28.380 | When let's define the denominator there, as we segue to what is probate.

00:34:33.380 | So I'm conscious of our time, we're already near 840.

00:34:37.620 | And we've covered a fraction of, you know, what we'd like to, when, let's say, a lot

00:34:44.460 | of folks in the Boglehead crowd know that financial institutions often require naming

00:34:50.460 | a beneficiary.

00:34:52.300 | And so that will bypass, even if a will directed otherwise, the financial institution will

00:35:00.220 | follow what's on their records as the beneficiary.

00:35:04.100 | So when you say the first $100,000, and then the next $200,000, et cetera, can you clarify

00:35:10.580 | for folks, does this include financial assets excluded if went to a beneficiary already?

00:35:17.500 | And then with that, we'll segue to probate.

00:35:19.380 | Oh, definitely, definitely.

00:35:21.100 | Yeah.

00:35:22.100 | So, so it would be these percentages only apply to assets that come into the estate.

00:35:28.180 | So so like, yeah, if you have an account at Vanguard, let's say you have two accounts

00:35:34.540 | at Vanguard.

00:35:35.540 | Let's say one account for $500,000, you leave to your, your spouse.

00:35:43.220 | Then when you pass away, leave to your spouse via the financial institutions form, right?

00:35:48.900 | We have the form, yeah, the spouse is the designated beneficiary with Vanguard.

00:35:53.420 | Then yeah, when you pass away, by operation of law at death, that $500,000 goes directly

00:36:00.700 | to your spouse, it doesn't come into your estate.

00:36:04.140 | And so it's not part of your estate, and the executor's commission doesn't apply to that.

00:36:09.540 | If you had a second account at Vanguard for $250,000, and let's say you designated the

00:36:16.860 | beneficiary on the Vanguard form as your estate, then in that case, that $250,000 would come

00:36:26.000 | into the estate, and the executor would get a commission based on the percentage amount.

00:36:32.420 | And that would be the equivalent of having no beneficiary named also, the outcome would

00:36:36.900 | be the same to the estate.

00:36:39.100 | Correct, right, it wouldn't go.

00:36:42.460 | Most people don't do this.

00:36:43.860 | Most people want it to go out of the estate directly to the family person or an individual.

00:36:50.140 | But yeah, but for for some planning purposes, you may want to have the assets actually come

00:36:55.140 | into the estate.

00:36:56.740 | And in that case, yeah, it would the $250,000 would come into the estate and be administered

00:37:03.140 | under the will, however, the will specifies.

00:37:06.220 | Yeah.

00:37:07.220 | Great.

00:37:08.220 | So with that, again, this, this audience, a lot of Bogleheads are super educated on

00:37:13.540 | many things.

00:37:14.540 | But we also have folks who don't have such a deep foundation.

00:37:19.620 | Can you walk us through intro to probate, nuances, intricacies?

00:37:25.300 | What does it mean?

00:37:26.640 | When is it relevant?

00:37:27.780 | How to how to have it go optimally?

00:37:30.420 | Absolutely.

00:37:31.420 | Sure.

00:37:32.420 | Well, one thing, one thing that's, that's very important.

00:37:37.500 | And I, we touched on this a little bit earlier.

00:37:40.500 | But this whole idea of knowing your closest blood can, you know, because, again, you can

00:37:46.980 | leave your property to anyone you want, you can disinherit, well, you can disinherit

00:37:53.380 | your spouse, although in New York, and again, in most states, they have a legal right to

00:38:00.380 | file a right of election for at least one third of your estate.

00:38:04.020 | So that way, you can't totally lock out a spouse.

00:38:07.860 | But legally, you can disinherit children, parents, siblings, family, anybody.

00:38:15.180 | And is there a specific language that holds up really well, assuming it can be contested?

00:38:21.300 | Right?

00:38:22.300 | Well, what some people do is they'll, like, if, if they want to, if they're concerned

00:38:30.060 | that a, say, a disaffected child may contest a will that leaves most of the property to

00:38:36.940 | other children or someone else, they'll say, okay, I'll, I'll leave my child $30,000.

00:38:45.740 | But on the condition that they don't contest my will, if they do contest the will, then

00:38:49.460 | they get nothing.

00:38:51.380 | Another, another recommended step is if you are disinheriting someone that you naturally

00:38:58.540 | would be expected to include in your will, you just do out an affidavit, just giving

00:39:03.180 | the reasons, you know, why you're doing that.

00:39:09.580 | And then of course, I mean, sometimes if some attorneys will do a video tape of a will execution

00:39:17.380 | signing, if, if they fear there'll be, might be a contest or something, just to have a

00:39:24.180 | little evidence, a little more evidence that the testator was of sound mind at the time,

00:39:28.580 | that kind of thing.

00:39:29.580 | Makes sense.

00:39:30.580 | You're probably seeing more and more of that.

00:39:32.260 | In your example of conditionally disaffected child will inherit $30,000 if they don't contest.

00:39:42.660 | But let's say they have a strong case to contest and could be entitled or awarded to a lot

00:39:49.820 | more than 30, such that they take this risk.

00:39:53.340 | In your example, if they win the contest, but the will said excluded, if they contest,

00:40:00.260 | how would that play out?

00:40:01.700 | Right.

00:40:02.700 | So if they win the contest, then the will is thrown out totally.

00:40:08.580 | And then it goes, it's as if they, the person had no will, and then you look to the default

00:40:14.460 | in test to see law for the state.

00:40:17.100 | And that's going to say closest blood can.

00:40:20.860 | And in New York, it's the first 50,000 goes to the spouse.

00:40:24.980 | There's a spouse and half of the remainder.

00:40:27.640 | And then the other half of the remainder would be divided equally amongst the children.

00:40:32.620 | So in that scenario, I mean, if the child was an only child and his or her father had

00:40:41.180 | no spouse, then they would inherit everything.

00:40:44.380 | But depending on the family situation, it could vary.

00:40:47.200 | And that's the reason why when I do a will intake, I always try to get the names and

00:40:53.300 | addresses of closest blood can, even if they're not in the will, because these people have

00:40:58.220 | to be notified at death and given an opportunity to object to a will.

00:41:04.200 | And if they can't be found or unknown, the court is going to hold up probate until there's

00:41:12.540 | like a due diligence search to either locate these people, give them the opportunity to

00:41:17.620 | object or else satisfy the court that a thorough search has been done.

00:41:22.980 | And then even after a thorough search has been done, the court's going to want a publication

00:41:30.940 | of the official notice of the opportunity to object to the estate to be put in a newspaper

00:41:36.040 | and run.

00:41:37.460 | It's just part of the legal requirements.

00:41:39.780 | Okay.

00:41:40.780 | So I want to follow up briefly on two things you mentioned, and then we still will revisit

00:41:45.420 | probate what it is exactly, what it means to go through it.

00:41:50.220 | So two things, when you said, if the person wins the contest, the whole will is thrown

00:41:55.100 | out.

00:41:56.100 | Is that the case for any contest or can a will be challenged in part and the rest of

00:42:01.300 | it stand?

00:42:02.300 | That's the first.

00:42:04.060 | And then I want to plant the second and I'll hold you to it so that we don't forget.

00:42:09.620 | You mentioned closest blood can.

00:42:11.580 | What about step-relatives?

00:42:12.580 | Step-relative?

00:42:13.580 | No, a step, I mean, if a child, yeah, that wouldn't, the only way that would apply is

00:42:24.860 | if there's like a legal adoption.

00:42:27.300 | Yeah.

00:42:28.780 | Step-parent is not considered a parent.

00:42:31.900 | A step-like sibling wouldn't be considered a legal sibling unless there was an adoption.

00:42:40.140 | So a stepson would not have legal entitlement the way a blood son would, or daughter, but

00:42:51.100 | adoption makes them the equivalent of a blood relative?

00:42:55.820 | Yes.

00:42:56.820 | Okay.

00:42:57.820 | Yes.

00:42:58.820 | Great clarification.

00:42:59.820 | And then contesting a will in part versus in full.

00:43:03.460 | Right.

00:43:04.460 | I mean, it's not only the will that a contestant can object to.

00:43:09.140 | They can also object to the appointment of the executor.

00:43:13.100 | So yes, in theory, a disgruntled family member could say, I'm contesting the part of the

00:43:19.580 | will that appoints this person as executor.

00:43:23.940 | And in my mind, that's not necessarily attacking the will in that the contest could say, well,

00:43:31.980 | now the person has a drug problem, so they're not drug or alcohol or substance abuse.

00:43:40.300 | So they're not, because of that, what's become a disability, they're not qualified to serve

00:43:46.060 | as executor.

00:43:47.060 | It's not that there's anything wrong with the will per se, it's just this person can't

00:43:50.780 | do that.

00:43:52.780 | The only other thing I'm aware of along those lines, like a partial contest of a will is

00:43:59.540 | if you say a certain beneficiary shouldn't inherit or legally can inherit because they

00:44:04.500 | committed some kind of a crime, like you do have situations where a spouse will kill another

00:44:10.620 | spouse and you're not allowed to benefit from an intentional wrong act or murder like that.

00:44:20.420 | So that comes into play in that sense, too.

00:44:24.540 | But I've never seen or heard of a will contest where someone comes in and says, we're attacking,

00:44:33.180 | we want to knock out these gifts here, but allow the other gifts in the will.

00:44:39.340 | It's either the person had capacity and the will was valid or it's not.

00:44:44.260 | Okay.

00:44:45.260 | So closer to an all or nothing situation.

00:44:47.220 | Okay.

00:44:48.220 | And then can you walk us through probate, high level, and then just heads up for other

00:44:53.180 | folks, I see we're 10 to the hour.

00:44:57.140 | Summerfield and I will try to wrap by nine Eastern and turn it over to the chat questions.

00:45:02.380 | So Summerfield following your probate response, let's transition to trust one on one.

00:45:09.300 | What is a trust, et cetera, but after probate.

00:45:11.780 | Sure.

00:45:12.780 | Sure.

00:45:13.780 | So for probate, okay, you have your original will and touching on issues you raised earlier

00:45:20.580 | about copies.

00:45:22.700 | You only want to have one original will.

00:45:24.940 | If you have duplicate original wills, you have to produce all of them.

00:45:30.300 | If you can't produce all of them, the will is dead.

00:45:33.680 | It's out.

00:45:34.680 | And that's part of the affidavit, the self-proving affidavit that the will witnesses have to

00:45:40.700 | sign for probate to go through is their statement that there was only one original will sign.

00:45:47.260 | So you want to, you have to produce that original will, you have to produce a death certificate

00:45:52.980 | for the court.

00:45:55.140 | You have to-

00:45:56.140 | So really quick, is it preferable, so is it best to have only one original?

00:46:04.020 | Let's say the person wants one in a safety deposit box, one with the spouse, one with

00:46:08.980 | the executor, is that ill-advised?

00:46:10.700 | Yes, definitely.

00:46:12.820 | Because again, if something happens to one of those originals, whether it's lost or maybe

00:46:20.100 | someone puts a line through the fifth page of one of those originals, that can knock

00:46:26.180 | out the whole shebang.

00:46:28.260 | So you really don't, that's, yeah, highly recommend against that.

00:46:34.460 | That being said, when I'm having a testator sign his or her original will, I always do

00:46:42.220 | a conformed copy of the will, which is basically a duplicate that the attorney fills out that

00:46:49.140 | can be used as a substitute in case something happens to that original will, lost or destroyed.

00:46:56.060 | Court has provisions for accepting that.

00:46:58.100 | There's nothing wrong with making photocopies of wills and sharing with the family and all

00:47:02.460 | that.

00:47:03.460 | But yeah, it's recommended not to have more than one original will.

00:47:08.260 | Would you recommend generally speaking, I know situations vary, that the will be shared

00:47:12.440 | with beneficiaries in advance?

00:47:16.020 | That's really up to the family or the person doing their will.

00:47:21.760 | I'm not sure it matters that much.

00:47:23.340 | I mean, in terms of avoiding will contests and avoiding family angst and upset, to the

00:47:33.460 | extent that you can treat everyone the same, you know, and just try to promote peace, you

00:47:39.680 | know, that's the idea.

00:47:41.220 | I mean, obviously that can't be done every single time, but you want to try to do your

00:47:46.940 | will and share or don't share the will with the family, with the mind towards promoting

00:47:54.380 | people working together and continuity and peace once you're gone.

00:47:59.420 | Because if you start springing things on people, that's just a recipe for legal battles.

00:48:04.100 | Understood.

00:48:05.100 | All right.

00:48:06.100 | I'm going to try to accelerate this because time is going super quick.

00:48:09.860 | So any other key points for probate, what the process means, what it accomplishes, how

00:48:15.300 | to have it go as smoothly as possible?

00:48:17.420 | Right.

00:48:18.420 | It's basically the court looking at the will, the witnesses affidavit, the death certificate,

00:48:27.500 | just the general picture of the estate and just satisfying itself that there was no kind

00:48:33.140 | of fraud, that no one took advantage of the testator such that his or her wishes are not

00:48:38.620 | going to be honored and, you know, making sure the right person's appointed executor

00:48:43.860 | and just kind of loose supervision over the estate.

00:48:47.020 | Okay.

00:48:48.020 | Are there situations where you want to avoid probate?

00:48:51.380 | What are the risks and benefits?

00:48:53.700 | Right.

00:48:54.700 | For one situation, the situation we addressed earlier in terms of if you have a family member

00:49:03.420 | whose whereabouts you don't know or they're disaffected, in that kind of situation, to

00:49:12.660 | avoid a lengthy due diligence search, potentially to avoid a will contest, it makes sense to

00:49:21.860 | think about doing a trust or having all your big assets be with designated beneficiaries

00:49:29.700 | so you don't have a lot of money being held up in a lengthy estate probate process.

00:49:36.980 | And in terms of paying for these things, it's one thing to inherit as a beneficiary.

00:49:41.800 | Have you seen folks who write, you know, the person whose will it is, are they setting

00:49:50.180 | aside money for all these expenses?

00:49:53.860 | Is that advisable?

00:49:54.860 | Does that make it easier?

00:49:56.860 | Well, not per se.

00:49:58.820 | I mean, you have to be a person doing their will wants to or should be attuned to their

00:50:06.460 | benefit to their beneficiary designations to the extent that they you want to be able

00:50:13.220 | to if you're planning for an estate to be up and running and you have specific gifts,

00:50:19.400 | you only want to have done in your will, then you need to make sure that you're not giving

00:50:24.220 | every single asset to your daughter by beneficiary designations.

00:50:30.000 | You want to leave some money that's just going to come into your estate for that purpose,

00:50:34.620 | for the purpose of making those specific gifts and for having a sum on hand to pay the executor

00:50:40.540 | and last expenses.

00:50:41.780 | Got it.

00:50:42.780 | All right.

00:50:43.780 | Sound advice.

00:50:44.780 | So let's transition to what is a trust high level?

00:50:49.560 | When is it most needed?

00:50:50.800 | When is it not needed?

00:50:55.480 | What are the different?

00:50:56.600 | What are the main what are the most common trust folks should be thinking about and learning

00:51:00.960 | about?

00:51:01.960 | Well, yeah.

00:51:02.960 | Yeah.

00:51:03.960 | Trust just to give a brief explanation.

00:51:08.920 | Trust is a legal document relationship where property is legal title is held with the trustee.

00:51:20.340 | The trustee has possession of the financial assets, but they're not for the benefit of

00:51:26.580 | the trustee.

00:51:27.580 | They're for the benefit of a third party where it could even be partially for the benefit

00:51:34.300 | of the trustee, but also for other people.

00:51:37.540 | So there's what's called a fiduciary relationship where the trustee, the person holding the

00:51:42.600 | property is not just free to do whatever they want because it's their money.

00:51:48.000 | They have a legal obligation to use the money, apply the money as directed by the trust to

00:51:57.860 | the extent the trust sets that forth and for the best interests of the beneficiaries.

00:52:04.120 | And so these kind of relationships, the trust relationships, typically where you see this

00:52:10.780 | is for for children, you know, for parents leaving money in their will or grandparents

00:52:18.460 | for children, people under 18 or for disabled people, you know, people who are at some kind

00:52:27.520 | of disadvantage such that, you know, if you just handed a 10 year old a hundred thousand

00:52:32.880 | dollars, you know, that that's a recipe for for disaster, much the same if you handed

00:52:39.060 | a person with severe physical or mental disabilities, that kind of money, you know, it's fraught

00:52:45.660 | with peril.

00:52:47.100 | And the whole aspect, too, of if you're receiving government benefits as a person with a disability

00:52:55.540 | and inherit straight inheritance can be those assets can be seized by the government for

00:53:02.380 | reimbursement for the government benefits or they can disqualify a person from receiving

00:53:08.500 | public assistance.

00:53:10.340 | So in that kind of scenario, it's beneficial often to set up some kind of a trust where

00:53:15.980 | assets can be applied to help the child, the disabled person, but you don't face the perils

00:53:23.480 | of just turning the money over to those individuals.

00:53:26.780 | OK, super helpful.

00:53:28.780 | So for folks, broadly speaking, what situations do you think?

00:53:36.540 | Have you seen that a trust was overlooked but would have been hugely advantageous?

00:53:41.460 | Oh, well, actually, I can I can think of an estate that I'm working on right now.

00:53:48.020 | And I had actually recommended that this person, the testator, do a trust.

00:53:56.000 | But and the person was right, the person declined because they said it would have been a lot

00:54:01.120 | of work for the person.

00:54:02.920 | And they were in terms of retitling all their assets, because it's not a matter of just

00:54:07.240 | signing a trust document and boom, that's it.

00:54:10.620 | To do a real trust that's going to bypass probate, you have to retitle all your assets

00:54:16.940 | in the name of the trust.

00:54:19.180 | But in this scenario, this this testator, she had a family situation where she basically

00:54:26.360 | had no family or none that she knew about.

00:54:30.800 | And so we had her had her do, you know, affidavits of her family tree, get documents together

00:54:38.740 | to try to help for the due diligence search that was to come.

00:54:43.480 | But lo and behold, when she passed away.

00:54:47.940 | I had to start the due diligence and try to find family members.

00:54:53.320 | And it reached a point, you know, I'm not an expert genealogist or anything.

00:54:56.500 | So there's only so far I could go.

00:54:58.440 | And ultimately, we had to the executor had to pay for his ancestry dot com.

00:55:03.700 | They have a service where they will do thorough searches.

00:55:07.300 | So and it's not the end of the world, but it is time and it is money.

00:55:12.020 | And if this individual had done a trust and gone through the then laborious steps of retitling

00:55:17.740 | her assets into the trust, her estate process would have been much, much smoother and quicker.

00:55:24.500 | Okay, that helps.

00:55:26.360 | So in closing, as we're hitting nine Eastern, can you do high level power of attorney?

00:55:33.700 | What does it mean?

00:55:36.580 | What's the life of it?

00:55:37.900 | What terminates a power of attorney or different options to terminate it?

00:55:42.060 | Why is it important?

00:55:43.060 | What it allows what it doesn't?

00:55:44.740 | And then my last question, as broadly as it could help the audience, what do you think

00:55:50.620 | people are least aware of that they should be more aware of in this under this estate

00:55:56.460 | planning umbrella?

00:55:57.460 | Why don't we start with power of attorney?

00:55:59.980 | Okay, sure.

00:56:02.220 | Power of attorney, well, there's two kinds.

00:56:05.620 | The general kind that most people think of when they hear power of attorney is what's

00:56:10.820 | called a durable power of attorney, which means it survives incapacity.

00:56:15.720 | And that's what most people want and really should have.

00:56:19.980 | Because it basically says, you know, you're you've appointed someone a trusted family

00:56:25.260 | member or friend to step into your shoes to basically do anything that you could do for

00:56:34.900 | situations where you lack capacity.

00:56:39.260 | And so you want the document to hold up, you know, should you have some kind of accident

00:56:46.140 | or illness where you can't handle your financial affairs?

00:56:49.300 | That's a durable power of attorney.

00:56:51.340 | There are non durable power of attorneys, which are more limited and specific.

00:56:56.460 | Like let's say you are going to purchase a home, and you're about to the closing is a

00:57:02.580 | week away, but you're you're called off on business, or you have a family tragedy, you

00:57:09.420 | can't make the closing, then what you can do, you can sign a non durable power of attorney,

00:57:15.900 | which won't survive your incapacity.

00:57:18.740 | But it appoints a your attorney or your friend, your cousin, to be able to go to the closing

00:57:25.320 | in a week's time and sign the documents necessary to close on the purchase of your home.

00:57:30.360 | So that's a non durable power of attorney.

00:57:32.940 | But for our purposes of state planning, you want most people, it's important to have a

00:57:37.980 | durable power of attorney.

00:57:40.420 | Because if you don't, and God forbid something happens to you where you're not able to pay

00:57:44.140 | your bills, sign documents, handle your affairs, then chances are, you're going to have to

00:57:52.820 | have a legal guardian appointed to do that.

00:57:55.380 | Because there's no if you're disabled, to the extent that you can't then make out your

00:57:59.980 | power of attorney, there's no way for anyone to get legal authority to act on your behalf

00:58:05.880 | absent a court proceeding, which is time and money and invasion of privacy.

00:58:11.420 | So so power of attorney is important that way.

00:58:14.820 | Okay, very helpful.

00:58:16.220 | Thanks.

00:58:17.220 | And so then as in closing for this portion of tonight's, and then we'll, we'll go to

00:58:22.100 | the audience for both pre submitted questions integrated with the chat.

00:58:26.140 | What do you think is so often overlooked that folks should really be more aware of?

00:58:32.500 | Yeah, I'll say I'll say three things.

00:58:35.220 | And one of them I mentioned before, and that's the thing about knowing who your closest blood

00:58:40.860 | can is.

00:58:42.660 | Because so many people, when I asked them for their closest blood can they'll say, well,

00:58:47.700 | I'm not leaving this person anything in my will, what does this person have to?

00:58:52.100 | Why did they?

00:58:53.100 | Why did they even come up?

00:58:54.100 | You know, I haven't seen them in 20 years.

00:58:56.580 | But unfortunately, the fact is, that the court is going to require that that person be a

00:59:01.780 | part of the process at least get notice, and your will is not going to be probated until

00:59:06.580 | that person is found, and either signs a waiver or is cited and and you know, doesn't file

00:59:12.700 | objections.

00:59:13.940 | So having your family tree squared away, that that's something that's often overlooked and

00:59:19.500 | is important.

00:59:21.180 | The other two things for a trust, some, let's say you want to do a living trust to avoid

00:59:29.340 | probate because you have a family situation or something where probate is problematic.

00:59:36.260 | A lot of people feel incorrectly that if they sign their living trust document, that's it,

00:59:44.020 | they're complete with their job.

00:59:46.020 | When in fact, for that living trust document to be operative, you have to retitle your

00:59:51.140 | assets in the name of that trust, you have to go to your bank, you have to go to Vanguard,

00:59:55.780 | you have to go to your life insurance, whatever and put the asset in the trust name, or else

01:00:01.940 | the asset won't be administered by the trust.

01:00:05.300 | And the only way you're going to administer that asset, have it go to who you want it

01:00:08.860 | to go to, is for a probate of your will, which you ostensibly are trying to avoid.

01:00:16.020 | The third thing, mistake I see sometimes, is for powers of attorney.

01:00:23.100 | People will sign their power of attorney, but then their agent, that person needs to

01:00:30.940 | sign the power of attorney as well.

01:00:33.140 | And ideally, they'll sign it within a week or so of the principal signing it.

01:00:38.660 | And sometimes I will give the power of attorney to the person that's just signed it and they

01:00:43.700 | say, "Okay, I'm going to have my daughter sign it or my husband sign it, and then I'll

01:00:48.660 | get it back to you and we'll be all set."

01:00:51.060 | And then something happens, they don't follow through.

01:00:54.140 | And unfortunately, at that point, the power of attorney can just be invalid.

01:00:59.460 | Because if the longer-

01:01:01.240 | Can you clarify, you use the term agent and you said the daughter or the, are these the

01:01:05.540 | intended power of attorney person or?

01:01:09.420 | Correct.

01:01:10.420 | Like, let's say a mother appoints her daughter as her agent on her power of attorney, and

01:01:17.060 | the mother signs the power of attorney, giving the daughter the authority.

01:01:21.700 | But for the New York State power of attorney form, the daughter has to sign the form as

01:01:26.300 | well, and banks and financial institutions, they want the daughter to have signed on as

01:01:33.340 | agent within, say, a week of her mother signing on.

01:01:38.820 | If much more time goes by, often they will balk at honoring the power of attorney because

01:01:44.140 | they'll say, "Why is there this big time lag?

01:01:47.700 | Something's wrong."

01:01:48.700 | And is it simply the date that the signer dates?

01:01:56.500 | Because they could post, they could put an earlier date, right?

01:01:59.900 | Well, it has to be notarized.

01:02:01.740 | Okay.

01:02:02.740 | That answers it.

01:02:03.740 | Yeah.

01:02:04.740 | With that, I know we have many questions from the audience.

01:02:07.820 | I'm over time.

01:02:09.660 | Thank you so much, Summer.

01:02:10.660 | One of the questions that came in on the RSVP, many of them involved spendthrift trusts,

01:02:18.140 | and also just the difference between a trust and a will, and also special needs trusts.

01:02:27.220 | And first, on the difference between a trust and a will, Summerfield, is it correct that

01:02:32.500 | one of the main differences is that a will is public record, and a trust is private?

01:02:40.220 | So for example, if you are somebody important, I've heard that Robin Williams kept everything

01:02:47.340 | in trust.

01:02:48.720 | Nobody knows anything about his, very little about the passing of his estate, because it

01:02:54.860 | was all in trust, whereas we know other people have not done that, and they are in wills

01:03:00.820 | and they are public record.

01:03:02.700 | So that would seem to me to be one consideration in going a trust versus a will.

01:03:09.840 | And then another one that I heard is that a trust moves along quicker.

01:03:15.940 | If you want your beneficiaries to have their, what you've left for them, smoothly and quickly,

01:03:25.020 | you put it in a trust, a living trust, or a revocable trust, just to get it there right

01:03:29.900 | away.

01:03:30.900 | The trustee just hands it over, whereas a will, most of these, everything is distributed

01:03:38.140 | towards the end of the will.

01:03:39.460 | It takes a while for the will to progress through the system.

01:03:43.060 | And it could take months and months for the beneficiaries to get there, what they have

01:03:49.060 | been given.

01:03:52.380 | Have you found that to be true?

01:03:54.380 | That is true.

01:03:55.380 | That is true.

01:03:56.380 | And yes, because the will has to be probated, approved by the court, and that takes time.

01:04:04.900 | And then even after that, once the executor is appointed, in New York, there's a statutory

01:04:11.420 | period of seven months over which creditors have the right to submit claims on the estate.

01:04:18.460 | And so while the executor technically, right when he or she is appointed, can make distributions

01:04:24.740 | to beneficiaries, it's generally unwise to do that because if expenses come in, if claims

01:04:33.860 | come in, and the executor is given out money such that he or she can't meet the burden

01:04:43.340 | of the expenses that come into the estate, then he or she is personally liable to the

01:04:49.100 | extent that he gave that money out, liable on those legitimate claims.

01:04:55.320 | So as a practical matter, executors typically wait the seven-month period, even after they've

01:05:01.820 | gone through probate, before they'll make the beneficiary designations.

01:05:06.620 | And trusts are quicker.

01:05:09.020 | Now it's a little bit of a catch-22 in that you're going to have to go through some paperwork

01:05:18.460 | and hassles with either a living trust or a will.

01:05:22.780 | Unfortunately, it's kind of unavoidable.

01:05:25.280 | The good thing about a trust is that you handle the hassles ahead of time.

01:05:33.480 | You deal with your own financial institutions and banks.

01:05:37.400 | You show them the trust document.

01:05:41.240 | It's not like a traumatic experience or anything, but the financial institutions, this isn't

01:05:49.680 | a top priority for them.

01:05:51.320 | They're not getting new money or new customers.

01:05:54.320 | They're just having to do bureaucratic change of ownership forms.

01:05:58.440 | So they're not particularly motivated to be helpful or quick.

01:06:01.920 | So it is a little bit of a frustrating process.

01:06:06.120 | But if you go through it and you complete it, then the benefit is, yes, when you pass

01:06:11.360 | away, you don't have to go to the court.

01:06:14.360 | You don't have to deal with probate.

01:06:17.240 | The assets will transfer by trust when you go to the financial institution and show them

01:06:23.280 | the death certificate.

01:06:24.280 | I mean, you have to fill out some forms, but it's a much smoother, easier process than

01:06:30.320 | the probate process.

01:06:32.760 | And also another thing, a trust can provide for periodic distributions to a beneficiary,

01:06:39.840 | for example, children, elderly people, and even if, and this gets into some of the other

01:06:45.280 | questions on the RSVP, about leaving funds, leaving your estate to children who may burn

01:06:55.800 | through their money very quickly.

01:06:58.280 | If you leave it in a trust, it's true, isn't it, that you can distribute it over time,

01:07:03.760 | whereas in a will, can you do that?

01:07:08.080 | Well, yes and no.

01:07:10.120 | And that's a good, you're bringing up an excellent point.

01:07:13.760 | And because we've, so far we've looked at trusts and wills as two separate things and

01:07:20.200 | not being intermingled and not working together, when in fact they can and do work together

01:07:27.000 | oftentimes, and in this sense that oftentimes in a will, people will set up a trust and

01:07:35.400 | a will.

01:07:36.400 | So it's not a living trust where you've gone through all the rigmarole before you pass

01:07:41.040 | away of retitling your assets into the name of the living trust.

01:07:45.880 | Rather in planning your will, you've written the trust into your will.

01:07:51.680 | And like with the example with children, you can say in your will, if I pass away before,

01:08:00.160 | you know, while my child is a minor, then my gift to my child doesn't go directly to

01:08:05.800 | him or her, it goes in trust.

01:08:08.640 | And yes, and I direct that one third of the trust be distributed to my child when she's

01:08:15.440 | 25, the second third gets distributed to her when she's 30, and the final third gets distributed

01:08:22.120 | to her when she's 35.

01:08:23.800 | You can set that up exactly how you want.

01:08:28.520 | But then that's a trust in a will, not a living trust, but a trust in a will.

01:08:32.680 | And those actually are, you know, are fairly, fairly common, generally, a little more common

01:08:39.280 | than the living wills.

01:08:40.920 | So,

01:08:41.920 | Well, before the next question, I want to just mention that I did read somewhere, there

01:08:47.240 | are only two things we should never do ourself.

01:08:51.440 | The first is anything electrical.

01:08:54.600 | And the second is prepare our own will.

01:08:58.440 | But I don't know about the second one so much because Vogel heads are pretty, they're very

01:09:07.880 | detail oriented.

01:09:08.880 | Right.

01:09:09.880 | The other question had to do with spendthrift trust, we had two questions on spendthrift

01:09:14.200 | trust.

01:09:15.200 | What is a spendthrift trust?

01:09:16.760 | Well, spendthrift trust is basically a provision or a type of trust where you're saying that

01:09:25.320 | the assets in the trust cannot go to creditors of the beneficiary, or cannot go to reimburse,

01:09:35.380 | say the government for public assistance that may have gone to the beneficiaries.

01:09:41.080 | So it's basically seeking to streamline the funds in the trust to go directly to the beneficiary

01:09:52.600 | for the beneficiaries enjoyment or be applied for the beneficiary for education, support,

01:09:58.880 | maintenance, something like that, just to prevent some kind of leakage where a creditor

01:10:04.640 | or spouse or someone can get at those funds.

01:10:11.360 | And that's a benefit of that kind of a trust.

01:10:15.120 | As opposed to if you simply handed the money over via a will or via a gift, if you give

01:10:21.980 | it unfettered to a person, then yes, if they get sued, if they have creditors, if they

01:10:28.160 | get divorced, if they apply for public benefits, their assets are subject to being lost.

01:10:36.320 | And it is a catch 22 though, because you do see situations where trust for people are

01:10:43.680 | helpful for the beneficiaries, but you also see situations where beneficiaries are resentful

01:10:49.780 | that they aren't simply left the money.

01:10:53.440 | Sometimes they feel slighted, like what you don't trust me to manage my own money.

01:10:57.080 | Like I'm not an adult, I can't handle things.

01:11:01.060 | Sometimes they can feel resentful of the trustee.

01:11:04.440 | The person can say, I have needs, I need to buy a car, I have a health issue.

01:11:10.440 | And the trustee is being stingy with me.

01:11:13.000 | They're not releasing the funds for my wishes or my needs.

01:11:19.620 | So it cuts both ways, but obviously you have to evaluate your own situation and make the

01:11:26.540 | best decision you can.

01:11:27.940 | Thank you.

01:11:28.940 | Okay.

01:11:29.940 | Carol, do we have any questions from the chat?

01:11:32.960 | Yes, we do have one that is in Florida, but I do believe it should have some general applicability.

01:11:40.020 | First of all, are you aware of any special treatment of a primary residence in Florida

01:11:43.780 | regarding it, allowing it to avoid probing?

01:11:46.420 | And if so, assuming you have beneficiary designations on all of your other assets, so you don't

01:11:51.160 | otherwise need to go through probate, how would you direct who your house goes to?

01:11:55.940 | Would you use a lady bird deed?

01:11:58.280 | And just for this question, there is no wife or children.

01:12:01.380 | Oh, yeah.

01:12:03.300 | If I were a Florida attorney, hopefully I could answer that.

01:12:07.380 | But unfortunately, in New York, we don't have those kinds of things.

01:12:11.240 | So I really, unfortunately, I'm not able to answer that.

01:12:15.020 | Okay.

01:12:16.020 | Thanks anyway.

01:12:17.020 | Sure.

01:12:18.020 | Sure.

01:12:19.020 | Oh, Alice.

01:12:20.020 | Yeah.

01:12:21.020 | So we have a question from Steve.

01:12:28.180 | What are your thoughts on checking and verifying a will with chat, chat, GPT, or other similar

01:12:33.680 | programs?

01:12:34.680 | To be honest, I'm unfamiliar with with those programs.

01:12:41.980 | I mean, I know about the wheel kits and those kind of things.

01:12:45.660 | Um, yeah, I don't.

01:12:49.180 | Yeah, I guess, yeah, I really, again, I have to plead ignorance.

01:12:54.940 | I mean, to the extent I mentioned earlier that I think that, to the extent you can keep

01:13:00.100 | things simpler, and maybe a simpler program or just following the will of an attorney

01:13:06.940 | is done for a family member, I personally would recommend that a little more than trusting

01:13:13.500 | yourself or specific programs that because the will of your grandfather that you have,

01:13:24.860 | I think the odds are pretty high that that's gone through probate, and, and held up to

01:13:30.780 | the court review, whereas something that comes from the computer, you know, probably hasn't

01:13:37.580 | hasn't had that vetting.

01:13:39.660 | Yeah.

01:13:40.660 | Um, thank you.

01:13:43.220 | The question regarding the Lady Bird deed in Florida, we can push that question, perhaps

01:13:50.300 | towards the end of the meeting.

01:13:52.820 | And because there are Florida, there are Florida people here, and we do know a little bit about

01:13:59.300 | the Lady Bird deeds.

01:14:01.140 | Okay.

01:14:02.140 | Um, let me see.

01:14:04.860 | And by the way, the states that have Lady Bird deeds are Florida, Texas, Michigan, West

01:14:12.700 | Virginia, and Vermont.

01:14:17.100 | And a Lady Bird deed can be in other states.

01:14:21.020 | But it's called an enhanced life estate deed.

01:14:26.060 | It's not a trust.

01:14:27.060 | It's a deed.

01:14:28.060 | But why don't we put that question at the end of the meeting, so that we can discuss

01:14:32.780 | the other questions.

01:14:33.780 | Now, let me see, Lucas, are there any other chat questions?

01:14:38.420 | Yeah, yeah, there's a few more.

01:14:40.940 | Um, thanks.

01:14:41.940 | Thanks, Summerfield.

01:14:42.940 | Thanks for this insightful discussion.

01:14:45.940 | Um, so one, uh, one question was, if a will is created in one state, and you have moved

01:14:54.100 | to another state, is a new will suggested or required?

01:14:58.860 | Um, what I recommend to people is I say, take your will that we've done in New York and

01:15:07.980 | show it to your attorney in Michigan, or a new attorney in Michigan and ask that individual.

01:15:14.220 | Because the state laws are generally similar in terms of the requirements for, you know,

01:15:21.860 | witnesses and all that and a will.

01:15:24.300 | But like, my main concern with that is, I could see where, say, in Michigan, the specific

01:15:34.300 | statute setting forth what the witness affidavits have to recite, it could be slightly different.

01:15:43.340 | So that while the will that we did in New York is still valid, the Michigan court, when

01:15:49.980 | the person passes away, may want their specific will witness affidavits to be signed by the

01:15:56.900 | witnesses we had in New York.

01:15:59.900 | And in 20 or 30 years, for the people in Michigan to try and locate these New York witnesses

01:16:05.320 | and get them to re-sign affidavits, that's, that's enough of a challenge where in that

01:16:10.980 | situation, I would recommend, and I imagine the Michigan attorney would recommend, let's

01:16:15.700 | just do a new will here in Michigan.

01:16:17.940 | But the short answer is, take it to an attorney in the new state to be best guided.

01:16:26.660 | Great.

01:16:27.660 | Great.

01:16:28.660 | Thank you.

01:16:29.660 | Sure.

01:16:30.660 | Carol, any more questions from the chat?

01:16:33.140 | Yes.

01:16:34.140 | Would there be a circumstance under which it would be a good idea to videotape the signing

01:16:38.140 | of the will to demonstrate sound mind and intent?

01:16:42.340 | Yes.

01:16:43.340 | And, and I've, I've never done this and I've never been involved in a case where it has

01:16:48.260 | been done, but, but I have read literature.

01:16:51.660 | There are attorneys who say, and it makes sense that in certain situations you would

01:16:56.020 | want to videotape, you know, if a person has some kind of illness or disability, or they're

01:17:01.860 | really quite old or something, and you sense that there could be a challenge, then it makes

01:17:07.820 | sense that a videotape could be very valuable.

01:17:13.020 | But I've also read and heard where it could backfire as well.

01:17:17.020 | I mean, you could have a person who really has capacity, but they could look somewhat

01:17:22.540 | frail and fragile.

01:17:24.540 | And just that appearance could raise an inference that they don't have capacity.

01:17:28.860 | So the answer is yes, but I think you need to be a little bit careful with that, so.

01:17:37.300 | Thank you.

01:17:38.300 | Alice.

01:17:39.580 | Question from Jim.

01:17:41.620 | Can a will be modified by strikeouts, initials, et cetera, or do you have to redraft the company

01:17:48.660 | will?

01:17:50.380 | Well, it can be modified at the time of the will signing.

01:17:56.460 | Like, I mean, it happens with some frequency that, like a will I've prepared, maybe I've

01:18:03.900 | made a typo, or a person's address has changed, or the testator themselves, they'll want to

01:18:11.340 | make a change sort of at the last minute.

01:18:13.980 | And so it is fine at that point, when you're having the person sign their will, to do a

01:18:19.540 | line through that kind of thing, and you have the witness's initial and all that.

01:18:27.460 | As a practical matter, that's not-- well, it's not a big deal.

01:18:30.180 | The courts down the road, when you go to probate the will, they will want an affidavit just

01:18:34.900 | about that little change, which is not a big deal, but something to keep in mind.

01:18:40.940 | Where you can't do a cross out is after the will has been signed and witnessed.

01:18:46.420 | Like if the testator takes the will home, and a week or three years later, they want

01:18:50.620 | to make a small adjustment, doing a line through, that can invalidate the entire will.

01:18:55.660 | So you'd want to go back to the attorney and redo it.

01:19:01.380 | How would one know, Summerfield, whether it was done for your post?

01:19:06.700 | That's an excellent point.

01:19:08.860 | I suppose you'd have to look at the documents.

01:19:15.020 | If I've had a typo, or the testator's changed something at the last minute, I think whether

01:19:24.020 | I have the will initialed, and then-- I was going to say I put the date on, but I don't

01:19:32.820 | think we've done that.

01:19:35.180 | I think you just have to look at the totality of the-- probably looking at the-- because

01:19:43.700 | the change should be initialed by the witnesses.

01:19:47.060 | And you've got the-- if the handwriting for the initials doesn't match the handwriting

01:19:51.660 | of the witnesses at the end of the will, then that's a red flag that the testator or someone

01:19:57.620 | has done that themselves.

01:20:01.060 | So--

01:20:02.060 | That makes sense.

01:20:03.060 | The strikeout would be initialed, and perhaps dated, at the time of the signing.

01:20:07.180 | Right.

01:20:08.180 | Yeah.

01:20:09.180 | OK.

01:20:10.180 | We have another question from the RSVP.

01:20:14.220 | And this says, how do you handle firearms in an estate?

01:20:20.580 | None are NFA items, those requiring the ATF approval and tax stamp.

01:20:27.460 | There is a mix of firearms.

01:20:30.940 | Most go to the son and the rest to the wife.

01:20:34.980 | Do I place them in a trust or in a will?

01:20:38.940 | And I read years ago not to list individual serial numbers in a will.

01:20:47.340 | Right.

01:20:48.420 | My recommendation for that would be that you say in your will, I leave my personal property

01:21:03.460 | or my household effects or items in my home, items in my garage, I leave them to my executor

01:21:10.500 | to distribute as I have made known to him or her in a separate writing.

01:21:17.100 | So you're not actually mentioning, you're not putting down in your will that you have

01:21:20.900 | firearms.

01:21:23.460 | That's something that people do a lot of times for jewelry and that kind of thing.

01:21:27.740 | Because again, like we mentioned earlier, wills are a public record.

01:21:31.460 | And I think to the extent that you can not reveal every specific property that you own,

01:21:40.620 | I think that's probably better.

01:21:42.500 | Now, just so you know, like in New York State, within nine months of being appointed as executor,

01:21:51.580 | an executor or the attorney for the estate is required to submit an inventory to the

01:21:55.860 | court.

01:21:57.740 | And that inventory, one of the questions asks about firearms.

01:22:03.200 | And if there are firearms, you have to indicate that there are in the estate.

01:22:08.860 | And then there's a separate page you have to submit about the type and all that sort

01:22:12.140 | of thing.

01:22:13.380 | So in some cases, it's unavoidable.

01:22:18.740 | I mean, if you could leave the firearms, gift them prior to passing away, I mean, that's

01:22:25.380 | one option.

01:22:26.860 | A trust could be an option, but I'm not sure that that would actually work.

01:22:33.300 | I guess you'd have to check with the licensing authority in the state.

01:22:39.900 | And if the licensing authority will allow a trust, like if you can register the trust

01:22:47.300 | as the owner of a weapon, then that's fine.

01:22:49.940 | The trust can hold the title to the guns and that would pass separately from your estate.

01:22:57.380 | But I'm a little bit doubtful that the gun licensing authorities in the state are going

01:23:02.520 | to allow a trust as opposed to an individual to be the registered owner, because then the

01:23:07.980 | background checks and all that.

01:23:09.940 | But that's something you could look into.

01:23:12.260 | Summerfield, are there other things that you should not put into a will?

01:23:18.380 | For example, in the chat, they talked about funeral arrangements, organ donations.

01:23:26.300 | What I understand is that if you put those in the will, usually you're going to be long

01:23:30.580 | gone and buried before will is even found, perhaps.

01:23:35.580 | Exactly.

01:23:36.580 | I mean, it's not so much, I mean, putting it in the will, that's, I mean, that's, yeah,

01:23:42.660 | it's not going to help, but it's not the end of the world.

01:23:44.860 | The problem is if you rely, if you haven't done it elsewhere, if you're relying on the

01:23:49.700 | will to, for the organ donation and for the funeral, handling the funeral, yeah, it's

01:23:55.580 | going to, it's going to take too long.

01:23:57.220 | You should, you know, have it in a separate letter to your executor about your, or your

01:24:01.580 | family, about your funeral arrangements and last service.

01:24:05.180 | And you should have on your driver's license or on something with your doctor, you know,

01:24:10.220 | the, the organ donation form, you know, have that done before.

01:24:14.900 | If you want to put it in your will also, that's fine, but don't rely on the will because like

01:24:19.020 | you say, it's going to be too late.

01:24:21.740 | Lucas, any more chat questions?

01:24:25.340 | Yeah, let's see.

01:24:29.500 | One of them was, you know, what are the pros and cons of designating beneficiaries in a

01:24:34.980 | brokerage account?

01:24:36.940 | For example, like a TOD designation versus designating beneficiaries specifically in

01:24:42.900 | a will?

01:24:43.900 | Well, the pro, I think we've talked some about the pros.

01:24:48.500 | The pros are that the money is, if you designate someone on your account, as opposed to in

01:24:55.300 | your will, the money is 99% of the time going to go to the beneficiary much quicker because

01:25:03.700 | you just have to show a death certificate to the financial institution.

01:25:08.420 | You don't have to wait for the probate process, the estate process to go through.

01:25:14.340 | I mean, I suppose there, you know, strange circumstances where it could be a negative,

01:25:23.380 | like I remember I had one case, I think, where someone had left a beneficiary designation

01:25:30.060 | on their bank account to a family member, but they spelled the person's name wrong and

01:25:34.820 | the bank was very difficult about turning over the funds because the name didn't match

01:25:41.460 | exactly.

01:25:42.780 | And in theory, if you did that by will, probably you wouldn't have, the court wouldn't give

01:25:47.900 | you such a difficult time.

01:25:51.180 | I mean, another sort of, just to play devil's advocate, you could leave beneficiary designations

01:26:00.060 | in your accounts and then forget about them.

01:26:04.980 | And then when you go to set up your will, you could have your whole estate plan put

01:26:09.780 | forth in your will, and the fact that you've done the beneficiary designation is going

01:26:14.820 | to throw off what you plan for in your will.

01:26:18.740 | So, but if you integrate, if you know all your assets and your beneficiary designations

01:26:23.500 | in your will, you're going to avoid that pitfall.

01:26:26.020 | So.

01:26:27.020 | Okay.

01:26:28.020 | Thank you.

01:26:29.020 | Bob, I'd like to open it up for raised hand questions.

01:26:33.020 | Do any of the, does anybody have a question they would like to raise their hand and ask?

01:26:39.820 | 1, 2, 4, 8.

01:26:45.540 | You're mute.

01:26:48.700 | Hi, 1, 2, 4, 8.

01:26:52.820 | Are you ready?

01:26:53.820 | Yes, I am.

01:26:54.820 | Hi.

01:26:55.820 | Hi.

01:26:56.820 | I have a question that I, I had a question that I submitted via RSVP, it applies to at

01:27:03.300 | least nine states of the union and in parts, five or six others, and that deals with the

01:27:09.940 | difference between estate documents drafted in a state that does not have community property

01:27:17.980 | laws versus then moving into the state that does.

01:27:23.740 | So that was my question, and I wonder if Summerfield has anything to comment about things to watch

01:27:29.780 | out for in that instance.

01:27:32.060 | Yeah.

01:27:33.060 | I really, unfortunately, I really can't say much to that because I've only practiced in

01:27:38.820 | New York, you know, which is not a community property state.

01:27:42.340 | I haven't had, I mean, I've had some experience with people who leave the state and come into

01:27:47.140 | the state, but I've never been involved in the community property issue.

01:27:52.340 | I think the only, my only advice would be if you do change states to speak to an attorney

01:27:58.260 | in the state in which your new state, just to try to figure, yeah, figure all this out.

01:28:05.220 | And Summerfield, for folks not familiar, can you clarify what it means to be a community

01:28:10.620 | property state?

01:28:13.780 | Community property, if I remember my history, I think the, well, there's part, I think,

01:28:21.180 | with just laws in terms of divorce and spousal property, I think that's different.

01:28:29.900 | And it may even be tied in, and you guys may know this better than I do, some of you, but

01:28:34.820 | I think that, you know, when we set up our legal system in America, most of the legal

01:28:42.860 | system was modeled, most of the states modeled things on the old English system, the common

01:28:48.620 | law in England, and statutes and all.

01:28:52.180 | But the influence of the French and Napoleon, like Louisiana was in the Napoleonic code.

01:28:57.420 | And so that was a whole different, you know, just legal history background precedent.

01:29:05.300 | So I think that that's where that comes in.

01:29:09.100 | The community property states are, they're out west usually, Alaska, Arizona, California,

01:29:16.980 | Idaho, Nevada, New Mexico, Texas, Washington State, also Tennessee, Wisconsin, and Louisiana

01:29:34.180 | is its own thing.

01:29:36.660 | Yeah, I mean, generally, I think states are, look to do the similar, you know, very similar

01:29:51.940 | type thing.

01:29:52.940 | I mean, I'm sure there are differences in terms of rules and regulations, but like with

01:29:58.500 | spouses being disinherited, it would surprise me greatly that there were certain, if there

01:30:04.660 | were certain states where you could completely disinherit a spouse, you know, that.

01:30:11.100 | For example, Florida is not a community property state.

01:30:14.620 | But as you mentioned earlier, you cannot disinherit your spouse in your will, you do have to provide

01:30:21.940 | for them, I think it's 30% and for your minor children.

01:30:26.360 | So it's not a community property state, but it does still, the goal of it is to provide

01:30:33.340 | for, you know, your family so that they're not out on the streets.

01:30:38.820 | Sure, sure.

01:30:39.820 | Yeah, the question didn't arise from an intent to disinherit, it arose from the context of

01:30:47.220 | just making sure that the estate plan wasn't screwed up by, you know, the new laws in the

01:30:54.740 | new state.

01:30:55.740 | So I am an attorney, but I'm not an estate lawyer.

01:30:58.780 | So since I am an attorney, I'm trying to find out the answer to the question before I ask

01:31:02.580 | it on the record.

01:31:03.860 | So I thank you, Summerfield, for your advice, but I am going to hire a lawyer, I just kind

01:31:08.580 | of wanted to know what the answer was before I did.

01:31:11.020 | Sure.

01:31:12.020 | I mean, to me, the thing that always pops into my mind in terms of different states

01:31:18.020 | is not so much the will per se, but estate taxes.

01:31:22.220 | Because, you know, some states have an estate tax, and others don't.

01:31:28.620 | And there's always the federal estate tax, but that's at a very high threshold.

01:31:32.740 | So that doesn't really apply to many people.

01:31:36.140 | But some states have, yeah, the state taxes that do to apply to a lot of folks.

01:31:41.420 | Right.

01:31:42.420 | Yeah.

01:31:43.420 | But for example, on ours, we did one thing with a house in our primary, in our former

01:31:52.300 | state.

01:31:53.300 | And then now in the community property state, we bought a house.

01:31:56.020 | So it's going to get treated differently in the estate.

01:31:59.500 | So but I have a special needs trust to deal with.

01:32:03.340 | So I'm well on my way, but I just was looking for your perspective.

01:32:07.580 | So thanks for considering the question.

01:32:09.660 | Oh, sure.

01:32:10.660 | Sure.

01:32:11.660 | And good luck.

01:32:12.660 | Good luck.

01:32:13.660 | Thank you.

01:32:14.660 | Thank you.

01:32:15.660 | Does anybody else have a raised hand question?

01:32:19.060 | Miriam, in the absence of other raised hands, I'll, I'll ask two more of Summerfield that

01:32:26.060 | we ran out of time, which is Summerfield, can you give folks high level summary of healthcare

01:32:32.260 | proxy and medical directive slash living will?

01:32:37.180 | Sure.

01:32:38.700 | Just like the power of attorney was for your financial matters, the healthcare proxy is

01:32:46.020 | for your healthcare matters, where you're appointing someone to make the decisions that

01:32:51.380 | you would make if you had capacity, if you could communicate them.

01:32:58.020 | So I mean, in my experience, doing the financial power of attorney is is more important than

01:33:05.380 | a healthcare proxy.

01:33:07.500 | Because if you fall ill and go into a hospital, the doctors are going to speak and take direction

01:33:15.440 | from your closest blood kin, even without a healthcare proxy.

01:33:21.740 | But if you go to a bank without a financial power of attorney, you're you're you're, yeah,

01:33:27.220 | the bank's not going to honor the requests of your close family, they're going to insist

01:33:31.820 | on something in writing.

01:33:32.940 | So and but and to go along with the healthcare proxy, you can also do a medical directive,

01:33:39.300 | which is basically your statement of what kind of treatment you'd like to accept or

01:33:44.940 | refuse at sort of an end of life situation, you know, whether you accept artificial respiration,

01:33:55.500 | cardiopulmonary resuscitation, you know, all that sort of thing.

01:34:01.100 | And in New York, at least there, there's no specific statutes that say, as with the power

01:34:07.620 | of financial power of attorney, that doctors and hospitals have to honor a medical directive.

01:34:13.560 | But in cases that have gone before judges, if someone has a statement in writing that's

01:34:19.020 | witness that says, I want the plug to be pulled, if I'm in a coma, the writing holds up is

01:34:25.980 | given more weight by judges than testimony of friends or family saying, Oh, Susan always

01:34:32.820 | said if she was unconscious, she you know, she wanted the plug pulled.

01:34:37.980 | So

01:34:38.980 | Carol, do you have any more Alice from the chat?

01:34:44.540 | Yeah, there's a couple more.

01:34:47.060 | This may have already been covered.

01:34:48.300 | But there are two questions that were basically the same thing.

01:34:51.080 | If all of your assets are passing, you know, directly to beneficiaries via beneficiary

01:34:55.280 | designation or transfer on death.

01:34:57.040 | So there's two parts of this.

01:34:58.900 | What happens if you don't have any money to pay in this, there's no state to pay those

01:35:03.060 | final bills?

01:35:04.060 | And the other question is, like, should you leave part of your money to make an estate

01:35:09.340 | just to pay final final bill bills?

01:35:12.220 | Yeah, that's an excellent question.

01:35:17.020 | I haven't personally encountered that situation.

01:35:23.520 | I mean, I suppose it's possible that certain Yeah, I mean, yeah, it's possible what you

01:35:30.620 | know, whether it's taxes, or I don't know, child support or something.

01:35:36.980 | Or a lawsuit, I suppose it's conceivable that those entities, those creditors could somehow

01:35:45.500 | reach into assets that are left to D or directly to a beneficiary.

01:35:53.260 | I could see that happening.

01:35:55.060 | But but that this is just based on hunch as opposed to knowledge.

01:36:02.220 | So ultimately, I don't know, I've never encountered that.

01:36:05.620 | But I mean, as a practical matter, though, I think it'd be very difficult for any creditor

01:36:11.060 | to get at those assets if they don't come into an estate, if they've waited till the

01:36:15.700 | person dies.

01:36:17.060 | So as to the second question, should you leave something to pay those final expenses?

01:36:22.960 | I mean, every situation is different.

01:36:27.060 | I would probably say, yes, you should do that unless you've made some other kind of arrangement.

01:36:34.780 | Like if you've made a prepaid funeral, set up a prepaid funeral, unless you've maybe

01:36:40.460 | asked your if you have life insurance, you've asked your life insurance beneficiary to make

01:36:46.740 | sure that certain obligations were taken care of out of that life insurance money, you know,

01:36:52.860 | or maybe, yeah, have a have a joint account with a trusted person so that and have them

01:36:59.900 | use the the joint account funds to pay off certain expenses.

01:37:04.980 | So.

01:37:05.980 | Thank you.

01:37:06.980 | Yes, Steve.

01:37:07.980 | I was just curious if you had any recommended books on this subject.

01:37:16.780 | It's so complicated and it's kind of hard to get a big picture view.

01:37:20.340 | I almost feel like a flowchart would be super helpful or like this thing supersedes the

01:37:26.320 | next thing, supersedes the next thing.

01:37:28.300 | And like, I don't know, I just write myself like, well, I just found myself like looking

01:37:33.540 | on Amazon and I found like the top 10 estate planning books, but I was wondering if you

01:37:37.940 | had any recommendations.

01:37:38.940 | I don't.

01:37:39.940 | You know, to be honest, it's it's it's interesting.

01:37:42.060 | I have never the only book I've read about like a state and estate planning was the book.

01:37:50.060 | Well, I forget it was about the Johnson and Johnson estate contest in the New York County

01:37:57.180 | Surrogates Court with that that older fellow who married his much younger maid.

01:38:03.920 | So I and that was more of an entertainment type thing as opposed to the nitty gritty

01:38:08.120 | of the state.

01:38:09.120 | So I honestly I don't have a book recommendation.

01:38:12.940 | One thing you might consider is, you know, sometimes local libraries or a university

01:38:20.560 | or even a bar association or and like Schwab or Vanguard, they may have programs where

01:38:31.920 | they would maybe something like this or something, but where they would have written materials

01:38:39.160 | about estate planning, estate process.

01:38:41.840 | That might be something to to explore.

01:38:46.880 | Thank you.

01:38:47.880 | There is one thing about beneficiaries, Summerfield, and that is and this came up in the chat.

01:38:53.720 | Also, the power of attorney, a general power of attorney that that is created and it covers

01:39:00.680 | everything.

01:39:01.680 | You know, I mean, we have family members who have powers of attorney that are like twenty

01:39:06.120 | five pages long and it covers everything, every every aspect of your life, the power

01:39:11.720 | of attorney, the banks, the this, the that, the doctors, the everything.

01:39:16.640 | But really, when you go to when you have Vanguard, Chase Bank, Fidelity, Wells Fargo Bank, those

01:39:25.480 | institutions, the financial institutions want their own power of attorney because it specifically

01:39:32.480 | addresses what that institution does and they have your money and they have sometimes millions

01:39:40.800 | of dollars of your money and they want to make sure that the beneficiary, the power

01:39:47.360 | of attorney, everything is correct and accurate.

01:39:52.200 | And so they, for example, at Vanguard, we're at Vanguard.

01:39:55.960 | We used that.

01:39:56.960 | We made sure that we use their powers of power of attorney, which is called the full agent

01:40:04.200 | authority.

01:40:05.760 | And it is a little process to set it up.

01:40:08.400 | But once you set it up, it's at Vanguard there.

01:40:10.960 | You don't have to worry about bringing your own and, you know, emailing it to them or

01:40:15.560 | faxing it to them.

01:40:16.560 | And they're just not going.

01:40:17.560 | They may not accept it.

01:40:18.560 | First of all, I'm not going to it's just so thick.

01:40:21.240 | Sure.

01:40:22.240 | Sure.

01:40:23.240 | And we have on the forum posts where people go to Chase Bank, they go to Wells Fargo Bank

01:40:29.000 | with their power of attorney and it's worthless.

01:40:32.440 | It's not useful.

01:40:33.440 | Right.

01:40:34.440 | It doesn't work.

01:40:35.440 | Sure.

01:40:36.440 | Sure.

01:40:37.440 | Yeah.

01:40:38.440 | Now, I think the banks.

01:40:39.440 | Yeah, I mean, in New York, they recently changed the law where they've made it now where banks

01:40:45.240 | have to provide a specific reason for why they are rejecting a power of attorney.

01:40:51.400 | And if it turns out that that rejection is unreasonable, then banks can be liable for

01:40:58.440 | a limited amount of money damages for not honoring a power of attorney.

01:41:03.120 | And I think banks run a little bit of a risk when they when they do that, you know, just

01:41:08.960 | automatically reject the power of attorney.

01:41:11.940 | But yeah, nine times out of 10, they're going to get away with it.

01:41:14.800 | So it makes sense to be proactive and try to make sure that you have the power of attorney

01:41:21.400 | that the institution is going to honor ahead of time.

01:41:25.120 | So it makes it easier.

01:41:27.600 | Yeah.

01:41:28.600 | Yeah.

01:41:29.600 | Any other questions, chat raised hand?

01:41:33.800 | There's two related questions in the chat.

01:41:36.040 | One is from Mark saying, do you even need a will if all your assets have beneficiaries?

01:41:42.320 | And Uzma says, if I only have assets and accounts that have designated beneficiaries, I have

01:41:48.120 | no property, just an old car, nothing expensive in my home, do I need a trust?

01:41:54.240 | Will I have to go through probate for these meager assets?

01:41:58.520 | In terms of the trust, yeah, I would say probably not unless you have one of those scenarios

01:42:05.360 | where you have someone that you want to benefit who's disabled or if it has to go through

01:42:12.280 | the estate.

01:42:13.280 | If you have a situation where someone in your family may contest the will or you don't quite

01:42:19.080 | know your family tree, that kind of thing, which is going to complicate the probate process.

01:42:25.880 | And you never have to have a will.

01:42:30.240 | It's just, if you don't have a will, it's harder for your family, the person who's going

01:42:39.200 | to be handling your estate to function.

01:42:42.440 | And one example is if you have a will and you submit it to probate, and let's say you

01:42:49.040 | do have a problem with someone objecting to your will or you don't know where a family

01:42:56.120 | member is, you have to do a due diligence search and that draws out the process.

01:43:01.300 | You can still apply for what's called preliminary letters where the court will give you a preliminary

01:43:07.560 | appointment and allow you to marshal assets.

01:43:13.000 | Let's say the decedent has a portfolio that's in a risky stock and the stock is going down

01:43:21.360 | and you need to sell that stock before it just bottoms out.

01:43:25.140 | You can get the preliminary letters, sell the stock before it's plummeted, sell the

01:43:32.680 | home before it's foreclosed on.

01:43:35.740 | So having a will in those situations really saves the day, even though you have to wait

01:43:43.800 | time to ultimately finish the process of turning over the assets to the beneficiaries.

01:43:50.660 | Flip side, you don't do a will, you still have the assets that are tanking.

01:43:58.580 | You have a home that's in foreclosure.

01:44:01.100 | If you don't have a will and you submit in your application to be appointed as the estate

01:44:07.300 | administrator, it's going to take time and the court, because there's no will, they can't

01:44:13.180 | give you preliminary letters.

01:44:15.340 | They can't give you the advanced authority to sell assets to protect the estate.

01:44:21.700 | The chances of it happening are not that great, but there are scenarios where if you don't

01:44:26.780 | have a will, you're kind of stuck just waiting for the court process to go through, and meanwhile,

01:44:36.900 | the estate can lose value.

01:44:39.760 | So while you don't have to have a will, even if your assets are with beneficiary designations

01:44:49.260 | or you don't have a lot of assets, I'd recommend getting a will, even if it's a basic simple

01:44:55.500 | will, plus until you die, you never know exactly what's going to be in your estate.

01:45:02.020 | In theory, at the last minute, you could inherit a lot of money.

01:45:06.100 | You could be a victim of medical malpractice, or you could get hit by a FedEx truck where

01:45:10.900 | all of a sudden you have a big lawsuit.

01:45:12.760 | You never know at the end of the day how much money could be coming into your estate.

01:45:17.340 | And money that's from a lawsuit or something or an inheritance, it can't go into the trust

01:45:21.680 | you set up.

01:45:22.820 | It's going to have to come into your estate.

01:45:25.140 | So for that, better to just have a basic will in place.

01:45:30.180 | Thank you.

01:45:31.180 | Mark.

01:45:32.180 | Mark Seipan.

01:45:33.180 | Mark, you're on mute.

01:45:39.700 | Hi there.

01:45:43.220 | I think you just answered a lot of the questions I just had about wills and needing an actual

01:45:50.340 | trust in addition to the will.

01:45:52.740 | I know that Miriam, we're going to stay on a little after to discuss a primary residence

01:45:59.260 | in the state of Florida, which is homesteaded, and my understanding, avoids probate.

01:46:04.260 | The question we can discuss later, Miriam, I guess is, is a ladybird even necessary if

01:46:10.300 | you just have a will that designates where the home goes?

01:46:13.580 | And I know some of you, I know you can't really answer that being in New York, but my general

01:46:18.900 | question to you is, if you do establish a will, then a trust should be added if you

01:46:24.820 | feel there's a need for that.

01:46:26.500 | You just don't do a trust without a will, is that correct?

01:46:30.340 | Yeah, that's what, yes, and that's sort of the standard practice that I've seen in New

01:46:35.040 | York is, yeah, you always, I mean, you, some people do wills and don't do trust, but you

01:46:41.060 | never sort of do a trust and don't do a will.

01:46:44.900 | Yeah.

01:46:45.900 | Okay.

01:46:46.900 | Okay.

01:46:47.900 | Thank you so much.

01:46:48.900 | Sure.

01:46:49.900 | What do you say?

01:46:50.900 | You think we are?

01:46:51.900 | I actually have, so, Summerfield, this is phenomenal.

01:46:55.060 | We're very respectful of your time.

01:46:56.980 | If you have a few more minutes, I have two more questions and any closing comments.

01:47:02.420 | So midnight, midnight Pacific time.

01:47:08.460 | So one is throughout your comments, I think folks can gather some best practices, but

01:47:14.180 | I wanted to see in your, you know, years of experience, if you would elevate certain things

01:47:19.540 | that have been exceptionally helpful in the planning stages.

01:47:23.540 | So one example is a list of accounts, contacts, where things are located, you know, things

01:47:30.220 | like that.

01:47:31.220 | So that to me seems probably intuitive, but maybe a lot of people don't get to it.

01:47:35.580 | So if you have other things like that, that's one.

01:47:39.100 | And then what would you, what guidance would you offer folks who were procrastinating for

01:47:45.940 | whatever reason, started a will, didn't finish it.

01:47:48.740 | They feel overwhelmed.

01:47:50.060 | They keep putting it off.

01:47:52.500 | What do you say to folks like to simplify the process and have them move further?

01:47:58.500 | Right.

01:47:59.500 | Well, one thing that I think helps psychologically with that is to know that you can always change

01:48:07.020 | your will, and in fact, you probably will change your will at some point, but just to

01:48:12.980 | have something and particularly, and, you know, like if you have children that are minors,

01:48:21.740 | just the fact, just, if you just did a will that did nothing, but simply named the guardians,

01:48:28.260 | that would be incredibly meaningful because like, if you have kids and God forbid you

01:48:33.940 | and your spouse, assuming you have a spouse, both pass away while the kids are still minors,

01:48:40.840 | it's basically a free for all as to who's going to raise your children and who's going

01:48:45.100 | to have control over where they go to school, their medical care and their money.

01:48:49.140 | I mean, the court would, the court and hopefully your family would try to come to the best

01:48:54.460 | solution, but it's so much better if you can pick, pick the family member or the friend

01:49:02.660 | that you want to raise your children ahead of time and have that, have that, you know,

01:49:09.160 | set up and, and of course, and, you know, the next, the day after you sign your will,

01:49:13.980 | if you feel like you've made a mistake, you just call the attorney and say, you know,

01:49:18.180 | we need to change it.

01:49:19.180 | We need to do it differently.

01:49:20.660 | So maybe thinking a little bit less of all or nothing and more in terms of let's make

01:49:26.920 | things a little bit better than what they were, I think that can help overcome that,

01:49:31.980 | that procrastination makes sense.

01:49:34.500 | Something is better than nothing.

01:49:35.780 | Getting it started.

01:49:36.780 | Yeah.

01:49:37.780 | Yeah.

01:49:38.780 | Uh, finalizing a preliminary version and then making updates whenever you need to.

01:49:45.140 | Yes.

01:49:46.140 | And also, and it used to be, you know, they used to have codicils and yeah, like my mother

01:49:50.940 | had an aunt who had like 20 codicils to her will, and she was always leaving people out

01:49:57.060 | and you know, this kind of thing.

01:49:58.580 | Can you explain what a codicil is for folks who don't know?

01:50:01.520 | Yeah.

01:50:02.520 | Codicil is like a brief addendum to a will where you make a, well, I say brief, typically

01:50:09.420 | they're brief.

01:50:10.420 | They can be any length, but yeah, typically it's, it's just sort of like an amendment.

01:50:14.860 | Like people, we were talking earlier about, can you just write in a change to your will,

01:50:19.300 | hand write it on your will after you've signed your will?

01:50:22.300 | And the answer is no, but, but so what people have done over the years is they've done codicils,

01:50:28.220 | which are brief kind of mini wills as addendum to the main will.

01:50:34.980 | They're out of favor these days.

01:50:37.100 | And the reason is because if you do a codicil, it's a second will execution ceremony and

01:50:43.820 | you're republishing the first will as well.

01:50:47.940 | And so any objectant now to your will, they can attack either the codicil or the will

01:50:54.100 | itself and the witnesses, the will executions.

01:50:57.480 | So it's giving two, an additional opportunity to try and knock the will out.

01:51:04.020 | And in the days of word processing, it's so much simpler and easier just to, you know,

01:51:10.020 | type in the change on your will, print it out and sign again before witnesses, as opposed

01:51:15.260 | to doing the whole codicil business.

01:51:17.620 | So it's not, I mean, attorneys will charge for redoing a will, but it's not as much as

01:51:22.260 | for the first go round.

01:51:24.140 | So it's not that big a deal to, to update, change your will.

01:51:27.980 | So.

01:51:28.980 | Understood.

01:51:29.980 | And perhaps you could, you could couple it with a fun event the way you said ceremony.

01:51:33.540 | Sometimes people have a house painting party, get a bunch of friends, you get a few pizzas,

01:51:38.920 | you could have a codicil re-signing party or, you know, the new will party.

01:51:45.620 | Yeah.

01:51:46.620 | Yeah.

01:51:47.620 | Yeah.

01:51:48.620 | Definitely.

01:51:49.620 | So let's do one last round of questions.

01:51:51.860 | Alex, Alice, Carol, Lucas, Miriam, any raised hands in the audience before we sign off with

01:52:01.220 | Summer Fields?

01:52:02.220 | I saw one more in the chat.

01:52:03.220 | I'll sneak in.

01:52:04.220 | What happens if the survivors can't find the original will and only have a copy?

01:52:09.940 | If that's the case, well, this is a very good question.

01:52:14.580 | It, a copy can be used as a substitute, but it's easier to have a copy used as a substitute

01:52:23.100 | for the original.

01:52:24.580 | If the original wasn't held by the testator, the person who did their will, and the reason

01:52:31.300 | for that is there's a legal presumption that if a will is lost or destroyed while it's

01:52:36.580 | in the custody of the testator, there's a legal presumption that he or she intentionally

01:52:43.300 | revoked the will or tore it up intending to revoke its terms.

01:52:48.200 | So it's harder to have a copy admitted as the replacement than if you have the attorney

01:52:55.500 | or if a friend or a family member has the will and it gets lost or destroyed.

01:53:00.860 | So the short answer is, yes, you can have a substitute copy be probated, but it's more

01:53:07.420 | likely that's more likely to work if you're not holding on to your own original will.

01:53:14.220 | What if like there's a fire and it burns with your house?

01:53:17.460 | I mean, I suppose if you can document, well, yeah, I suppose, well, yeah, I mean, I suppose

01:53:23.940 | there are scenarios where, you know, the testator has their own own will and you can somehow

01:53:30.100 | there's proof that they didn't destroy it or whatever.

01:53:34.580 | But all things being equal, you're better off having someone else hold it regardless

01:53:41.200 | of how the destruction happens, so.

01:53:48.220 | We have a question, Gorrie, and Kyle, I'm going to try to ask your question.

01:53:56.140 | It would involve a corporate trustee, I would imagine Kyle's question is whether to use

01:54:03.980 | a corporate trustee for your trust versus a family member as a trustee.

01:54:10.620 | But I thought in a living trust or normally a regular trust, a revocable trust, the person

01:54:17.400 | making the trust would be the trustee.

01:54:20.940 | And then you have a co-trustee, which would be the corporation or your spouse or a child

01:54:27.820 | or a family member.

01:54:29.460 | Right, or successor trustee, usually a lot of times for trust, you name yourself.

01:54:36.380 | And then but if you're disabled or incapacitated or pass away, it's a family member or a corporate

01:54:43.260 | trustee.

01:54:44.880 | Corporate trustees can be good.

01:54:45.880 | I mean, in my experience, and you hear that they're generally only willing to take on

01:54:52.440 | a trust or an executive position if there's like a million dollars or something.

01:54:58.680 | But you know, typically you it's good if you can have a family member be an executive or

01:55:06.560 | trustee so they can benefit from the commission.

01:55:10.400 | And also they can always they can have control and they can hire attorneys, accountants,

01:55:17.400 | investment people to help.

01:55:19.620 | But certainly there are institutions that have served very well as executors, co-executors,

01:55:26.800 | trustees, co-trustees.

01:55:29.280 | So it's really just sort of a particular person's preference and where their loyalty, where

01:55:35.600 | they feel they'll get loyal service.

01:55:38.920 | The person answered and says on the corporate trustee, we have minor children.

01:55:46.280 | If we die, while they're minors, our family would take the children and be excellent family

01:55:53.160 | figures for them and parents for them.

01:55:55.960 | But they're not very money smart.

01:55:58.640 | They're very casual with money.

01:56:01.040 | So therefore, we are considering a corporate trustee to manage some form of trust for life

01:56:06.720 | insurance policies, as well as our other financial assets, and this would be for the minor children.

01:56:14.240 | Can you discuss the pros and cons of a corporate trustee in a scenario where they're being

01:56:20.520 | handling minor children?

01:56:22.560 | Right.

01:56:23.560 | Well, yeah, I would say the pros would be what you've described in terms of the corporate

01:56:32.160 | trustee having more savvy for financial management, investing, that kind of thing.

01:56:40.400 | And also there can be a benefit too in having an outsider hold the funds, the family funds,

01:56:48.960 | because sometimes if you have a family member hold the funds, it can affect the relationship

01:56:54.740 | between the young people and the individuals holding the money.

01:56:59.120 | There can be a tension there.

01:57:00.560 | Whereas if you have an outsider, you kind of can avoid some of that.

01:57:07.220 | The potential downside, it's not a huge thing, but the corporate trustee is entitled to fees,

01:57:18.040 | statutory fees.

01:57:19.920 | So to the extent that an outsider is getting the fees as opposed to a family or friend,

01:57:27.720 | that could be considered a disadvantage.

01:57:32.000 | The second thing, a potential disadvantage, and I think this goes to what we spoke of

01:57:38.400 | a little bit earlier in terms of having the right mindset for being an executor or being

01:57:44.360 | a fiduciary in terms of loyalty and service.

01:57:47.280 | I mean, you do hear about situations, see situations at times.

01:57:53.520 | If the money situation changes, if God forbid, a lot of the funds in the trust need to be

01:58:01.920 | spent for medical or something unforeseen, and the trust balance goes down, does an institutional

01:58:12.080 | trustee necessarily have the loyalty and attachment to stay with the trust in lean times?

01:58:22.120 | I mean, a family member or a friend may not have that stick-to-itiveness either, but that's

01:58:29.560 | just something to consider.

01:58:30.960 | And then aside, I remember reading an article years ago in the New York Times about a corporate

01:58:40.720 | trustee.

01:58:41.720 | Well, I think he was an attorney, might've been an accountant who handled the trust of

01:58:48.440 | a family when the parents had been killed, and he basically raised the children from

01:58:56.760 | the financial point of view.

01:58:59.240 | And the article pointed out that there are actual people, trustees, corporate trustees

01:59:04.720 | who specialize in that, or whose practice is geared towards children and also special

01:59:13.760 | needs, trusts, that sort of thing.

01:59:17.560 | So you might have to search around to find one, but I think they're around.

01:59:23.720 | Sure.

01:59:24.720 | Yeah.

01:59:25.720 | There are attorneys who will be guardians, be trustees for private trusts.

01:59:33.640 | You're not necessarily limited to either a big bank or a family member.

01:59:39.640 | Yeah.

01:59:40.640 | Summerfield, I noticed a question in the chat that I think is interesting.

01:59:46.440 | So we've evolved where electronic documents that are signed serve as bona fide legal documents,

01:59:54.680 | the equivalent of paper, original signatures.

01:59:57.480 | How does that apply to a will?

02:00:00.560 | Must a will be paper or is electronic valid?

02:00:04.000 | Yeah, that's an excellent question.

02:00:07.980 | To my knowledge, yeah, I've never heard about a contemporary will being done on anything

02:00:18.140 | but paper.

02:00:21.540 | I mean, I don't think the statute specifies paper, but I think as a practical matter,

02:00:29.420 | unless it's some kind of an emergency where you're literally sort of passing away or something,

02:00:35.120 | I don't think you would want to take that risk and be sort of the test case by doing

02:00:42.860 | an electronic thing.

02:00:45.020 | I think you'd want to, for no other reason either than just having your will go through

02:00:52.660 | in a timely and standard manner as opposed to the novelty of having the court try to

02:01:00.260 | figure out what you've done, kind of as an alternative.

02:01:05.700 | So I would encourage just going with the tried and true, but yeah, the way I know for notarization

02:01:12.900 | with COVID, they changed the rules on notarization.

02:01:16.780 | And I personally haven't done any of the remote video notarizing because the rules and regulations

02:01:23.820 | are so cumbersome and convoluted, it's just not worth it for me to try to figure it all

02:01:29.900 | out and deal with it.

02:01:31.980 | But as technology changes and stuff going forward, I guess we have to keep an eye on

02:01:37.180 | that.

02:01:38.180 | Right.

02:01:39.180 | It goes back to the written on the hide of a cow alternative.

02:01:48.020 | Yeah.

Bogleheads® Chapter Series – Estate Planning Basics – Setting Up Your Estate Plans