Bogleheads® on Investing Podcast 087: Jenny Rozelle, Elder Law & Estate Planning Attorney
00:00:00.000 | Welcome to the 87th edition of the Bogleheads on investing podcast. In this episode, we're going
00:00:12.100 | to talk about elder law and estate planning with questions sourced from the Bogleheads community,
00:00:16.980 | both from the forum and elsewhere on social media. Answering questions is attorney Jennifer
00:00:22.920 | Rozelle, elder law and estate planning specialist with her own podcast on the subject legal tea.
00:00:30.120 | I'll link to that in the show notes for listeners to check that out.
00:00:33.000 | Hello, everyone. My name is John Luskin, returning as co-host of the Bogleheads on investing podcast.
00:00:43.000 | For today's episode, we're going to dive deep into some of the nuances of elder law and estate law.
00:00:48.880 | If you're unfamiliar with estate planning, be sure to check out some of our previous episodes
00:00:53.800 | on the topic. There's Bogleheads on investing episode 58 with Ryan Barrett and Mike Piper.
00:01:00.880 | And there's also the Bogleheads live podcast episode 34 with Cameron Huddleston.
00:01:07.060 | This episode, as with all episodes, is brought to you by the John C. Bogle Center for Financial
00:01:12.300 | Literacy, a nonprofit organization that is building a world of well-informed, capable and empowered
00:01:18.440 | investors. Visit Boglecenter.net where you will find a treasure trove of information, including
00:01:24.400 | transcripts of these podcasts. And while there, you can make a donation to support the mission
00:01:29.740 | of financial literacy at Boglecenter.net slash donate. Lastly, we are just days away from
00:01:37.700 | the 2025 Bogleheads conference. This year's conference will be at noontime Friday, October
00:01:43.600 | 17th through noontime on Sunday, October 19th. We will be at the Hyatt Regency San Antonio Riverwalk
00:01:50.940 | Hotel. You can find a list of speakers, the agenda and register for this year's conference
00:01:57.060 | at Boglecenter.net slash 2025 conference. Lastly, a disclaimer, the following is for informational
00:02:05.420 | and entertainment purposes only. It should not be relied upon as a basis for tax investment or legal
00:02:11.600 | advice. And now the 87th episode of the Bogleheads on Investing podcast with Jenny Rozelle.
00:02:18.380 | Jenny, welcome to the Bogleheads on Investing podcast.
00:02:24.860 | Thank you, John. I'm so excited to be here. Hopefully we can keep time under control and
00:02:30.580 | not talk for five hours.
00:02:32.180 | Yep, absolutely. Now, Jenny, we've had an episode before on estate planning, but you also specialize
00:02:38.800 | in elder law. Tell us a little bit about the distinction between elder law and estate planning.
00:02:43.540 | That's one of my favorite questions. The way I describe it is estate planning is
00:02:48.360 | typically what most people think it is. It's wills, it's trusts, it's powers of attorney,
00:02:55.320 | it's health care directives, the very standard estate documents that help people in case of
00:03:03.340 | incapacity or death. What elder law brings into the conversation is helping people navigate
00:03:10.840 | much more intentionally issues that they may have to navigate as they age. Often, it's really two things.
00:03:20.460 | It's one, either, hey, is there any way that I can structure my assets, structure my estate plan
00:03:29.320 | to protect my assets against long-term care? So really helping people navigate what those options are,
00:03:36.520 | Medicaid specifically. And then the second thing elder law attorneys often do are helping people
00:03:43.980 | navigate whether a guardianship process is appropriate. And that's really when people are
00:03:49.740 | oftentimes starting to deal with cognitive impairment, maybe early signs and trying to figure out like,
00:03:56.260 | are we to that level of needing a guardianship, especially if they don't have any estate documents
00:04:01.940 | in place. So if you think of elder law as a way of like, it's very estate planning-esque,
00:04:07.380 | but it's bringing in this whole intentional perspective of we're navigating this process with our eyes on,
00:04:17.000 | okay, what happens if we do become incapacitated? And or what happens if we do need long-term care,
00:04:25.160 | and we don't have, say, long-term care insurance. So that's the best way I always explain elder laws.
00:04:31.060 | It really just brings in just this different perspective into the estate planning process.
00:04:37.560 | We got a lot of great questions beforehand from the Bogleheads community. So thank you to everyone
00:04:42.580 | who did submit those questions ahead of time. One really popular topic was solo agers. Had folks
00:04:48.980 | across different platforms asked about this very issue. Tell us, what's some guidance that you're
00:04:54.580 | giving for folks that are concerned about being a solo ager in retirement? Well, first of all,
00:05:00.460 | I always appreciate this question because I can relate to this question. It's just my husband and I,
00:05:06.880 | we don't have kids. And so as one of the people that submitted this question said, you know, a lot of
00:05:14.320 | these kind of informational things about estate planning, it starts talking about your spouse and
00:05:19.820 | your kids. And it's kind of this very stereotypical setup of a family. So I can really relate to people
00:05:26.040 | asking this question. And what I can say from an estate planning perspective is, first and foremost,
00:05:33.020 | when you think of kind of the different roles within an estate plan, whether it's a power of attorney,
00:05:39.500 | healthcare decision maker, executor, trustee, what I would say first and foremost is none of those
00:05:46.100 | have to be filled with family. Or even if we do have family, doesn't, if we don't have, you know,
00:05:52.860 | kind of these standard people like kids to put in these roles, it can be extended family, it can be
00:05:59.480 | nieces, nephews, cousins, second cousins. But if we don't have those kind of people in our lives,
00:06:06.760 | and or maybe we don't want to put those people in these roles. I always start with human beings that
00:06:15.120 | we that we know personally. So whether that be friends, or friends as kids is always a great
00:06:22.660 | option as well. If we still are striking out, that's often when people are possibly considering
00:06:30.900 | professionals to serve in these roles. Whether it be attorneys, accountants, banks, corporate
00:06:37.960 | fiduciaries, but those come typically with a higher price tag. And then another thing I wanted to mention
00:06:44.020 | on this topic is, there are some and I think there was another question sort of related to this, there are
00:06:50.940 | some law firms out there that have something called a life care planning component to them. You'll find
00:07:00.620 | that type of field often in conjunction with a law firm that does elder law work. But life care planning
00:07:09.020 | is really a, I'm going to call it like a more holistic way of doing estate planning because it,
00:07:15.800 | there's typically someone on staff at the law firm that either has a nursing background or a social
00:07:21.880 | work background that can really help step into people's lives in a much more personal and proactive
00:07:29.720 | manner than like your traditional way of thinking about law firms and estate planning. Does that make sense?
00:07:36.760 | Absolutely. I know that here in California, we have a thing called a professional fiduciary and I know
00:07:41.160 | that varies state by state. So maybe you could talk about what that's called in your state and how that
00:07:45.400 | works.
00:07:46.440 | Yeah. So a professional fiduciary is a, that's kind of what I was talking about.
00:07:50.920 | Oftentimes professionals will serve in some of these
00:07:55.240 | roles like power of attorney, executor, trustee. Very few of them will serve in a health care capacity.
00:08:02.840 | They tend to serve more like the financial and legal roles.
00:08:07.880 | But basically what that fancy F word is fiduciary is they have to be working in your best interest.
00:08:13.640 | And so in your best interest and, uh, depending on the plan and what roles they're in and the best
00:08:18.680 | interests of your beneficiaries. And so I kind of look at, you know, when you analyze these different
00:08:23.800 | options as sort of like a tiered approach, like I always start with, let's look at family and friends
00:08:28.920 | first. If we strike out, try professional second, because they're going to be more affordable than
00:08:37.400 | picking say like a bank or a financial institution, which is my third tier of like, if we're like,
00:08:43.000 | I can't find anyone around me that is willing to serve like in that professional fiduciary role,
00:08:49.480 | that third tier is really kind of the, the banks, the financial institutions that, um,
00:08:55.560 | they often charge a pretty significant amount to serve in those roles. And so a lot of the folks
00:09:00.280 | that I serve, a lot of my, you know, very traditional clients don't really want to entertain that third
00:09:05.560 | tier, the banks, financial institutions, or maybe they can't because sometimes those banks and financial
00:09:10.840 | institutions have a minimum threshold in which they cannot reach. And for folks looking at tiers two and
00:09:18.600 | three, since they might not have friends or family who are able to serve in that role, what sort of
00:09:22.600 | consideration should they have in selecting those sorts of professionals?
00:09:26.760 | I'd be remiss if I didn't start with cost. Um, cost is, is a really, really heavy factor. Uh, when you
00:09:34.280 | start looking into that land, I have found in that tier two, like when we're talking about professionals
00:09:40.680 | serving in these roles, a lot of times they will serve, uh, in like an hourly standpoint. So a very
00:09:47.960 | traditional billing way, like they will serve in those roles in an hourly billing manner. Then when
00:09:54.680 | you get into tier three, when you're talking about bank banks and financial institutions, oftentimes they
00:10:00.120 | charge a percentage of the assets as their fee. Now, keep in mind, they also tend to pull those accounts
00:10:08.840 | under their umbrella. So not only are they making a fee serving in these roles, they also are typically
00:10:16.440 | making a fee, uh, for managing like the investment side. So you're kind of getting hit twice in, in that
00:10:22.280 | land. So cost is definitely a factor. And then I would say from a standpoint of, I've worked on cases where I've
00:10:30.760 | seen clients put banks and financial institutions or even professionals in some of these roles and maybe
00:10:39.560 | the professional is retired or maybe they have passed away or maybe the bank has gone under or, you know,
00:10:46.600 | sold or purchased to another bank. Um, so another factor is longevity. I would probably discourage someone
00:10:54.360 | from, you know, possibly appointing someone, maybe that's an 80 year old attorney in this role. So
00:11:00.840 | there's some more logistical factors there as well. Um, and then beyond that, I think it's more of maybe
00:11:07.080 | the human feel of making sure you meet with the folks that would be serving in these roles. And if you feel
00:11:12.760 | like they would jive well with the people that, you know, your beneficiaries down the road, if you feel
00:11:18.120 | confident in their, um, more of their personality, more than anything, um, as probably another factor
00:11:26.120 | I would, I would mention. Now you mentioned costs when making that decision and as vocal heads, we're
00:11:31.560 | a frugal group. So I'm sure we can all certainly appreciate that comment, but that frugality also applies
00:11:38.280 | to investing as well. So I can't help, but wonder, is that something that can be either filtered for
00:11:45.560 | or put in a request? And that's to say, Hey, I'm going to have this person manage my money. Maybe even
00:11:50.120 | they'll manage it for 1%. Can I make sure that the person who's managing it, at least they'll be using
00:11:55.240 | low cost index funds. Yeah. I mean, you can, you can put those kind of more specific wishes in your
00:12:02.600 | estate plan. Um, my fear would be that them serving as executor or trustee down the road,
00:12:10.200 | whether or not that they would take that on, they can decline. I have had situations I've had clients
00:12:16.680 | where they've put like a bank or whoever in this role. And, you know, they look at the instructions
00:12:23.480 | that they've been given and they're like, I don't want any part of this. I'm not, I'm not going to accept
00:12:28.360 | appointment as your executor or as your trustee, I'm just going to decline. And so, yeah, you can
00:12:35.080 | absolutely put those kinds of instructions in your estate plan. But from a proactive standpoint,
00:12:41.960 | I would ask that person or entity that you're appointing, what their thoughts are in regards
00:12:47.320 | to it, because it's possible that they say, we may not take this appointment on if you put that in there.
00:12:53.400 | So it sounds like while you're doing your search for a professional fiduciary, maybe find someone who
00:12:58.040 | adheres to that low cost index fund investing strategy. Any other estate planning tips for solo
00:13:03.400 | agers? Really look at the estate planning process as a relationship and not a transaction, especially as you
00:13:11.800 | age. And you don't have this like natural support system around you. It will it will behoove you to
00:13:20.920 | really lean on the professional team around you, whether it's your financial planner, whether it's your
00:13:27.800 | accountant and or attorney, that professional team around you will absolutely be instrumental in aging.
00:13:34.680 | Absolutely. I couldn't possibly agree more. I always tell folks that financial planning is an ongoing
00:13:40.520 | process. And it's the same for estate planning, you want to review your plan on an ongoing basis.
00:13:46.600 | The next topic that also got a ton of questions was Medicaid. Tell us what folks need to be thinking
00:13:52.680 | about when it comes to Medicaid planning. Yeah, Medicaid, I'm not surprised there are a lot of
00:13:57.400 | questions. I'm not surprised because it is so confusing. Medicaid is so confusing. But I think Medicaid,
00:14:04.920 | first and foremost gets really confused with Medicare. And I have jokingly said for a long time that I wish
00:14:12.040 | they would just change the names, it would really help me if they would change the names, because
00:14:17.320 | they're not even close to the same. They're not the same at all. Medicare is a essentially a federal health
00:14:25.160 | insurance program. Medicaid has lots of different umbrellas underneath that special needs individuals,
00:14:32.600 | special needs families have to navigate Medicaid. Sometimes people like me help people navigate
00:14:38.120 | Medicaid for down the road navigating long term care and home health care. So Medicaid in from the purpose
00:14:46.200 | of this conversation is a benefit that will help people pay for home health care, and or long term
00:14:55.800 | care, whether it's assisted living or skilled nursing nursing home. So that's what I wanted to start with
00:15:02.840 | the difference between Medicare and Medicaid. One huge misconception is that people think that Medicare
00:15:11.160 | will pay for long term care, it will not Medicare will cover for a max of like 100 days and like a rehabilitation
00:15:19.560 | setting. But you're also not even guaranteed that 100 days, they can rip that rug from out from under you. Medicaid is
00:15:26.520 | the payment source that really is used to actually pay for skilled nursing assisted living home health care. A lot of
00:15:35.480 | people are concerned about how they're going to pay for long term care in the future. That's a huge concern.
00:15:44.040 | And what I always tell people is there's really three ways you're going to pay for long term care.
00:15:51.160 | One, long term care insurance, or if people are anything like most of my clients, most of my clients don't
00:15:57.960 | get long term care insurance, whether it's because of the cost, or whether it's because of they just can't
00:16:04.440 | qualify, it's really difficult to medically qualified for it. So from there, then we only have two options.
00:16:09.640 | You either self fund, self pay or private pay, all of those mean the same thing, private pay for any kind
00:16:18.520 | of long term care in the future, or Medicaid is the third payment source. A lot of people will come to
00:16:27.240 | someone like me to say like, okay, I don't have long term care insurance. What are my options for
00:16:33.560 | protecting my assets against future long term care costs. What that is code for is instead of you private
00:16:41.400 | paying, Medicaid is footing the bill. That's the difference. And so that's how Medicaid enters into
00:16:49.720 | these this whole conversation is when you're talking about long term care in the future. If we don't have
00:16:57.800 | long term care insurance or choose not to get it, then we have to analyze, okay, are we wanting to not do
00:17:05.880 | any pre planning, just self fund in the future? Or are we going to do some pre planning and try to get
00:17:14.040 | qualified for Medicaid in the future to have them pay? All right. So let's talk about that a little
00:17:19.400 | bit more. We had certainly some questions about what are the Medicaid planning opportunities for the
00:17:25.240 | wealthy? Should we put a Medicaid asset protection trust into play? What I always tell people when it
00:17:31.320 | comes to whether an asset protection trust for Medicaid makes sense is it just depends on the person's
00:17:37.640 | goals. I've helped clients who have less than a million dollars do an asset protection trust
00:17:44.280 | to protect what they have against long term care costs. I have people that have multiple millions
00:17:51.080 | of dollars that have done this kind of trust. I try not to anchor to like what value of an estate
00:17:59.480 | this makes sense. What I go to is there's the three different ways to pay for long term care.
00:18:06.280 | Now, we need to talk about if you're okay with self funding and private pay, then this becomes a
00:18:14.280 | relative, relatively non issue, right? But if people are like, well, I'm interested, tell me more what
00:18:21.240 | options are out there. Really, what ends up happening with an asset protection trust for Medicaid, it's an
00:18:28.040 | irrevocable trust that assets go into every state has what's called a look back period. Most states are
00:18:39.560 | five years if that thing is set up five years in advance and assets are in it five years in advance of
00:18:45.640 | any kind of Medicaid need. Then if you go into a long term care community, then Medicaid is footing the
00:18:54.040 | bill not you private paying. So I know there's a little bit of a long winded answer in terms of like
00:19:00.120 | what kind of makes sense from like an estate value standpoint. But to me, it doesn't matter the value
00:19:06.840 | of the estate, it matters whether you care about self funding and private paying or not, because I have
00:19:14.040 | clients that fall on both sides. And I, I'd be remiss if I didn't touch on there are some people that feel
00:19:21.480 | that this kind of strategy of using an asset protection trust to protect assets against
00:19:28.440 | Medicaid long term care is quote, unethical, or quote, immoral. What I always tell people is they are
00:19:37.400 | perfectly legal, allowable options on the table. And so that's why I really hesitate giving like a number
00:19:45.560 | because it's I have clients that fall all over the board. And from there, it just really depends on
00:19:50.040 | whether they care about, you know, possibly in the future, if long term care becomes an issue,
00:19:54.920 | whether you spend a lot of your money on long term care. That's the big, big thing is that
00:20:01.240 | to speak a little bit about your unethical and a moral comment. I can't help but think about
00:20:08.040 | the same thing we're going to see in tax planning. There are income phase outs for Roth IRA contributions,
00:20:14.360 | for example, law says, hey, if you make too much money, you can't put money into this account that's
00:20:19.080 | going to have your contributions grow tax free. But there is a backdoor Roth IRA contribution that
00:20:25.240 | lets you get around that. Is it unethical or a moral to use that strategy? Most advisors would argue
00:20:32.440 | probably not. Yeah, I'm so glad you brought that up because I don't care what they pick. My job is to
00:20:39.000 | say, here are your options on the table. From there, as long as I've done a good job of explaining what
00:20:45.320 | those options are, the pros and cons from there, that's their decision, not mine. I have no benefit
00:20:50.040 | either way. But I really, it really does, you know, frustrate me when I do hear those comments.
00:20:58.600 | And I hear them from people that, you know, are perfectly fine and content with doing also
00:21:05.080 | irrevocable trusts for avoiding taxes, for protection against creditors. It's just, it's just
00:21:13.000 | different people, different goals, different priorities. Why are we saying like, that's okay,
00:21:17.480 | but this isn't. They're all perfectly allowable strategies that people have the option to pick from.
00:21:24.680 | Something else I always tell people is that, you know, these trusts are done from a place of like,
00:21:29.720 | like pre-planning, proactive. And so many people don't do them because they don't have enough time
00:21:37.080 | to work with or they don't even know that these kinds of options are out there. And so I promise you,
00:21:42.280 | Medicaid and long-term care win more than people that have taken the initiative to do pre-planning
00:21:51.080 | strategies. I promise there are more people that don't do it than that people that do without a
00:21:57.480 | doubt. There's been some big tax law changes under the one big beautiful bill act. Does this impact
00:22:03.800 | the Medicaid planning in any way? What I've told a lot of people is at the end of the day, Medicaid
00:22:09.800 | planning and doing these kinds of trusts are simply to put an option on the table for your family down the
00:22:15.080 | road. So let's say we have a family that has done this asset protection trust. They get down the road.
00:22:22.040 | It's been, I don't know, 10 years and time for them to go into some sort of long-term care setting.
00:22:28.680 | And maybe the kids are like, you know what, the communities around us, we really want them to
00:22:33.400 | go to this other one that they don't even accept Medicaid. Just because you have an asset protection
00:22:39.640 | trust doesn't mean you have to go on Medicaid. Just putting an option on the table for you down
00:22:45.400 | the road. A lot of the Medicaid changes aren't even coming for another couple years. And so to sit here
00:22:52.600 | and try to say, well, here are the specific things that are going to happen would be merely guessing.
00:22:59.080 | And so what I've been telling people is we just have to see once the changes actually take place,
00:23:04.600 | see what the effects are and pivot. I can't tell you how many times that I, as an elder law attorney,
00:23:10.920 | have had to pivot because of Medicaid changes. And so it would just be another pivot and, you know,
00:23:16.600 | doing asset protection trusts for the future merely puts Medicaid as an option. That's it.
00:23:23.160 | And once again, that's why you always want to review your plan on an ongoing basis.
00:23:28.520 | Yes. Yes. All right. Here are some more questions about Medicaid planning. Does it matter if someone
00:23:35.960 | is single versus married? Yes. Huge. Excellent question. Medicaid is technically a federal program,
00:23:44.920 | but every state has sort of interpreted those federal programs rules differently. John, you're in
00:23:52.440 | California. I'm in Indiana. Our cost of living vastly different, right? And so Medicaid has different
00:24:00.040 | rules for every state. And I think this is why there are so many questions about Medicaid because
00:24:06.200 | not only are there different rules for every state, but if I take my state, for example, in Indiana,
00:24:12.120 | which I would venture to say, darn near every state, if not all of them have one set of rules for single
00:24:18.120 | individuals and a totally different set of rules for married couples. The why that they're different
00:24:25.080 | is because there's someone else involved. So maybe let's put a bow on this section
00:24:30.200 | on Medicaid planning. How should folks decide if this is a strategy they should pursue for themselves?
00:24:37.000 | Work with an elder law attorney. A general estate planning attorney is not going to
00:24:44.040 | have the knowledge, experience at helping you navigate whether Medicaid is a process, is appropriate
00:24:53.560 | as part of your estate plan. That's not their world. And how I explained the difference between
00:24:59.240 | estate and elder law, that is 100% an elder law attorney's world, is helping people navigate that
00:25:05.240 | million dollar question of whether or not it makes sense to do asset protection against long-term care,
00:25:13.000 | whether it makes sense to go down a Medicaid process. There's an organization, it's a national
00:25:17.880 | organization. It's called National Association of Elder Law Attorneys. It's commonly informally called
00:25:26.200 | NALA, N-A-E-L-A. They have a fantastic directory on their website. If someone is looking for an elder law
00:25:34.440 | attorney in their neck of the woods, they can go to that directory, plug in their zip code and find some
00:25:41.640 | nearby attorneys that do elder law work. That would be absolutely what I would start with, is making sure
00:25:48.120 | you are working with an attorney that does elder law. So as a financial planner, a lot of folks come to me
00:25:54.520 | and they want to talk about investing in taxes. And for the most part, there's some work you can do there to
00:26:00.120 | make some improvements. But the really big projects that most folks miss is going to be insurance and
00:26:05.800 | estate planning, not having enough or the right types of documents. What are common mistakes you see folks
00:26:12.200 | making as an elder law and estate attorney? Two things that come to mind. One, improper,
00:26:19.720 | inappropriate beneficiary designations. I could probably scare everyone with stories and things I've worked on where
00:26:29.320 | their beneficiary designations have been outdated or whatever. So I've seen large chunks of change go to
00:26:38.360 | ex-spouses. I've seen large chunks of change go to parents over kids, all because a lot of people don't
00:26:47.400 | realize that beneficiary designations trump what your estate plan says. And so a lot of people will think
00:26:53.480 | that, oh, I did my will, I did my trust, whatever. It like throws magic pixie dust on everything and just
00:26:59.880 | turns everything perfect. No, that's not the case. So one is beneficiary designations and really making
00:27:06.120 | sure that you are having those beneficiary designations play nicely with your estate plan.
00:27:12.920 | They should very much like work in tandem, not against each other, because when they go against each
00:27:18.680 | other, it's the beneficiary designation that wins. So that's the first thing. The second thing I would say
00:27:23.480 | is one of my big bugaboos about general statements about estate planning is, do I need a will? Do I
00:27:30.360 | need a trust? And it just depends. It just depends on your family dynamics, your family setup, your
00:27:39.720 | goals, what you're trying to accomplish, your assets, the types, the values. I always say that
00:27:48.200 | not everyone needs a trust. And a lot of people benefit from trust, too. That's probably the
00:27:55.080 | second thing that really came to mind is how many people out there that either don't have an estate
00:27:59.400 | plan at all, or have an estate plan that maybe isn't appropriate for what they're trying to accomplish.
00:28:06.200 | Maybe they would have been just fine with the will, but they spent all these thousands of dollars on a
00:28:10.600 | trust. So making sure an estate plan is appropriate for your fact pattern, that is crucial.
00:28:18.200 | Let's jump to some questions we got about asset and trust titling. We certainly got a lot in this area.
00:28:25.560 | And I know not too long ago, you did a great episode on your own show about the pitfalls of using a transfer on
00:28:34.280 | debt designation as opposed to putting an asset in a trust. So can you tell us a little bit more
00:28:40.200 | about your thoughts on leaving assets in a trust versus not, versus simply relying on a will, etc.?
00:28:46.440 | Beneficiary designations versus a trust, it's kind of a big question. And what I mean by this is a lot
00:28:55.000 | of times people will put like beneficiary designations on everything from their house, to their cars, to
00:29:01.560 | their bank accounts, to their brokerage, to the everything. And that's fine. That's a great way
00:29:07.480 | to make sure that we keep things out of probate. That's why they do that. But I've been doing this for
00:29:15.240 | about 15 years now. And I've just seen so many situations and that beneficiary designations like
00:29:24.200 | that have gone wrong. So I feel like that doing that kind of operation beneficiary designation like
00:29:33.160 | everything really only works like super, super well when there's like one beneficiary. It should work just
00:29:42.600 | fine and dandy for that kind of situation. But if we have more than one beneficiary, if we have anything
00:29:51.640 | unique assets like that, or we if we have any like very specific wishes and like how that beneficiary
00:29:57.400 | inherits, like maybe we want to stretch their inheritance out a few years because they're not
00:30:03.400 | the world's best with money. Or maybe we have a beneficiary that has an addiction, you know, something like
00:30:09.960 | that going on. I've seen where say a house has gone to two kids, the two kids couldn't agree to what
00:30:19.560 | happened at the house with the house after their parent passed away. They went into World War Three,
00:30:25.800 | spent way more money on lawyers than had they just done a trust plan and put one person in charge.
00:30:32.040 | I think it just emphasizes how important it is to not be so laser focused with one thing like I'm going to
00:30:40.520 | put beneficiaries on everything to avoid probate. Not be so laser focused on one thing and forget the risks
00:30:48.440 | or maybe the cons that come with that one thing. I've just seen a lot, a lot of things go wrong.
00:30:56.040 | So I'd caution people before they just beneficiary designate everything to make sure that that is
00:31:01.640 | truly what is appropriate for them. And jumping back to the solo agers topic, does using a trust
00:31:08.840 | still make sense then because you're going to have that fiduciary as a successor trustee managing trust
00:31:14.120 | assets? Or is the power of attorney given to that fiduciary going to be sufficient in that sort of
00:31:20.200 | scenario? I mean, a power of attorney will be while that person is living and the, the individual that,
00:31:26.040 | that would give the individual the authority to step in and help, um, navigate legal and financial
00:31:31.480 | decisions. I worked on a case, uh, several years ago. It was a solo wager. It was an elder orphan.
00:31:37.080 | She had lost her husband. Her husband had pre-deceased her. They had one child. She had pre-deceased her,
00:31:43.960 | um, had extended family, but very estranged from them. She appointed me as her executor and she left
00:31:51.800 | everything, um, to five different charitable organizations. Um, so I was her executor and
00:31:59.720 | basically everything just flowed through her. Well, I got through the probate process. Ultimately,
00:32:05.640 | things went to those five organizations. Um, I can't imagine putting those five organizations on
00:32:12.760 | all of her assets. Like, I mean, she had a house. What are you going to do? A transfer on death deed
00:32:16.600 | and name five charitable organizations on the transfer on death. Like it just, it just depends on who they
00:32:24.200 | want ultimately to get things. And what is the way that makes sense given efficiency, given cost, given
00:32:32.200 | who's in charge, like all of that makes it are different factors that someone should analyze.
00:32:38.360 | Yeah. I think about a solo ager with cognitive impairment, right? So they're still alive,
00:32:44.120 | but someone has to manage their money for them. Um, is there any sort of benefit to a successor trustee
00:32:51.080 | managing their money inside a trust or is a power of attorney going to be sufficient in that situation?
00:32:56.360 | A power of attorney should be sufficient. Um, I will try not to go on this soapbox. It,
00:33:01.080 | they, it should be sufficient, but what I can tell you, practically speaking, um, a lot of financial
00:33:07.880 | institutions, a lot of banks just get really weird and really finicky about power of attorney documents.
00:33:14.280 | Interestingly, a lot of those same banks and financial institutions, they react better to a successor
00:33:21.640 | trustee. I truly do believe having like a basic estate plan with like power of attorney and a will
00:33:28.680 | is sufficient. And sometimes trust, generally speaking, afford us more benefits than are available
00:33:39.960 | with a power of attorney and a will. And that's a, that's one example is that so many banks and financial
00:33:47.320 | institutions, it's like common sense just goes out the window when they are looking at a power
00:33:53.240 | of attorney. And interestingly, you don't face those same issues when you are serving as a successor
00:34:02.120 | trustee. And I'll link to that great episode that you did on your show about trust titling versus
00:34:07.400 | simply using a will. Folks can check that out in the show notes. Let me ask you a unrelated question.
00:34:13.960 | A lot of time I'll work with folks who get equity compensation from their employer,
00:34:18.280 | be it restricted stock units, et cetera. And that is going to vest. They're going to be able to use
00:34:23.560 | the full value of that in an account usually held elsewhere from where they're holding all their other
00:34:30.040 | IRA accounts, family trust, et cetera. And usually that account is going to be titled to their own name
00:34:37.400 | directly. It's going to be an individual account. If someone wants to keep that equity compensation,
00:34:43.640 | not sell it for diversification purposes, would it make sense to then transfer it from wherever it
00:34:49.160 | invests into their revocable living trust account they have elsewhere?
00:34:52.840 | Yeah. If they cannot put a beneficiary on it, then a nice alternative that we've done is we just do an
00:35:02.680 | assignment of that into their trust. And so that's the paper trail needed to show that, hey, it's we are
00:35:11.240 | assigning their interest, their ownership in this thing to their trust, which not only expresses their intention,
00:35:18.600 | but it's the literal paper trail that's needed to connect the dots between that, the equity
00:35:24.520 | compensation into the trust. Here's an interesting question from Mike Piper, who asks about how someone
00:35:31.320 | should get rid of a timeshare that you don't necessarily want to leave to your heirs.
00:35:35.320 | Oh, my goodness. First of all, hi, Mike. Second of all, my goodness, timeshares are a really big
00:35:44.040 | thorn in my side. Because so often clients, beneficiaries or kids often do not want them.
00:35:52.680 | Typically, what I see is that the clients know that and sometimes the clients don't even want them,
00:35:57.240 | but they're they're stuck with them. The difficult thing about timeshares is every timeshare company
00:36:02.040 | is a little different in how they handle things. But I have helped people, beneficiaries, kids,
00:36:08.840 | disclaim their interest in a timeshare. Otherwise, you have to just sometimes go through the really
00:36:15.960 | not fun rigmarole of saying like, hey, timeshare company, we just, we don't want this. Like,
00:36:22.600 | can you just take it back? Oftentimes, that's the executor or trustee's job. If there's no named
00:36:29.160 | beneficiary on the timeshare itself, the executor or trustee is tasked with navigating what to do with it.
00:36:37.080 | And it becomes even more difficult when no one wants it. So a lot of times beneficiaries will end up
00:36:44.040 | disclaiming it. Anything else you'd like to share about finding the right sort of estate attorney?
00:36:49.560 | We definitely touched on kind of the difference between estate and elder law. I think if elder law
00:36:55.000 | and you know, the whole concept of like protecting assets against long term care, if that's a goal of
00:37:00.840 | yours, absolutely critical, you work with an elder law attorney. Otherwise, if you're like, no, you know,
00:37:07.960 | I've saved enough, I don't really have that concern or that goal of protecting assets against long term
00:37:12.920 | care, then an estate planning attorney will be totally sufficient to help. The only other thing I wanted
00:37:18.840 | to mention is elder law attorneys are also very well versed in navigating special needs planning. So like
00:37:27.080 | I mentioned before, if we're working with disabled or special needs beneficiaries, we really need to
00:37:35.800 | leave them inheritances in a very specific intentional way so that they're not disqualified from any of
00:37:44.280 | their governmental benefits that they're on. Elder law attorneys are very used to navigating that whole
00:37:49.800 | world. So that would be another reason if you do have, you know, a disabled or special needs individual
00:37:56.120 | in your life that you need to account for in your estate plan, I would definitely lean towards working
00:38:00.600 | with an elder law attorney. Thank you, Jenny. Well, we had way more questions than we had time for.
00:38:07.800 | So thank you for all your time today. I appreciate it. So if you submitted a question to Jenny, but didn't
00:38:13.240 | get it answered, then you may have your chance to ask her at this year's BocaLeds Conference, because Jenny,
00:38:19.080 | we'll have you once again presenting this year. Yeah. And I think the only appropriate response is
00:38:25.240 | yee-haw, because isn't it in Texas? That's right. San Antonio this year, Hyatt Regency on the Riverwalk,
00:38:33.800 | October 17th through 19th, bogelcenter.net/2025conference to join us there this year. That's where you can
00:38:42.040 | register. Jenny, thank you again for joining us. I can't wait to see you at the conference. Anything else you
00:38:47.640 | want to leave us with before we let you go? I don't think so. Thank you so much for having me on.
00:38:53.800 | I'm looking forward to San Antonio. I've never been to San Antonio. So be able to cross another
00:38:58.920 | city off the list. So looking forward to it. And it was such a pleasure chatting with you.
00:39:02.760 | Wonderful. Appreciate the opportunity. And I'll see you soon. Yay! Yay, yay, yay.
00:39:09.080 | Thank you for listening to the 87th Bogleheads On Investing Podcast. Rick Ferry returns next month
00:39:22.360 | for the 88th episode. In the meantime, visit bogelcenter.net, bogelheads.org,
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00:40:00.920 | transcription software, editing software, podcast hosting, and more. You can show your support by
00:40:06.760 | making a tax-deductible donation at bogelcenter.net/donate. Thank you for listening. I look forward to
00:40:13.800 | seeing many of you at the conference in just a few days. Have a great one.
00:40:29.720 | Thank you.
00:40:30.720 | you
00:40:31.220 | you
00:40:31.720 | you
00:40:32.220 | you
00:40:32.720 | Thank you.