Money Matters

Taking Control: A Comprehensive Guide to Estate Planning and Asset Protection with Jerry Linebaugh

September 13, 2023 Brought to you by Neighbors Federal Credit Union Episode 39
Taking Control: A Comprehensive Guide to Estate Planning and Asset Protection with Jerry Linebaugh
Money Matters
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Money Matters
Taking Control: A Comprehensive Guide to Estate Planning and Asset Protection with Jerry Linebaugh
Sep 13, 2023 Episode 39
Brought to you by Neighbors Federal Credit Union

Guest:
Jerry Linebaugh
Founder, CEO, Financial Advisor and Fiduciary
Game Changer Wealth

Ever wondered how you can retain absolute control over your assets, both in life and beyond? Well, you're in the right place. We welcome back our astute guest, Jerry Linebaugh, a guru in wealth management, to unravel this mystery. Jerry expertly illuminates the often-overlooked significance of having a power of attorney to prevent costly blunders and keep your assets in the right hands. He further breaks down complex concepts related to wills and trusts, giving you a comprehensive understanding of how they shield your assets from falling into the state’s hands.

Isn't it disheartening to think that your hard-earned assets may end up in the wrong hands due to a mere oversight? This episode reveals a compelling narrative of a couple who encountered unintended consequences due to outdated beneficiary information. Jerry also accentuates how pivotal it is to routinely review your beneficiary designations on key documents like wills, 401ks, life insurance policies, and several others. We also take a shot at busting common estate and financial planning myths, reinforcing the importance of a well-crafted plan to evade heavy costs and complications for your loved ones.

As we wrap up this enriching conversation, Jerry paves the path for you with specific pointers to kickstart your estate planning journey. He drives home the point that it's never too early to initiate this dialogue and the importance of roping in all essential family members. Understand each relative's desires and establish mutual understanding within the family about the proposed plan. This action-packed episode leaves you with the know-how to safeguard your assets effectively and guarantee your family's financial stability. Tune in and take the first step towards ensuring a secure financial future for yourself and your loved ones!

Support the Show.

Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want – brought to you by Neighbors Federal Credit Union.

The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice.

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Show Notes Transcript Chapter Markers

Guest:
Jerry Linebaugh
Founder, CEO, Financial Advisor and Fiduciary
Game Changer Wealth

Ever wondered how you can retain absolute control over your assets, both in life and beyond? Well, you're in the right place. We welcome back our astute guest, Jerry Linebaugh, a guru in wealth management, to unravel this mystery. Jerry expertly illuminates the often-overlooked significance of having a power of attorney to prevent costly blunders and keep your assets in the right hands. He further breaks down complex concepts related to wills and trusts, giving you a comprehensive understanding of how they shield your assets from falling into the state’s hands.

Isn't it disheartening to think that your hard-earned assets may end up in the wrong hands due to a mere oversight? This episode reveals a compelling narrative of a couple who encountered unintended consequences due to outdated beneficiary information. Jerry also accentuates how pivotal it is to routinely review your beneficiary designations on key documents like wills, 401ks, life insurance policies, and several others. We also take a shot at busting common estate and financial planning myths, reinforcing the importance of a well-crafted plan to evade heavy costs and complications for your loved ones.

As we wrap up this enriching conversation, Jerry paves the path for you with specific pointers to kickstart your estate planning journey. He drives home the point that it's never too early to initiate this dialogue and the importance of roping in all essential family members. Understand each relative's desires and establish mutual understanding within the family about the proposed plan. This action-packed episode leaves you with the know-how to safeguard your assets effectively and guarantee your family's financial stability. Tune in and take the first step towards ensuring a secure financial future for yourself and your loved ones!

Support the Show.

Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want – brought to you by Neighbors Federal Credit Union.

The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice.

Speaker 1:

Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want. Now here is your host.

Speaker 2:

Ms Kim Chapman, welcome to another edition of Money Matters. I'm your host, kim Chapman, and today we will be talking about estate planning. My guest today is Jerry L. He's no stranger to the Money Matters podcast. Welcome back, jerry.

Speaker 1:

Thank you for having me, Kim.

Speaker 2:

So just remind our listeners, tell us what GameChanger Wealth is, and a little bit about your credentials before we get started.

Speaker 1:

So GameChanger Wealth is a financial planning firm and we manage money. We also give advice on safe money, so people, how to create safe money assets and income-driven and future-increasing income programs as well. Financial advisory also includes looking at the tax implications, so and how to get to a lower bracket with tax planning, and we also look at estate planning and estate planning. You know, one of the questions that you're wanted to talk about today right off the bat what is estate planning? And estate planning belongs, in my opinion, within the total financial planning realm.

Speaker 1:

You can go to an attorney, you can go to an online source, possibly, find a template, maybe, and attempt some of these tools, but if you don't include, in my opinion, all of these other disciplines in there, then you really haven't got a solid estate plan, just like you wouldn't have a solid advisory income plan or a wealth plan. This is what you, probably your listeners, need right now. Many of them. They're trying to build wealth. They don't need access to their income, but if you don't look at all that, you may not have a true plan, a estate planning. So that's the first question why, what is it? Why is estate planning?

Speaker 2:

And then, what is the goal? What is the goal? Why should we even be interested in hearing about estate planning?

Speaker 1:

So estate planning, what is it Okay? Estate planning is you looking at what are the outcomes of not having your power of attorney done up to date? That's what happens if you're not dead, severely unconvenienced maybe. Maybe you're at a car accident. You talk, communicate for a while, maybe not ever, who knows. Or you are older and you had a stroke, or you had some other medical problem Alzheimer's, whatever. So you can be young or old, and the power of attorney, if it's not done or up to date, then your estate plan is an erect. You just don't know it yet.

Speaker 1:

There's going to be pain and suffering for family members when they try to go and look at your assets. And maybe they've got a great relationship. Maybe you've got a great relationship with your banker at your credit union and your mother has the same relationship. You're not on a joint account together. I don't care how good that relationship is with your financial advisor, your banker or even your cable provider, they're going to tell you I'm so sorry for your inconvenience and what's happened to your mother. However, we can't even tell you anything about the account balance, much less let you take money out and help pay her bills. You'll need to get an attorney now and it'll be one of the last, most expensive financial mistakes you'll make.

Speaker 1:

Easy to overcome, though with a power of attorney, they're not very expensive. You could probably get one done for a few hundred dollars most places. Now we provide some of those services at GameChanger. Well, to our clients, some of these things we do at no cost. Okay, some of them we do. But now the other part of estate planning is what happens if you're dead, right? So now that would be a will or a trust. Both of those could be used. People always ask me what's better, a trust or a will. And I would say to you what's better, a hammer or a screwdriver? Well, what's the answer to that?

Speaker 1:

You need them both Well you could need both or, you know, depends on what you need Right. What's the outcome you want is what I always ask. Well, so estate planning is simply where you don't lose control in life or death and there is because your assets that don't have a power of attorney while you're alive that's medical or financial or if you're dead, then there's loss of control. It means you're trying to give someone else either temporary or permanent control over assets so that the state doesn't have to decide. We call that process if you're dead, dying or dead succession in Louisiana. Every other state, though, calls it probate.

Speaker 2:

And why is that?

Speaker 1:

Because we're civil law. We're the only country, only state in the US, that practices civil law. And I'm not an attorney. By the way, I own Game Changer Tax and Estate Planning. It's a sister company and it sits right here in the building, you know, with our Game Changer Wealth and it exclusively serves our clients for Game Changer Wealth. But you don't have to be an attorney, you don't have to use an attorney to do your estate plan. Okay, you just want to do it with somebody very competent. Every attorney I've talked with and I'd still work with some. Sometimes we do farm out and do recommend someone talk with an attorney to do an estate plan, which is remember, that's the power of attorney in will and or trust. Sometimes that skits farmed out.

Speaker 2:

Under what circumstances?

Speaker 1:

Yeah, I'm going to say this 95% of the listeners today and I'm using that. I just made that number up. Okay, but it's a high percentage of your listeners.

Speaker 1:

But it's general. A high percentage of your listeners don't need an attorney to arrange things. Okay, because every attorney I work with uses software. There's a pair planner involved usually, and that pair planner knows that software. I mean, do you really think that every time somebody is doing a will or a trust, that they're sitting down postulating all the Elizabethan language, legal language, necessary for you? No, they're going to take your name, your address and the things that your assets. They're going to title them and put them in. The software is going to spit it out. It doesn't matter.

Speaker 1:

Plug and play who attorney. What I mean this is the modern age 95% plus maybe of the listeners today who don't have complexity probably could do this with a firm like ours where we use our pair planners to put it together. But let's talk about those few cases that might wanna go talk to an attorney, and when I get in front of somebody and they step on one of these levers, we're gonna call it. Then it's gonna be a trigger, a lever that I will send them to a good attorney that I know or and I'm not usually given more than one. So if you were trying to disinherit someone, you're gonna try to take one of your kids and say I'm not doing that, not going there, that's a black sheep or they're terrible with money. Whatever your reason, if you're trying to disinherit somebody, often we see this right. The drug culture has really messed people up and messed their feelings up.

Speaker 1:

Messed caused you to behave differently.

Speaker 1:

Could be some other reasons. If that's you, then I'm gonna probably have you talk with one of our attorneys and that's gonna probably add some fee to it, because now they've got to step through some very complicated processes to see if they can even accomplish that. If you have very complex business holdings maybe it's involved with limited partnerships, or maybe you've got business incorporations that have complex issues with other states, even and out of state, even out of the country that's gonna be probably an attorney visit for that. But if that's not you right, if you don't have that complexity, you're not trying to disinherit somebody maybe you've got your house, maybe you have a second home, that's fine, that's easy In this state or somewhere else and you're not trying to disinherit someone I think you could probably do it more simply and save some money and do it very competently with Game Change, your Wealth and Estate Planning, or if you just want to talk with an attorney just to do that, just remember you'll probably pay a little extra for that. If that's what you want, you can get that.

Speaker 2:

So let's look at the other extremes. Probably some listeners saying well, I definitely don't have a complicated situation. I may only have a house, maybe a couple dollars in a bank. Why do I need to have an estate plan?

Speaker 1:

So let me stay on that list about who, but you know what? I think we did a good job with that. We did talk about who would probably need to go see an attorney, right, but then there's another group, right, that would probably we could say, doesn't even need a complex or even less complex will or trust. You know, if you're gonna die with less than $125,000 of assets we're talking about house credit union things that would be taxable in nature every year. Maybe it was a bond you had, but it's you own them. It's not an retirement plan like it's not in an IRA 401K. We're just talking about 125,000 or less of those assets.

Speaker 1:

You can do a small succession, something without the normal administration cost, very, very inexpensive, and you know that would still do a will, though, because the will is a letter to a court. A trust could actually own the assets and we'll get into the differences between wills and trust. But just talking on a high level of who may not even need to do any of this right or those who would pass away with 125,000 or less, because that can, you can avoid some of the what they call the full administration process and Louisiana succession, and it's not that you wouldn't have any cost at all. There may be a $100 here or something of a recording cost, but you could do that without an attorney.

Speaker 1:

If your mother, father, somebody, your help, maybe you're the executive of the estate, even appointed. Maybe if they didn't have a will, you'd be an executive appointed. That could be someone, but you know that's probably not the majority of your listeners, right? The majority of your listeners probably are gonna end up passing away with more than 125,000 dollars of a real estate a camp or a house, or could be bank account or stock that they all not write. Now let's talk about. Does it belong in an estate plan per se, with a trust or will? There's some things you don't put in there because they're not gonna be controlled by a will or trust.

Speaker 2:

Okay, that should be interesting to learn.

Speaker 1:

Yep, so actually start with the bank, okay. Or credit union. Louisiana law changed a few years ago. It used to be you could not put a bank asset or a credit union asset on a transfer on death form TOD okay. But now you can, and often even some attorneys who don't do this a lot, right, some attorney friends who admitted that they don't do wills and trust a lot, they do divorces or they do bankruptcy or they do litigation okay. So some of them didn't even get the memo that a transfer on death TOD form, like other states, can now be used in Louisiana to move that property, move those assets at the bank without a will and without probate if you're in another state they call it probate so without a will or trust guiding it.

Speaker 1:

Just like number two, an IRA, any IRA, I don't care if it's a Roth IRA, traditional IRA, 401k, 403b, 457, drop accounts, annuities of any kind. None of these belong in your will or trust, for that matter. They're not trust controlled, they're not will directed, because the law already exists that says if you pass away, these listed beneficiaries will receive this with really no cost, no administration. Now what they'll do right is provide proof of death, usually the coroner's office or the funeral home can supply that, and then you turn that in. They examine it. They look at the documents that are already on file. Right, their will.

Speaker 2:

Excuse me the TOD, which I think we call it a POD, pale bone, death Pale bone death TOD, so pale death, tod again.

Speaker 1:

This was like couldn't do that in Louisiana forever, and I think it was three or four years ago that that changed. And life insurance of any kind, the death benefit is controlled by a beneficiary, just like your IRA, just like your 401k. Any annuity Okay, so it's a fairly big list and it's probably the majority of people's investable and or save net worth is can be done without a will, without a trust. In fact, it was a case. I think it was in New York, it might have been in Virginia and where a couple was working. They saved together all their life. They were together 36 years and they had been saving in her IRA. Now they were also each of them previously married for a short time. He and she both they were both married previously for a short time, few years, didn't know each other got together after that divorce and discovered their friendship of long ago rekindled and it was the greatest thing ever. Right, the story of the family and the friends, because all this showed up in court later on something. It's a terrible story.

Speaker 1:

It is, and you know, 35 years, I think, of marriage and between the two they built a fortune. They saved money and invested inside of her SEP IRAs it was for self-employed and they did well, had well over a million million and a half dollars, were just now starting to enjoy retirement. They were supplementing some of their income from that IRA, that big IRA and she passed away suddenly. It was tragic, but you know they had lived a good life and he provided proof of death to the IRA, to the custodian, big, popular custodian I think it was Fidel Leib and don't quote me on that and they were told sorry, you're not the beneficiary. You see, she was married before, Even though his will and his mind because he didn't talk to a professional said my assets, including this IRA, shall go to my current wife.

Speaker 1:

I mean very simple, right, Clear as day, except that the law and every state will be so far historically, will ignore that will. That mentioned that IRA and everything else and unfortunately it's going to go to the listed beneficiary who was, in fact, her first husband. It never got changed Wow, the beneficiary never got changed. And it went to court. It went all the way up to the state courts and the supreme court I think it was supreme court there at rule. Again, it was in court and they said no way it's going to go the way the beneficiary is on that IRA. So if you're going to, if you're remarrying, make sure you go through all your 401k, your IRA, your life insurance, because those are, in fact, beneficiary control without probate and without succession here in Louisiana, and that could be a great thing or it could be a bad thing if, in this case, it was. So, yeah, I wish every story was happy.

Speaker 2:

And you know, just even thinking about that, because that's something I've heard this story before so how often should individuals review their documents and whether it's a will, a trust, a state, how often should they review it? I know people get complacent and it's like oh, you know like. I said 35 years. You're not thinking about anything. Nothing's changed.

Speaker 1:

But you know as a rule of thumb how often you should look at your beneficiaries on your IRAs, 401k, 4-3-Bs, all that stuff, your life insurance, if you have it, you should look at your power of attorney and your your you know your own death document at a bank. If you have one, or credit union POD, you should be looking at that every three years, but that's the norm. That's what most attorneys and estate planners will tell you. I think you should look at them every year.

Speaker 2:

Especially if you do have a big life change, but if everything seems to be, if it's all, organized, which people aren't.

Speaker 1:

But if it's all organized right, Because somebody got you organized as part of what we do, we get our clients organized Then the review process should be done with this person you already have a relationship with. Now that makes a game changer. Well, if a little unique, because we do those reviews with folks, because we're already looking at the assets, the risk, the tax risk and the tax planning we're already looking at, you know, the rate of return Risk versus the rate of return we're getting. We're already looking at income quality and revisiting that on a regular basis. So for us it's just another thing to review. And you already have trust with that person, hopefully, right. So I would call you know your current advisor, if you've got one, or Talk to your Relationships you have with whoever you have with money and say, look, I want to make sure this is reviewed every year. Would you be able to do this with me? Probably they'll say no, but you already have a relationship there and you trust them. You'll start there. Now. Let's say, well, we can get you over to an attorney. Well, the attorney is, remember, not going to have access to all your other assets, these.

Speaker 1:

So you should never, in my opinion, do estate planning in a vacuum. You should never Just go look and get these docs done. I know that's popular, but that doesn't make it the best, right? People say I want the best, I don't want to pay a lot for it, because, you know, having the best of things Doesn't always mean you paid the most. Right, absolutely so. Having the best of things Just means that you've got the best and you, maybe you got it for a discount, maybe it wasn't expensive or complicated. That's true about everything in life and it's absolutely true about estate planning. I think it is part of your overall Wealth outlook and you know you may only have a hundred thousand dollars or less right now, but you know, is that your goal? To only have that if you're a young saver right now? I know your listeners are of all ages, right, and you know who knows what's going to happen in the future, but likely things are going to get better. You know things work out, don't they?

Speaker 2:

so what sort of things should they be thinking about? If I come into the office, what kind of questions should I expect that you're going to answer? You know you're going to ask me what should I come in the office knowing, like you said, we're talking about the future? Here's what I have now. What kind of questions are you going to give me?

Speaker 1:

so again, I, if you're only approaching this to see if you got your legal docs in mind, I'm going to say, hey, let's start there. What do you already have done? You know you already have a will, you already have a trust, because you really want one of the two, I mean, and we can make an argument today about how people could get out of needing these things. But that's going to be so narrow and if things change on you where you suddenly have extra money because maybe somebody died and left you something, well, you just added the need remember over 125,000 dollars of Inheritable value outside of an IRA, outside of a TOD, stuff is going to have a. You should have a will or a trust directing that. So I would start there. What have you done? And If you've not done anything, make a decision right now.

Speaker 1:

Do not be embarrassed. Do not do that. That is one of the top reasons why people haven't done it is because they're embarrassed. They know this should have already started this, but oh my god, what do I do? Number one don't be that way. This. Let's make a decision to get it done. The second thing that think it holds people back right is they think, oh my god, next to brain surgery. This is just underneath that complexity and, just like brain surgery, is so serious. You know it's not like other surgeries. You know brain surgery. If you go in there and touch things you can cause paralysis.

Speaker 2:

It's trickle down effect can be overwhelmed.

Speaker 1:

Okay. So that's false. It is not complex like that. If you're talking with somebody who does this all the time, especially like we, we pull it all together the tax side of things, the Investment side of things. You know that's not expensive.

Speaker 1:

But, by the way, we do it for no cost or obligation for all of your listeners today if they want to get an in writing plan that looks at the estate plan. It looks at the Will or trust or power of attorney whether you have it or not, looks at the tax outcomes. It looks at can we get to a better bracket with planning, you know, versus just taking in on the chin whatever they throw out is looks at your safe money and and your options for safe money, future income needs, how we're gonna get it in an emergency or in a retirement. Are you taking more risk than you should or should you take more risk to have a potential longer rate of return, a longer, long-term, better situation? That is no cost or obligation with this. That's huge. That's a $1,500 value by many of the folks out there that that will charge fees and I don't think it's okay to charge the fee. By the way, I'm not against people charging a fee, that's just our position presently, and I get invited to speak through nonprofits.

Speaker 1:

In fact, I just did an engagement with the Jones Creek Library, I think it was this week. We've done some of the events and they get in. We get invited to go talk about all these things. So that would be something they could do is attend one of our public, no cost obligation. If you like what I'm hearing today, that you're hearing today, maybe you'll come join us on one of these events. We would like a heads up if they're coming so we can have a, you know, a booklet or something that can follow through. These events are on two, two and a half hours, are very in depth, very simple, but I'll go through all kinds of processes, including estate planning, the differences in wills and trust and power of attorneys, how to do it cheaply, what some points.

Speaker 1:

You should be looking at some red flags if you know, if these things are not in your plan, what to look for. The tax side of things, the investment side of things, the income side of things will look at all that. It's a. It's a great expose. I got a little break built in the middle of it and then, if they want to have a little sit down with me, they can. So this is a public service that we do through the libraries also Twice a year. Lsu has so for come out and I speak there twice a year. You and, oh, and also as far as Arizona, we just didn't want in Arizona got invited out there to speak at a mountain college.

Speaker 2:

So wow, and I imagine it's a lot hotter there. So you kind of mentioned some of the reasons why people even avoid. You talked about the fact that they're they're embarrassed, they feel like they don't have anything or they waited too long. You know, we talked about the simple fact. They think it's brain surgery and I think you know I can identify with that. It does for like it's complicated. But what about the cost in general? What? What should I expect, at least going into the.

Speaker 1:

So, first of all, there are plenty of places that will charge a fee To just to have a review. Okay, we don't, and we look at all of that, remember. We think all of that needs to be looked at together. Okay, so now you can start with that in mind to have a potentially an hour of my time, or my team's time, going through and helping you know the questions you should even be asking. Now, that may take a little time to get the answers for those questions, right, if you're going to end up with a will or trust, there's going to be things you need to pull together, right, but that first consultation is just really about Understanding. What outcomes do you want in all these areas?

Speaker 2:

Is there such a thing as a checklist? If I'm going to schedule an appointment and I don't want to just stare in the ceiling saying, oh, I didn't think about that, I didn't think about that. So that. I can kind of have it together before we meet absolutely.

Speaker 1:

So let's let's also decide now that we do need to get a will or trust done. Okay, because you don't want that lack of control which happens if you died, like Prince did the entertainer yes, he died in test state. We call that, that's without a will or trust, and the courts do that all day long. I mean, the majority of people seven out of 10 people in Louisiana don't have a will or a trust or a power of attorney, or if they have one, it's up to date or it's not going to work Because of some HIPAA law changes or whatever that made it invalid. And in his case it took six years. Just last year it finally settled tens of millions of dollars and for what happens is, maybe if you die broke, probably no one's going to contest. You know your $10,000 in the bank, okay, or your house that's falling apart. Maybe that happened to you as you get older and you had deferred maintenance and the neighborhood changed. Maybe nobody's going to contest that, but it doesn't take but one person. It could be a creditor who raises their hand and says that's not the real will. Here's the real will. If there's any contestation, that's where your costs start jumping up.

Speaker 1:

So I would say that you need to put together a list, for you know what do you own. Is it IRAs? Is it 401Ks? Is it all these things, even if those don't belong in the will. Remember, those 401K retirement accounts don't belong in the will of the trust.

Speaker 1:

But I would start with that, because you know if you're going to do any kind of gifting or early gifts and you know before your death that needs to be talked about, right, because that will change the status if you do that and could have some tax benefits for you too, by the way. So that would be something. I would put a list together with everything. If you have a house or property out of state, you know, get that address together. You know we have a little checklist that we send out by email. It's totally no charge. So if somebody wants to get this detailed checklist, they can get that by simply contacting our office. You know they contact you. You can give it to them. They can send an email to Gerry at GameChangerWLTHcom or they can call 225-664-2565. And again, I'm sure you can help them with that if they email back in.

Speaker 2:

Oh yeah, we'll repeat all of this.

Speaker 1:

We'll get a list to them and for sure I'll start there. And if you already have a will or already have a trust or something, we can have one of our professionals review that and see where you're at. So you know, the main thing is outcomes. You know what outcome do you want. So let's talk about that, right, gerry? I don't want complexity. I don't want my kids to have to volunteer to be an executor, which is what they call that if you have a will, or if you don't have a will and died in test day, they're going to have a.1. Gerry, that's inconvenient for them. I don't want to do that. I went through that with my father or my mother, okay, you don't want that process of hiring an attorney and going through all that, right, okay, well, that outcome would be a trust of some kind, and there's two kinds. You have a revocable and irrevocable. They say revocable to irrevocable and I'm not here today to tell people they should do either one of those. Just to kind of highlight, though the revocable is most common and it means that it can be changed, just like a will. You know, you may feel strongly today about how things work, but next year things could happen. You may feel different. Well, you can change either the will or the irrevocable assets. You can pull things in and out of it. You don't mess up your tax basis if it's done right. If you pass away with a will, a house can go through, or even without a will it's not the best thing, remember but it can go through a process and then it can be stepped up in basis. That means if you would have sold it in your lifetime, your will or properly done trust agreement that can actually allow, still allow the step up in basis. That means that if you sold it in your lifetime, might have had a tax to pay, but if they inherited that house or that stock that's not in a retirement plan, if they inherit those assets owned directly by you or your spouse, then that tax bill is washed away. It's called a step up. Okay, that's present law that could change at any time. Okay, well, you don't lose that if with a will or properly done trust, even if it's revocable, revocable. So that's really a good thing to make sure that you understand.

Speaker 1:

I have somebody right now. They're married, 58 and 60. He always jokes and says you know, because she's 16, he's 58, I married an older woman he reminds me that all the time and just tickles her, you know. And they have some exon stock that he got from employer, the employer plan. Now he got it out of that plan and was able to do something called NUA and now owns it directly. He does have a 401k. So I put him at ease Look your 401k with those assets there. That's going to go without a will or trust, but this, this, the stock that you own right here. Okay, he's like if I sell that right now, I'm going to appell this big capital gains tax because I got it for next to nothing and today, the value, you know it's pretty high.

Speaker 1:

I said, well, what he was talking with us about, the state planning and I said let's look at the whole picture the tax picture, the wealth picture, the risk picture, the income, the dividends. Do you need that? Do you need more income? And it uncovered that they were taking more investment risk than they should, and so that was another reason to do some planning. So they came in looking for just a will. You know all that. And in the process we uncovered look, if this market goes down, you're going to lose way much and mess up your dividend, and so that diversification came about, while they were in here looking for something else because our process looks at it all and they didn't get exposed to a fee or a charge, and they were like you know. This was a phenomenal experience.

Speaker 1:

Now we did end up showing him how that he can do a simple revocable trust that can then own that stock today even, and then it's transferred without a bunch of fanfare. Nobody has to volunteer. It's the same thing with his house, but that in there too, he has. I think they have a duck camp that they want to keep. So at their death, all it is is somebody producing proof of death and presenting that to the custodians that already have the trust agreement and all the other stuff there, and that will pass very simply and easily, because that's the outcome they wanted, because the trust owns it. That's the key, though. So many trust fail to do what the owners want to do, not because the trust documents are written wrong, because they never got back with their financial advisor or banker to put the assets in the trust, to retitle it. That's not the job of the attorney. They can't do it. So now let's talk about Michael Jackson.

Speaker 2:

We talked about Prince not having a will Now going to sing, are you?

Speaker 1:

No, not going to sing, but we talked about Prince having no will and let's talk about Michael Jackson, who had the best arguably the best trust language that my attorneys I work with have ever seen. This is beautiful. There's everything he ever wanted, except that it was listed as one of the most epic failures. This is not the failure of the trust. It's the failure that Michael Jackson never got back with his other custodians to put the assets in the name of the trust. So it's called funding.

Speaker 1:

The majority of trust we look at are not properly funded, so we have to make sure it's funded. That's another thing that we do and it's easier for us to do than a lot of other institutions. That may be because we are already. We're working with the custodians. We work with those investment groups or wherever they have their money if they're a client. So it's not hard for us to do the funding. It's just natural because we're right there. So everything is under one roof. We have the estate planning review and our professionals that handle that, and then our tax sides right there and actually they save money. I mean people tell us all the time, Jerry, we actually save money in this process and feel like we see and feel the connection that all these things have, instead of having them siloed here and siloed there, and it's been a great experience for many of them and that was what we did for them.

Speaker 2:

And I imagine, most people that are thinking about estate planning or those that are thinking about retiring. That's when we start really thinking about end of life, when we feel like it's a lot closer. What is a good age to really start looking at this?

Speaker 1:

Any time you own anything. What age is that For my oldest daughter? She's just now starting to acquire some things. She's 19, still in college, and it's now when you start acquiring property. It's time to take your first.

Speaker 1:

Take a look at having a power of attorney. I mean, you don't have to be wealthy to have a need of power of attorney, right? Power of attorney is part of your state planning documents. That's what happens if you're not dead, I'm sick, I'm injured, I can't communicate. That could be in any age, right? Car accident, for example. It's the most dangerous thing we do every day is drive.

Speaker 1:

So she needs a power of attorney, you know, in my opinion, because that way, if she can't communicate her desires and if she has some money, right, we can go in there and help pay her bills, just because I'm her parent and I have a great relationship with my custodians. Like I said earlier, under HIPAA rules they cannot even tell me the balance. I may have a paper copy sitting at home or something, but I'm locked out of it. As great as my relationship is, as influential as I am in this financial world, I cannot help my wife pay her bills or her go into our joint bills, unless her name's on the account. Remember IRAs that don't has your name on it, it's just your name, not your spouse. Can't be joined on 401K Whose name's on it One person. If that person's the one incapacitated, that money's locked as very expensive process to go through and link the process to go through to get control where you did not do it so cheaply, so inexpensively, through a power of attorney.

Speaker 2:

And we see it all the time, especially in the credit union Somebody well, that's my spouse, that's my daughter, that's my child and they don't realize that we're not able to give you that information.

Speaker 1:

Right, so this is so easy to fix. I mean, it could be as if that's all that you're trying to get. You just want to take some action right now. It could be a few hundred, a couple hundred bucks, but you know, looking at the whole picture is not complicated, though. I would take a look at it all and sit down with one of our folks. You know, have a call with me, you can. You can look, I make a call, I have a call with you. Just start with a phone call. You know, don't worry about getting it all together yet. Have a phone call with a professional.

Speaker 2:

And who should be included? When I'm ready to do have that call, sit down and look at it. Who really needs to come to the table if I'm married? My spouse, the kids?

Speaker 1:

Yeah, the initial process of gathering stuff could just be one person. But when it comes down to, okay, if I'm going to be sick and if it's pandemic, I mean the pandemic, right, Though they were coming out with the ventilators, it became evident to me at least, and my wife we did not ever, for COVID, go on a ventilator. So if we were had a COVID diagnosis, positive diagnosis, and we're in respiratory situation, we put that into our prior attorney and many people wanted the same thing that specifically, don't even do that, Just don't. Now we've learned a lot since COVID. Right, we now know that. You know the medical community is knowing that if you get some of the COVID and respiratory challenges, you roll them over, and the fact of rolling them and changing their position increased the, the survival rate.

Speaker 1:

I forgot how much, how much it was, but it was insane. Okay, All of a sudden you didn't hear about people dying on COVID ventilators anymore. So we understood we changed it, but initially I didn't want that. You know we're all worried about I don't know about y'all but I was looking behind every trash can. We were, bags were coming into the door, we were taking, you know, alcohol and washing off the cans, and I mean because-.

Speaker 2:

Spraying the groceries, yeah.

Speaker 1:

I mean we just were because that was the medical advice at the time. Now, later on, we'd learned a lot more about that. So today I'm hoping to put some people at ease that this does not have to be complicated. Yes, you got to get it right. But if you work with somebody, that the only time you should be paying in my opinion, the only time you should ever pay a fee is if you got your questions answered. You know exactly what's going on. That's how we do it.

Speaker 1:

That's not how everybody else does it. In fact, most attorney driven processes don't want to talk about any of that. They'll answer questions about you know who their favorite football team is, that a will is important or a trust is important, and talk to you about that. But to get in and start looking at your stuff, most of them most of them are going to start having they'll want you to pay a retainer fee up front first. That's where we're different. I can look at the whole picture, including that legal side, you know, looking for what your outcomes you want, and say then we put the whole plan together. I think the estate plan is really a sub part of the total financial plan. Some attorneys will just do because that's their license. Just do the estate planning part of it. I just believe that you're better off having the whole thing looked at together and then, down the road, having it reviewed by somebody that has all those qualifications, and continue to do it that way.

Speaker 2:

And so you've kind of calmed our nerves. It's not brain surgery, but I know somebody's listening saying how much time is this going to take?

Speaker 1:

Okay. So we started somebody the day on my radio show came in from a you know, one of our podcast and radio shows and we get that a lot people call in and I said, okay, so what outcomes do you want here? So well, we want, we want to get to a little better tax bracket. We thought that you know, we heard that you can do some tax planning here and maybe give us some tips on how to get to a lower bracket. Because the RMD they've got registered, you know, the requirement of distribution IRA is going to be very high for them and they didn't even need the money. Their pension Social Security has been enough to live quite nicely on, but this RMD is going to come at them and hit them right between the eyes and cause all those tax, tax, taxation. I said, yeah, we think we can probably save you some money there. We'll run some numbers. Let's also look at your assets. And they were worried that they have all this other stuff and IRAs. They have like six IRAs and said why don't you have six or seven IRAs? Because you know I want to be diversified. I said, honey, you can be diversified having one account and create diversity in that, in that IRA right and plus get rid of all that necessary complication. So they had a lot of myths and misunderstandings. We got a lot done in one hour. We were able to take an. I was able to uncover four or five, six different myths about financial planning and estate planning and tax planning and set them on the road to for the next meeting to have delivery of the tax plan, how to put that together and save them and there are case four, five, six hundred thousand dollars of lifetime tax, as well as get rid of the complexity and all those nerves to dealing about what happens if somebody gets sick and who's going to stand in if that person can't stand. So it just took us two meetings really and there were some calls and things that happened between the two meetings. But you know, I think when we take they're taking delivery of it this next week and they've said, cherry, you know what a weight that's lifted, because when you, when you're dealing with somebody who knows what they're doing, that that confidence is coming. It's not cockiness, but there is a calm confidence that can come through this and you can feel it. You know, I think people ought to listen to their gut more.

Speaker 1:

God gave the gift of fear to every creation right. Most every animal that crawls the earth has the gift of fear. I call it. I think Oprah Winfrey was a book left on the back of a plane that she interviewed way many years ago. You know, and I can't say that I followed Oprah every day, but I'm on the plane waiting the tarmac. We got delayed. There's a book somebody left in the back and I picked it up and it was somebody she'd interviewed and mentioned in the back of the book the gift of fear. I can't remember who the author was, but she was talking about it and I said man, that is so true, so many animals. If God gave the gift of fear to all these other animals.

Speaker 1:

Imagine a little fox creeping through the forest you all be bopping along, suddenly gets to the edge of a clearing, can't explain it, but just stops. His, maybe his mind doesn't know something in him. The little fox knows to stop. And so you can also go forward when things make sense. And I think if we, if we stop, if we just go back to common sense, start using it, what is your common sense gut? Tell you today, probably, that I'm right, that we need to get this taken care of and it's not going to be super complicated. It does not have to be expensive. I might tell you what is expensive not having a plan. What did it cost? Just recently there was a person in town here I think it was about a year and a half ago actually when the final piece fell. I won't mention the family's name for privacy, but they owned like an oil servicing thing that brings gas and things to service stations. You see those trucks pull up sometimes and they put gas in there and you have to wait for the truck to get out of the way. They put the big hose in the ground. They had a company that did that and he passed away. His wife preceded him. He passed away and had a great amount of complexity in there. Okay Well, didn't have enough to date, had a holographic wheel. It was just kind of on a napkin.

Speaker 1:

You think, with all this money and all this stuff, why wouldn't he get that done? Maybe he was putting it off, thought he had more time. He was 87, I think and it is extremely expensive in his case to go through all these different things. Who's? The creditors had their hand up, you know. There was plenty of money, but there was also leverage and loans had to be taken care of, and this would go on to cost the family in excess of $600,000, which it could have only cost a few hundred dollars.

Speaker 1:

Maybe if he just had done the will Now it wouldn't have saved him in the administration of the thing, but just to get discovery for the judge to figure out who's going to take control of this and who's going to take control of that business arrangement. That right, there was where the attorneys were eating up a ton of money. This is before the judge was able to give a possession order, right. So if you're not going to, if you're going to go through a will, if it's properly done, you're skipping instruction to a future court to what you wishes are Okay and I would expect the cost to be somewhere between one to 4% to settle the estate from a will Now. If you have low assets when you pass, maybe this is a good pathway and you're one of your kids is okay standing in to hire the attorney and go through that process. It's less than $125,000, a total assets and maybe it's very little cost, if any can settle quite fast in Louisiana through the small succession rules, but the trust probably would have been his best bet, right, and he could have done unequal gifts, because I think that's probably what they were trying to do with family was claiming that that this person was supposed to get this and this person was supposed to get that.

Speaker 1:

If you want privacy, privacy, well, that's not a will. See, that's an outcome somebody wants. Well, if you want privacy, a will is a public document. It can be put into the paper. In fact, often is from a person who has wealth and various things. But a trust is private. The only people who will know who got what, if is uneven percentage, would be the individual recipients, and that's only if they talk. Well, that'd be on them, but it's not a public document. The trust itself is not a public document.

Speaker 2:

Didn't I know that learn something new every time you were?

Speaker 1:

saying if you have property in another state, just a simple camp or vacation home, your will in this state does not dictate and set up a court process in that state. So will is not great out for people who own property out of state. I didn't mean to make that rhyme but I think it does. You know, a will is not great if you have property in other states.

Speaker 1:

Sounds like a doctor says book in making, you know a trust would be a better because it can actually does administer. Usually it's written right and recorded right can handle property and disposition in other states, even in other countries possibly and if you move your will here it needs to be redone, you know pay off for it all over again and another state. If the trust is done right, the revocable is what we're talking about today. That is portable. That's usually doesn't have to, usually doesn't have to be altered.

Speaker 2:

All right, tell us again how can our listeners reach you it seems like you you know give it a lot of good information and definitely maybe reiterate some of those events that they can attend just to come and get their feet wet, to learn about the whole process.

Speaker 1:

So again,J erry Linebaugh, you can Google that name. You know I'm quoted often over the years in the media, so local, I think WBRZ TV would quote me over time. Us News war report, usa Today you can find me. I'm all over the place. Okay, in a good way and hard to find. Jerry Linebaugh, l-i-n-e-b-a-u-g-h. You can also Google game changer, wealth, game changer, tax and estate planning. Those are all brands we have right here. Our corporate office is on Jefferson, right across the street from the Gastroenterology office, and if you're over 50, you know exactly where that is.

Speaker 2:

A two for one visit.

Speaker 1:

We would hope that you'd make a call first. Okay, because we are appointment only. I do have offices all over the state though. I have a Lafayette office in the oil center. We have a beautiful office overlooking the water on the Poncha train, right before you get on the, the causeway and one Lakeway building there. We have a new office in Scottsdale, Arizona, and soon offices everywhere, but we do a lot of work, so if you have relatives out of state, we can handle that, you know.

Speaker 1:

So you know we're not limited to Louisiana, and that's another thing people like about us to find out, about to come hear me speak of these public engagements that I do to the public. There's no qualifications to come. We just like to like to prepare it. Make sure you got some handout for it to follow us with. You can call the library and find out, or you can call our office, and if you're just want to have a call with me, I'll take a call. It's, you know I have to schedule it. Call the office, brandon will find a time, or any of our team members find a time. Well, let's have a conversation, let's schedule that call, and that's 225-664-2565. 225-664-2565. All right, jerry.

Speaker 2:

Once again, thanks for coming back and talking to us, and I'm sure we'll see you again soon.

Speaker 1:

Great.

Speaker 2:

As we learned today, there are professionals that can help you through the process of planning your estate. However, having that initial conversation might leave you wondering where to start. Here are a few tips to get you started. Start the conversation sooner rather than later. Remember, no age is too early, especially when you have property. Include all the necessary family members in the conversation. Be sure you understand your relative's wishes. Establish an understanding of the plan among the family and ensure all family members understand their roles in that plan. And for more information, check out neighborsfcuorg forward slash financial education to learn more on how to use the money you have, make the money you need and save the money you want.

Estate Planning
Importance of Reviewing Beneficiary Designations Regularly
Estate Planning and Financial Review
Understanding Estate Planning and Trusts
Power of Attorney and Estate Planning
Financial Planning and Estate Planning Myths
Starting and Planning Estate Conversations