Brian Skrobonja: Hello, everyone, welcome to the Common Sense Financial podcast, I’m your host, Brian Skrobonja. I want to jump right into today’s topic of estate planning and introduce our guests, Jesse Naeger with the law office of Andrew Weinhaus. You hear me reference and emphasize the importance of having a financial plan in place for yourself all the time. But underneath that plan, that umbrella, is an estate plan. And Jesse and I have worked on several client cases together over the years. I just felt bringing her on to the show would be helpful for everyone to get a legal perspective on why estate planning is so vitally important. A little bit about Jessie shared a bachelor’s in finance and banking in 2011 from the University of Missouri and received her J.D. in 2015 from SLU University Law School right here in St. Louis. She’s a member of both the Missouri and Illinois Bar and she resides right here in St. Louis with her husband, Corey. Jessie, how are you doing?
Jessie Naeger: I’m doing well. How are you, Brian?
Brian Skrobonja: I’m good. Welcome to the Common Sense Financial podcast.
Jessie Naeger: Thank you. Thanks for having me here. I wish we could be in person, but maybe at a later date.
Brian Skrobonja: Yeah, no doubt. You know, I’m really looking forward to the conversation because this is just one of those topics that, you know, when I’m talking with clients. It’s never really quite clear as to why they even need to do any estate planning. And there’s a lot of thoughts about it being for ultra wealthy people and all these things. And really, they don’t really understand that. So I’m really hoping we’re going to shed some light on some things and remove some clouds during our conversation today. But before we get started, why don’t you just tell us a little bit about you and your journey of becoming an attorney and why estate planning. And just tell us a little bit about what’s going on for you.
Jessie Naeger: Sure. Yeah. So I went to undergrad at Mizzou and I majored in finance. So while I was majoring in finance, I took a couple of pre law classes and this was like back in the day where the Bernie Madoff scandal had just happened. And so that was really interesting to me. And I actually went to law school thinking that I would be litigating white collar crime. Yeah, which is way, way off from what I ended up doing until I got into law school. And I quickly decided that litigation was just not going to be for me. But I knew I wanted to use my finance degree. So I took an estate and trust class in my second year of law school. And I really liked the area and thought, you know, this could be, this could be a good fit for me. So fast forward. And I’ve been in this area now practicing for over five years. And what I like about it, just as being a lawyer, is that I get to solve a problem with clients instead of, for the most part, not in an adversarial setting or just problem solving and dealing with problems before they come up instead of, you know, sometimes and being in that problem once it comes up.
Brian Skrobonja: Yeah, that’s awesome that you said that because I got some questions for you later on about that, about trying to plan ahead. Right. And that’s the whole idea of everything that that we do. You know, I think when when we’re working with clients and I’m sure you run across this, too, and I’ve already mentioned it before, but there’s just a lot of confusion around like estate planning or legal work or all of these different things. And so I think that’s a it’s a term that’s thrown around. But I really just don’t think people truly understand what that really means. So just from your perspective, maybe define estate planning for us so it gives us a little bit of a track to run on there.
Jessie Naeger: Absolutely. And I think, number one, it’s not something to be embarrassed about, even in my personal life with family and friends, they what type of law I practice and I say estate planning, They kind of think, oh, OK, that’s nice. But they really don’t know what I’m saying. So estate planning in a nutshell is basically like putting together a formalized plan to anticipate future situations. So it’s going to be the management of your assets if you’re incapacitated or if you pass away. The division, the distribution of your wealth. And then also probably one of the most important concepts is who’s going to be in charge of all these things.
Jessie Naeger: You put forth the plan and then you need someone to carry out the plan, because the whole point is that you’re not able to carry out the plan. So in terms of what questions we’re trying to solve, it’s who’s going to take care of my children when I pass away, how should my assets be divided? And then a lot of people think in their mind they know who their beneficiaries are. But a lot of the time, my clients don’t think about what that administration actually looks like. They know that they want their kids to benefit from their assets, but they don’t know exactly what that looks like and how that’s carried out. So we put together this plan to put in place what happens. And obviously, the main benefit of that from a client’s perspective is that their plan is going to be carried out. That’s their most important concern, is that their plan is carried out. From a legal perspective, I want that as well, but the other side to this, which I know we’ll go into more, is that we’re trying to avoid court involvement. Like I said, I don’t want to be a litigator. So as estate planning attorneys is one of our main purposes is really to avoid court involvement, and advanced planning can accomplish that. But without these documents, it’s very possible that we would be going to court when it’s just unnecessary.
Brian Skrobonja: So even taking that a step further, I guess, correct me if I’m wrong, but it’s it’s not just a death, but it’s also why you’re living right, so that, you know, I’ve had clients where they have situations where they’re, you know, in medical induced comas and they can’t make decisions for themselves or on the health side. And then you’ve got the financial side, too. So I’m guessing that kind of falls underneath that umbrella, too, right?
Jessie Naeger: Absolutely. And those are the real life situations that we deal with really on a daily, if not weekly basis where if these documents aren’t in place, if you don’t specify who you want to take care of your financial decisions, you know, financial decisions kind of encompass a large category, such as signing your tax return, paying your bills, making investment decisions, if your house needs to be sold. It could be a plethora of situations. But if you don’t designate who is in charge of that, who can act upon your behalf, then we’re in a situation where we may be going to court to try to get a conservatorship, which is a court proceeding. And there is a bunch of negatives about going to court. And then, like you mentioned, on the health care side, it’s extremely important. So the health care document in one part of the health care document is where you’re going to designate who you want to make decisions for you if you cannot make those decisions yourself, which is extremely important, especially in the state of Missouri. Missouri actually doesn’t have a statute that specifies if I’m incapacitated, it doesn’t mean, for example, my spouse can make decisions on my behalf. We don’t have one of those statutes. Illinois does. And I did some research and it looks like Missouri actually had a bill that just died a couple of years ago and we’ll see if it resurfaces. But in Missouri right now, we don’t have a clear law about if you don’t appoint someone to make your health care decisions, there’s really no clear law about who would have that authority. So at that point, again, we’re going to court and trying to get what we call guardianship.
Brian Skrobonja: Yeah. So if we don’t have the right legal work in order, then we are truly relying on courts to make decisions. And as we know, that can be drawn out longer than you could actually be literally dead before they come up with a decision. And then there can be a messy situation that comes from that.
Jessie Naeger: Courts work slow, not only are they slow, it’s time consuming. And then it’s definitely quite possible that whoever ends up being appointed by the court wouldn’t necessarily be who you choose. It’s possible that it could be the same person. But you’re taking a risk that it may not be who you want to make those decisions for you.
Brian Skrobonja: And I’m sure you’ve seen this to going along with what we’re talking about, probably more than I have. But I have I’ve seen it on my side, too, is just the family feuding and division that can come up if they don’t really understand your wishes in writing, because a lot of times it’s not even communicated. Right. Most families live in secrecy of all of this kind of stuff. But if it’s not in writing, you have family issues as well.
Jessie Naeger: Absolutely. And I will caveat with saying, even if you have it in writing and there’s always a possibility for family disputes, however, we are decreasing that risk down to just a marginal risk if you don’t have that in place, especially in the medical context. But it could be in any sort of context with estate planning. If people aren’t agreeing, you know, what’s going to happen? There’s no documents in place. There’s nothing to put forth your intentions. There’s nothing at all. And people change their estate plan. So even though you told one child, you know, X, Y, Z a couple of years ago, you might have told another child ABC in a later date. And then we’re arguing with who is right. And then when you get into capacity issues, did they even have capacity to speak their intentions? Which is another point about why this needs to be done before you lose capacity. I can’t tell you how many times we’ll have clients reaching out to us saying, you know, my parent is maybe entering the first stages of dementia and they need their child to take care of their finances. But, you know, we as lawyers, we’re not doctors. And you need a doctor to say that they are competent to be able to even put their child in place. You know, you hear these horror stories of a child coming forward trying to take control over their parents assets. But it’s you know, it’s usually not from a bad place. It’s usually from a really good place. But if the person who are trying to help is, for lack of a better term, too far gone, then they’re not going to have the capacity to put someone else in charge. And that can just be a sticky, sticky situation that, you know, we don’t have great answers for.
Brian Skrobonja: So definitely planning ahead is the key there and not waiting until you need something. And you know, that’s human nature, right? We we tend to wait until it’s an emergency, until the house is on fire to where we actually take take some initiative there. So, you know, we’re talking about all these different things and there’s all kinds of different terms that float around out there about what estate planning encompasses. Right. And so I think sometimes people will talk about designations like, you know, I just transferred some titles to my daughter through some gifts. And then, you know, one of the questions I’m thankful that the person at the DMV asked is, “hey, do you want to put a TOD on here?” You know, that’s helpful. But I think that’s really as far as people go right is for the most part, they put TODs On things that put beneficiary’s on things and they think they’re they’re covered. But as we know, that’s not necessarily the case. So what are some things and documents specifically that people need to be thinking about and maybe some differences about what would be better over another?
Jessie Naeger: Yeah, so and it’s true, you know, we have clients all the time call and say, I need to update my will when they really are talking about their trust or I want to change my personal representative when they’re really talking about their trustee. So whenever I speak with a client for the first time, when the first things I like to do is just, OK without going into your estate plan and just explain what a general estate plan package look like, what documents are involved and kind of trying to separate the different documents and also the different roles so that they can kind of try to reconcile that. So let me try to do that really quick. OK. So really, the main document is your revocable living trust. And like you touched upon before, some people here trust and they get they get afraid. They think, well, I’m not you know, I don’t have a ton of assets. I don’t need a trust, which certainly not the case. The trust is really your main estate planning document. It’s going to be the document that says how your assets are going to be divided, distributed, upon your death, who’s going to be in charge. It really is the document that is in place that a lot of people think the will touches upon these decisions. But for us, we really use a revocable living trust as your main estate planning document.
Jessie Naeger: The reason we use a trust as opposed to what I call like a stand-alone will, we use a trust, number one just across the board for probate avoidance. So probate, if you’re lucky enough to not know what that means, probate is a court proceeding and it’s necessary if you pass away with any probate assets. OK, so then the next question is what is probate asset? So a probate asset is asset that you own or that you and your spouse owned that doesn’t have a beneficiary named. So it’s not told what to do. And you can’t just walk into the bank and say, you know, my parent passed away, give me this asset. The bank is of course, I’m not going to do that. So what happens is a probate estate is opened in the county in which you reside. And if you had a will, your will would be filed. If you didn’t have a will, there would still be a probate estate open. It’s just that the laws of your state, Missouri in this case, would designate where your assets go, which again, might not be what you want. So going back to the trust, we use the trust to avoid this probate process by we put the trust in place. And a trust is different because when you sign it, it comes into existence.
Jessie Naeger: Where as your will really doesn’t matter until you have passed away. So your can be the owner or beneficiary of assets during your lifetime. So we’re cutting off those probate assets. The whole concept of having this trust isn’t just to sign the trust and then you’re all good to go. We really need to make sure that assets are going to be running through the trust, which is something that we work with. And I know you work with extensively with clients to make sure we’re actually eliminating probate assets. So they have the trust. So that’s number one document, I promise. The rest of our them are faster. Document number two is what we call a “pour-over will” so if you have a trust, you’re not going to have a “stand alone will” you’re just going to have a “pour-over will”, which is just going to be a just in case document. This is going to be the document that says that if there is a probate asset, which we’re trying to avoid, but if there is a probate asset, pour that asset over into the trust so that the terms of the trust apply. So we like to think about it as like our safety net. It’s there just in case. And then the will is also going to be the document where if you have minor children, that’s where you would name a guardian of a minor child.
Jessie Naeger: The last two documents are more incapacity planning documents, the first of which is that financial power of attorney that says, if I’m incapacitated, I’m appointing someone to act on my behalf in respect to financial matters. And then the last document is what I call the health care document that serves two purposes, the first of which it says that if you are in a persistent vegetative state with no chance of recovery. You don’t want to be kept alive as a human vegetable. Most people want that. And it’s almost like a release from the hospital. The hospital wants to know that you don’t want to be kept alive as a human vegetable for an undetermined amount of time. And then the second part to that health care document, like we’ve touched upon, says that I’m if I’m incapacitated, then I appoint someone to make medical decisions on my behalf. So those four documents are related, but they are separate. So it’s the revocable trust ,the pour-over will, the financial power of attorney and what I just call the health care document. Those four documents are your main basic estate planning documents that are really all of them have separate purposes and all of them are necessary.
Brian Skrobonja: That’s a great explanation. One thing that was said to me many, many years ago that I use quite frequently with clients is explaining that a trust is almost like a box that you can put things in, where a will is just a piece of paper that somebody is reading. So that was always helpful for me. So I just thought I would throw that out. But and that’s what we mean by funding the trust. We’re actually putting things in it while you’re living. And that box is just slid over to the trustees at your death as opposed to this this document that the courts need to read.
Jessie Naeger: I haven’t heard of it in that sort of concept, but that’s a good explanation. Yeah, your will doesn’t mean anything, but trust is an actual legal entity.
Brian Skrobonja: Yeah. And, you know, I hear this and you may probably hear this quite a bit too. And I referenced it earlier, but a lot of people think that a trust is for somebody that has a lot of wealth. And in and of itself, you know, you need to have assets to even put into it. But, you know, I always like to talk to clients, especially when there’s kids involved. Right. But life insurance is an asset. And so regardless of what type of life insurance you own, if you die, there’s a lump sum of money being put into something. And so especially when you got kids, you know that is going to be critical for that money to be held for those children. Right. So on the topic of kids, I guess I mean, what are some additional considerations that people need to be thinking about when they have minor children or even adult children, but specifically with minor children and a trust and an estate that they need to plan out for in case they die?
Jessie Naeger: Yeah. So a couple of different things come to mind. Number one, for minor children, they cannot receive assets under Missouri law outright if they’re under the age of 18. So if you just have a will or you just have a pay on death designation on your bank account or a beneficiary designation on your life insurance policy, and it’s going to a minor child, that’s a problem. It’s not going to be able to go to that minor child. What’s going to happen most likely is that we’re going to have to open up a conservatorship, another court process, so that your child can even be entitled to that money. So that’s number one for me, is avoiding court proceedings and avoiding conservatorships. Minors can’t receive assets. Number two is OK, even if a minor can receive a large chunk of money at age 18. Is that a good idea? For me, the answer is always no, especially at age 18. There’s a lot of different considerations that we talk about, and a lot of it depends on your family situation. But it’s not a good idea to give a child a lump sum of money at age 18. I don’t know what I would have done, but I probably wouldn’t be sitting here with you today if I got a million dollars at age 18.
Brian Skrobonja: Yeah. You never know, money can make you change your path, can’t it?
Jessie Naeger: Right, so figuring out how it’s going to be distributed, maybe distributed when they’re way older. We’ll talk about holding it in trust for a longer amount of time. And then as far as taking care of a child. So another thing you obviously need to think about, and I know a bunch of my friends are young parents, and the first thing they think about when starting a new estate plan is who’s going to take care of my kid? And what happens if something happens to me? So that’s a loaded question within itself. And that position is called a guardian. So that’s who your child’s going to be living with. Hopefully this would never come to fruition. And that’s another thing I want to pause and say. And this is planning. For situations that hopefully won’t come to fruition, everyone has to pass away at some point. So that hard is going to come to fruition at some point. But naming a guardian is just piece of mind stuff. Hopefully it will never be used, but it’s better to have it in place.
Jessie Naeger: The other things you’re thinking about as you just want to you want to make the transition if this came to fruition and we want to make the transition for your minor child as smooth as possible. So you’re looking for someone who already has a relationship with your child, who probably has a similar parenting style to you. I would advise that this person or persons should have the same faith as you, the same values, and everything like that to make the transition as smooth as possible. And then again, I know with with my friends who have young children, they want to name their parents, which I totally understand at my age. Our parents are probably our probably of the age where they could take care of it, but we always want a back up. So that’s another concept with estate planning is who’s the backup and who’s the backup to your backup? These documents can last. They can always be changed. But you want to think about contingencies.
Brian Skrobonja: Sure. One thing I think a lot of people don’t think about, because, you know, a lot of times after a financial plan is put in place, there could be, you know, several hundred thousand dollars of life insurance or several million dollars of life insurance, depending on the needs there. But, you know, some conversations I’ve had with people say, look, if something happens to you, you know, you definitely want to make sure your child goes someplace to all the points you just made. But what about that money? You know, the idea of that money just being handed over to somebody and it has no strings to your your children at that point? And what if they get sued? You know, what if they make some bad decisions? So, you know, the trust idea then comes into play to say, hey, this money is being held in a trust. It’s not in the beneficiary, a person’s name. So if they get sued, then it’s not going to be tied up into their into their estate or their lawsuit. Right. And they’re just managing the money for the benefit of the child. Right. So you really are truly protecting that asset for the kid once the kid becomes of age, is that correct?
Jessie Naeger: That’s fair. And I think what you touched upon and I want to highlight really quick, is that if I create a trust for my children and I pass away and those assets continue to be held in trust for their benefit as opposed to being distributed outright, someone else is managing the trustee assets. They’re the beneficiaries. My children are protected from any outside creditors. So if they have a lawsuit, even if they get divorced, any sort of creditors chasing them, as long as it’s held in trust, it’s protected, which is just like a huge, huge benefit that is often overlooked. You never think something’s going to happen. And I have to emphasize to clients sometimes that we’re not handcuffing your children. They’re still the beneficiary of these assets. We’re protecting them. And it really is asset protection. And why would you not choose to do that?
Brian Skrobonja: Yeah, for sure. I just think all these ancillary things of why a trust makes sense really diminishes the the easy route, I guess, or the cheaper route or some of these attorneys that really do prefer probate. And we won’t get into all the reasons there maybe, but why a trust makes more sense than than just having a basic will, even if you don’t have a tremendous amount of assets but do have kids. One of the things that I’ve run across several times is that especially when there’s a special needs involved, the parents have a hard time coming up with somebody.
Brian Skrobonja: You know, they just I’ve I’ve had clients where they just don’t do their legal work because they don’t know who to name. And I’ve had that happen more than one time because I think part of that is they don’t want the burden to be placed on somebody, which is fair. But at the same time, maybe they just don’t trust anybody to take care of that child the way they would. So, I mean, what do you do in those types of situations? To one try to encourage the client to do something, but two, if they legitimately don’t have anybody, what are some of the remedies for that?
Jessie Naeger: Yeah, so this is a hard question, and I just want to preface by saying with a special needs child or even not a child, perhaps just a beneficiary who is receiving needs based benefits, there has to be estate planning for them to be a beneficiary of your estate plan. If you don’t take care of it, I’ll get it into your question about who should take care of the child. But just from a money standpoint and a benefit standpoint, if you don’t take care of it, you’re just hindering them. I mean, there is so many situations where benefit status can be blown to benefits that that beneficiary really needs. So, number one, it just it has to be done. And there are ways that your beneficiary can benefit from that money while still protecting their benefit status, number one. Number two, it’s hard. That’s probably my least favorite situation when a client really is at a loss of who to name, especially for a special needs child. Who should take care of my child? And it’s an issue that I can’t really solve very easily. My best piece of advice is just to advise the clients on what type of a qualities they’re looking for in this person, to have conversations with people that they’re even considering, to do a little bit of homework. And I just like to say that I’m always afraid that a client will proceed with this plan because they can’t get past that mental block of naming someone.
Jessie Naeger: And at that point, sometimes of the conversation of, listen, I understand you don’t have a perfect candidate. I get that. But it’s better to put someone in place who is sufficient, maybe not perfect, than to not name anyone at all. Because if you don’t need anyone at all, I mean, it’s it’s a real possibility that your child could become a ward of the state. I mean, no one wants that. So it’s a hard situation to deal with. And I wish I had a more perfect answer, but it’s really just advising, making them more comfortable and confident to name someone and to have kind of those uncomfortable conversations with even the people that they’re thinking. Because I have had clients who well, I’m thinking of my cousin so and so, but I’m just not sure that they they would be willing to have a lot on their plate and then they’ll go and have that conversation and they’ll feel much better about it after the fact. And that person. So there is it can go any way. And I think it’s just really empowering your clients to explore this instead of just put it off, which is a basic theme of estate planning. Right.
Brian Skrobonja: This kind of leads into it a little bit, I think, with with just the idea of kids and generations. You know, I talk a lot about generational planning. You and I have had these conversations in depth about things. You know, I’ve written about it in a couple of my books. I just wrote a Kiplinger article about generational planning that can be found just by Google Searching Kiplinger and my last name. It’ll pop up. But, you know, the whole idea of just estate planning typically is that of getting assets from one generation to the next. There’s an old Chinese proverb that goes “rags to rags within three generations”, meaning one generation creates the wealth, one generation spends the wealth, and then it’s all gone.n And so, you know, as as a wealth advisor, somebody that’s always trying to help clients create wealth, I’m also trying to figure out ways to help clients perpetuate that wealth beyond just giving it to their kids. And they blow it within, I think the statistic is nine months to five years, depending on the size of the assets. We could talk a whole podcast just about estate planning. So we don’t need to get to too terribly deep on this. But just from a high level standpoint, what’s the difference between a generational trust versus just a typical basic trust that we’ve been describing up to this point? How would you define that?
Jessie Naeger: Right. So basically, generational trust or generational planning at its basic level, like you described, is the attempt at passing down wealth from generation to generation. And we also call these dynasty trusts. So thinking about you have this dynasty, you’re trying to pass down wealth from generation to generation. So the best way to kind of think about this is an example. So, again, if I if my husband and I create a trust for our children, both of us would pass away. And then the dispositive terms of that trust would say that the assets of that trust are for the benefit of my children. But I’m not going to be forcing out distributions. For example, I’m not going to say at age twenty five you get half of your share. It’s just going to lay in trust in perpetuity and the trustee is going to be in charge of that money and they are going to follow the terms and the instructions that I put forth in my trust. And the money is there for the benefit of my children. But the concept of it is to only draw from it on a need based situation to where the trust says, once my children pass away, anything left in that trust goes to the next generation, I get to specify where it goes after the death of my children. They don’t get to specify where it goes. So there’s a couple of different formats. You know, they could be very restrictive in that perhaps my beneficiaries are only income beneficiaries. They’re only getting the income thrown off from my trust. Perhaps they can only get to the actual underlying assets of the trusts for very specific reasons. Perhaps they can take a loan from the trust that they have to pay back. Perhaps we’ll encourage them to actually add assets to this trust so that we can truly create more wealth that can be passed down from generation to generation. So generational planning is, number one, setting up the trust in its terms. But number two, it’s really administering it right in that first generation so that wealth isn’t lost and so that they’re making good decisions. And depending on how it’s managed, of course, the amount of assets that it’s initially funded with, it could potentially last for a lot of generations instead of just that one where it’s usually lost upon.
Brian Skrobonja: Yeah. And then like and I know you know this, but like I said, I mean, there’s a lot to it. And there’s actually some separate documents that probably would make sense to go along with it with family meetings. And there’s a lot of legacy that’s transferred to the next generation of generations preceding generations outside of just money. You know, there’s there’s principles and foundational beliefs and the kind of the spirit of that gift going forward. Right. But I thought it was definitely worth mentioning. But a couple other things to talk specifically about the need to prepare for these things, because I know just like with you and again, on the legal side, probably a lot more than me, but we’re called on to fix problems a lot of times. Right. There’s a problem. Let’s call Brian. There’s a problem. Let’s call Jessie. Or, you know, the things that I come across with all the time is unfunded trust. You know, people take the time to create a document and they don’t put anything in it because the attorneys aren’t helping them do that or outdated documents. So those are the most popular things that I kind of run across, is that, either they don’t have the legal work or they they did the legal work when their kids were little and now the kids are in their forties with kids and it’s just outdated. But what are some of the biggest problems that you’ve encountered or oversights that you feel like people neglect to add into their legal work?
Jessie Naeger: Yeah. So I like to think of an estate planning law firm kind of in two different sections, the first section of which is the planning side. That’s when we’re putting everything together. And then the second section is really the administration side. A problem has arisen and now we’re actually using the documents. So in the planning side, I think it’s number one thinking through those contingencies. A lot of people just want to name one person in these roles. But like, I like to push for a back up. And if we haven’t pushed for a backup, then we need a mechanism in the trust where someone can appoint a backup. So I can contingency planning is huge. Outdated documents are a problem. I encourage all my clients to, If you’re married, have a conversation amongst yourselves. Has anything changed in your guy’s life that would necessitate a change to these documents? And the answer is no. The answer’s no. But once the answer is yes, I’ll have a review with your advisor, have a review with your attorney. And even if the answer is no, I think they should be reviewed every seven years just to really make sure what’s in the documents is actually what they think is in the documents. I had a client call me yesterday insisting that she didn’t have someone named in her documents and she did, and she only signed them in April. Yeah, a lot of the times I think it’s just like a quick refresher, making sure all the T’s are crossed, all the I’s are dotted, making sure you actually know what’s in your documents. Ask questions. I really try to answer my client’s questions in several different ways if they don’t get them. I think people are hesitant to ask questions because they think they sound stupid, but they don’t, I want to answer the questions. So I think it’s encouraging clients to ask questions because that’s where some oversights happened that I’m not able to anticipate because it’s something that they haven’t told me. On the administration side that’s where a lot of problems would pop up. Like you mentioned, often we see trusts that are unfunded or assets that they think are titled one way or the beneficiaries are one way and they’re not. So you have to make sure the proper documents are in place. But then on the flip side, you have to make sure that all of your assets are title and beneficiary the way you think they are. Family issues are a common problem in estate planning. Like I said, if you have a plan in place, we are much more likely to be able to resolve that issue or provide some guidance. But obviously not having documents in place, my boss, Andy, likes to say, “you don’t know someone until you split an inheritance”. So unfortunately, that’s a real issue. So thinking about when you’re naming people, how are these people going to interact with people, with their siblings? I sometimes have clients who, for example, will have five children and they want to name all five children as trustees. And we have to really talk through those decisions. How does that look like in practice? Is that a good idea? Maybe we can name three of them. I think it’s encouraging clients to not be afraid to hurt the feelings of their children or their beneficiaries and really think about the best choice.
Brian Skrobonja: I mean, people pleasing is always a challenging thing to begin with. But, you know, I think to underscore this, you know, when we talk about financial planning or estate planning, it’s exactly what the name is suggesting. It’s planning. And to all your points of what you think you have versus what you actually have is, in my opinion, a good reason why you should have a team of professionals actually working on your behalf. Right. And so, you know, wealthy families have this thing called a family office, which I know you’re familiar with, but typically that’s for ultra wealthy people. Well, but what we’ve tried to do over the years is create a multifamily office where we can have all the resources that a very wealthy family would have inside of their own house, if you will, and have that be be available to clients. So, you know, a typical client can have access to you, an attorney, or a tax person or a mortgage person, investments, insurance and all these different verticals. And so the client doesn’t have to necessarily be in charge of everything. They’re the head coach. But we have quarterbacks and we have people that can actually come in and help to keep the clients in tune of what they’re actually doing.
Brian Skrobonja: So I can’t underscore that enough is just the need to really look at this as planning looking forward and having a team of people that’s actually helping you develop that plan over time. If we wait till the last minute, it’s kind of like when clients contact me about retirement and they say I want to retire. And I say, OK, well, when you want to do that, well, next month, I don’t have a whole lot of time to I mean, we can help them, but we don’t have enough time, enough runway, as I like to put it, to actually build a plan and do some really good things leading up to retirement. And I think estate planning is definitely the same way. The more time we have to build on things, the better off it’s going to be, especially when you get into Medicare plan and all that kind of stuff, which we won’t get into today. But, you know, as we begin to wrap up our podcast today, maybe for somebody that’s listening to this podcast who doesn’t have legal work in place, what would you say to them to encourage them to actually take some action and get that done?
Jessie Naeger: Yeah. So a couple things. I would say that I understand that it’s a very easy thing to put off. I mean, a lot of our clients will come to us after they’ve dealt with a loved one, passing away without a proper estate in place. It’s a very easy thing to put off. No one thinks that they are going to be the person. Everyone thinks they have an unlimited time to make these plans, which I hope is the case. But the fact is it’s not the case for most people. I also want to underscore that all these documents are changeable. They can change as your situation changes. So there’s no reason to put it off because they change when your situation changes. I would also encourage people like we’ve been talking about. I think estate planning is just an intimidating subject. It’s an intimidating word. So I think breaking apart some of those stigmas that you and I can help clients with financial advisors, attorneys, this whole team that you talked about can make it a more digestible subject and really break it down so that people don’t have to be intimidated and can really be empowered to take control and put this in place. So if anyone is listening and they’re interested in just learning more about this subject, I would encourage them to reach out to your office. You and I work together frequently. Brian knows how to get the ball rolling on this estate planning and we can get you taken care of. And I promise after you have it in place, you will feel just better. It’s peace of mind stuff that really shouldn’t be put off.
Brian Skrobonja: Absolutely. I just I think we covered a lot of stuff. It’s a lot to digest. I mean, we can go on and on and on about all this stuff. Right. Especially since we enjoy what we do. But I just really appreciate you joining us, your insight on things and just sharing your thoughts and on all these different things. I think it’s going to be helpful for our listeners, and I just think it was a good conversation. So I hope to have you back sometime in the future.
Jessie Naeger: Thanks for having me on. I think we touched on a lot of subjects and I hope it was helpful.
Brian Skrobonja: Yeah it was great. So, like Jessie mentioned, if you have any questions about what you’ve heard about today or if you’d like to discuss your estate planning, just go to my Web site, BrianSkrobonja.com, and follow the steps to connect with us on the consultation page. That concludes today’s podcast. I’m Brian Skrobonja thanks for listening to the Common Sense Financial podcast.
