February 17, 2021

Stress Testing Your Estate Plan

It starts with the estate planning stress test that looks at the amount of stress your family would have to deal with if something were to happen to you right now. Things like going through probates, creating your retirement and legacy blueprint, important steps your family needs to take when something happens to you and addressing potential outside influences and challenges the transfer of an estate or lay claim to funds will be covered today.

These are only some of the things you need to consider. In this episode we will run through the 20 questions about stress testing your estate plan and many more! Our focus is always to figure out what your goals are, figure out the best strategies to help you achieve those goals, and then pick the right tools.

In this episode, you’ll learn…

  • Chris’ positive focus for the week
  • Estate Planning
  • Having an income plan for retirement
  • Creating a retirement and legacy blueprint
  • Different legacy blueprint focus
  • The three big risks as it relates to retirement and legacy planning
  • What important steps your family needs to take when something happens to you
  • Why it is important to ensure access to your estate planning documents
  • Do you have standing instructions or provisions for medical tests to determine your level of capacity so that someone could handle your immediate affairs?
  • Basic guardianship documents 
  • Do you confidently know if your assets are subject to government seizure to pay for your long-term care?
  • Personal care plan
  • Advantage of a family meeting where all of the persons involved in your estate understand what needs to happen.
  • Are you 100% confident that your executors or beneficiaries will not subject your estate to probate court to decide who gets your assets? 
  • The benefits of getting your assets are properly titled 
  • Our 10 point estate planning audit checklist
  • Possible disputes over hard to divide assets. 
  • Why not having a proper beneficiary designation is the worst mistake a family can make
  • How to address potential outside influences and challenges the transfer of an estate or lay claim to funds
  • Have you set up controls for distributions for your funds? 
  • Making sure there is continuity in taking care of your parents when something happens to you.
  • Have you established a well-documented succession plan so your families
  • Legacy locker where we can store all digital media

 

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Episode Transcript:

This is the Chris Berry Show. Expert information on wealth, estate, and tax planning for the second half of life. Information that you can understand. Here’s your host, Chris Berry.

Hey, everyone. This is Chris Berry, and we’re going to start the show off with a positive focus just because that’s what we do every week. I find it valuable, especially with everything going on in this crazy world to try to focus on the positive, focus on the things that are within our control. And my positive focus for this past week is that we’ve had a lot of good feedback on the radio show and a lot of people reaching out to us based on what we’ve been talking about. So I appreciate you as the listeners, and I appreciate families reaching out.

Apparently, our message is resonating with what their concerns are. And again, our focus is always to figure out what is your goals, figure out the best strategies to help you achieve those goals, and then pick the right tools. And a lot of times what we’re doing is we’re helping families put together a retirement and legacy blueprint with the idea that they worked very hard to accumulate whatever it is that you have. And now as you move to retirement, you want to protect that, you want to preserve it, you want to make sure that more money goes to your family versus going to the internal revenue Service, versus going to probate, versus going to nursing homes.

So, if that’s something that sounds important to you give our office a call at 844-885-4200. Just like a lot of families have been since the first of the year to figure out how best we can position you to take advantage of what’s going on in the world in terms of the changes in the legal environment, the changes in the tax environment, the political environment, market volatility. There’s certainly a lot going on right now. And if you’re sitting there thinking that, hey, you want someone to help you maybe give you a second opinion on things, give our office a call at Castle Wealth Group. We’re here for you at 844-885-4200.

So, again, my positive focus is that I just appreciate the clients that we’ve had conversations with since the first of the year. It seems like we got through 2020. Still a lot of craziness going on, but a lot of families looked at 2021 as the time they wanted to start their planning. Whether it was retirement planning, estate planning or understanding that from a tax perspective, the window of opportunity is starting to close so they need to take action now. We’ve been really busy the last couple of weeks with people reaching out to us, and a lot of families from this very radio show. So I certainly appreciate that because I like helping families protect and preserve what’s important to them. If I can put more money in their pocket less money in the Internal Revenue services, less money going to probate, less money to nursing homes, you’ve worked hard for whatever it is you have. So I want to make sure that we protect that for you.

So this week, what we’re going to do in our second and third segments is we’re going to continue the conversation that we had in the previous show talking about estate planning. So, that fifth piece of that retirement legacy. That retirement legacy blueprint is all about having an income plan for retirement, an investment plan, a tax plan, a healthcare plan, and then a legacy plan. So if anything is leftover, how do we make sure it goes to the people we want as efficiently and effectively as possible? So in our second and third segments, we’re going to run through about 20 questions. And we call this our estate planning stress test. So, I’m going to go through 20 different questions. I’m going to talk about why it’s important. And this is something that we actually have on our website as well.

With everything going on right now we’re doing a lot of virtual planning, utilizing Zooms and some of the executive orders that allow us to witness and sign things virtually. And if you go to our website, castlewealthlegal.com, it maps out our virtual planning process. Whether we’re helping people plan their estate or planning for retirement, but today we’re going to focus on planning for your estate planning, creating that legacy plan. Because a lot of people it seems like every new year, this is the year they’re going to review that estate plan or put that estate plan together for the first time.

I’ve sat down with a lot of families either over a Zoom or even face-to-face already this year, where they’ve around retirement age have never put together a state plan and now is the time that they want to do it. And I always say that now’s the best time because you’ve made it this far without needing one. So, that’s great. You haven’t had to create your rulebook. Your rulebook for what happens if you get a knock in your head, as well as your rulebook if you were to pass away. Because if you don’t have this rulebook in place, and one of those things happened to you, then you’re relying on the state’s rulebook. And that’s not what really any of my clients want to do. They want to take control. They don’t want to leave things up to the governor or the state to make decisions for them, especially based on some of the decisions that have been made already.

So in our second and third segment, we’re going to get into our estate stress test. And if you want to take your own estate planning stress test, where we look to see how much stress your family would have, God forbid something were to happen to go to castlewealthlegal.com. And then click the button that says virtual estate planning because we utilize the stress test as the first step in our virtual planning process where with everything going on right now, and we don’t even have to meet face-to-face. We can handle this all through the interwebs. So we have a process where you do take that stress test. We have a short conversation about that stress test. And then we have a interactive online estate planning module where we gather a lot of the information through a secure portal. And then based on that we have a Zoom conference or webinar or online kind of phone call where we figure out where you’re at, figure out where you need to go, and we help you get there.

And then as part of our virtual estate planning process, with everything going on right now, it takes us about three weeks to put everything together. And then we can schedule another Zoom with one of our paralegals to review everything we put together, make sure it looks good. And then we sign and execute those documents. And we can do it over FaceTime or Zoom or any type of video conferencing. So if you thought, “You know what, this is the year I want to get my estate plan done,” but you’re concerned about meeting face to face. Don’t worry at Castle Wealth Group Legal at castlewealthlegal.com we have a virtual estate planning process for you. And it starts with the estate planning stress test that looks at the amount of stress your family would have to deal with if something were to happen to you right now. Things like going through probates or where are your documents located or do we have an asset checklist as you’re trust funded?

There’s a lot that goes into creating your rulebook because that’s really what an estate plan is all about. It’s all about creating your own rulebook versus relying on the government’s rulebook. And it’s about creating a rulebook while you’re alive as well as when you pass away. While you’re alive, you need to have those disability documents. So we’ve talked about in the past that financial power of attorney, that medical power of attorney, and that personal care plan that gives instructions on how to care for you if you were to need longterm care.

And then if you were to pass away, we need to have that rulebook to make sure that your affairs avoid probate. Because in Michigan, probate is a five month legal process. Sometimes it takes over a year. It’s time consuming. Like I said, it takes over five months. Can be costly, three to 5% of any assets going through probate typically get eaten up in costs, whether it’s inventory fees, filing fees, or publication fees. And also the public, anyone can see what’s going through the probate process. So most people want to try to avoid probate. And that’s one of the things that we cover on our estate planning stress test is would your loved ones have to go through the probate process?

And when families take this estate planning stress test, what we do is we grade it on a scale of one to 100. The higher the score, actually, the worse off or the more stress your family would have. So it’s kind of like golf, you want a lower score here. And so, I was doing this with a client and I’m not going to mention any client names, but they came in with a stress test score of 86. So that meant there’s a lot of missing pieces in terms of creating their retirement and legacy blueprint. But what I wanted to do in our second and third segments today is review those 20 questions we ask to assign our stress score, just so that you get a feeling or inkling of the things that we’re looking at when we’re talking about creating that legacy, which is one of our big focuses at Castle Wealth Group.

We like to create what we call a retirement and legacy blueprint for our clients that focuses on income planning, investment planning, tax planning, healthcare planning, as well as legacy planning. And really, we’ve been beating this drum, but there’s three big risks we think right now as it relates to retirement and legacy planning. The first one is tax risk. With everything going on with the change in presidency, with this senate flipping to the Democrats, really, the line has been open for Biden to now run with his tax proposals. And so, we’ve been operating under this tax cuts and jobs act from 2018 until what we thought 2025. But now with Biden being President, as well as the Senate flipping to Democrat, it seems like Biden’s going to have a straight line to be able to enact his tax policies, which, if you’re someone that wants to put more money in your pocket versus the internal revenue services, that should be a concern for you.

And so, I think this year is really our last year under this window of opportunity that the tax cuts and jobs act created. So think of the issues that we address in retirement legacy blueprint. Right now tax planning is the biggest risk based on the fact of the pandemic on the Coronavirus Relief Act, based on the CARES Act, based on the fact that Biden wants to put forth another stimulus package in 2021. Obviously, given all this taxes have to go up in the future. So it’s a big risk in the future. But this year, it’s one of your biggest opportunities.

The second big risk is market volatility where if you look at everything going on in the economy with the shuttered businesses, with our governor extending the shutdown till at least February 1st now it looks like, all the unemployment going on, people paid to stay home and not work. The concern is that the market is going to have to reflect this at some point. Now, if you look at the market today, it doesn’t. We did have a drop back in March, but about 119 days later we made a comeback. And a lot of experts are predicting another drop, but this might be more of a long lasting drop in the market. So, especially if you’re around retirement age, market, volatility should be a big concern.

And then the third big concern for a lot of our clients right now is longterm care costs. With the idea that we’re living longer than ever there are certain strategies both from a legal standpoint, as well as from a financial insurance standpoint that we can take to try to minimize longterm care costs in the future. Whether you have a loved one in nursing home now, or there’s things we can do to try to structure your assets in such a way that if you were to need longterm care, like nursing home care in the future, certain things you can do now to shield yourself or protect yourself.

One of those things might be from a legal perspective, you could put together what’s called a Castle trust, which is a form of asset protection trust where we move our assets into the trust. And then once we make it five years because Medicaid has a five year look back period, and Medicaid will help pay for longterm care in a nursing home, not Medicare, but Medicaid will pay for nursing home care. Medicaid has an asset test and looks back five years to see if you moved any money around. And if you have they’re going to penalize you. So one of the things that this Castle trust does that a revocable living trust does not is that it starts that five year clock ticking for Medicaid purposes, where if you and your spouse can make it five years before you need a nursing home, then everything inside of that trust is protected from that nursing home or Medicaid spend down.

And so, that’s going to be some of the things that we get into in our second and third segment today is that if we stress test your estate plan, and again, you might be familiar with stress tests in terms of your investments in the market and how much risk you’re willing to take on. But if you have not stressed test your estate plan, either give our office a call at 844-885-4200. We can send you a link to start that process. Or visit our office online at castlewealthlegal.com. And you can click through to the virtual estate planning process. And we start that process with that estate planning stress test. And if you stick with us through our second and third segments, I’ll go through some of those questions and why those questions are so important as it relates to stress testing your estate plan.

Again, you might stress test your portfolio. Our heads financial professional run those Monte Carlo simulations to see how much risk you have in your portfolio. But when was the last time you stressed test your estate plan. So that’s that’s the offer that we have for you is you can either go to our website at castlewealthlegal.com to start that process. Give our office a call at 844-885-4200 and say you want a stress test your estate plan, and we can send you a personalized link to be able to do that in a confidential, secure manner. Or shoot us an email at contact@castlewealthgroup.com. And we can send you a link to stress test your estate plan.

Whether you already have an existing estate plan, or you want your estate plan reviewed, this is a great way to start that process where you want to make sure that you have a good investment plan, an income plan, a tax plan, a healthcare plan. But this stress test will tell you how much stress your family would have to endure if life were to throw you a curveball. If you were to be incapacitated, or God forbid, if you were to pass away, how much stress would your family have to go through? And if you take that stress test, we can schedule a time to review the results for you so you see how this information applies to you.

So, this has been Chris Berry with Castle Wealth Group. Please stick with us as we continue this conversation and we’re going to start talking about stress testing your estate plan. You might have stress tested your investment plan. But now we’re going to talk about stress testing your legacy plan. God forbid you get hit by a bus. God forbid something were to happen to you. How much pain and anguish and stress would your family have to go through to wrap up your affairs? Have you created your own rulebook, or are you going to be relying on the government’s rule? So stick with me as we continue the conversation.

Hi, we’re Madison and Ryan Berry.

Our dad is Chris Berry from the Castle Wealth Group.

The Castle Wealth Group used to be the eldercare firm, but dad wanted the company to be broader in its scope of services.

To not only protect and preserve assets but to help people grow their assets to prepare for retirement.

As a certified elder law attorney and fiduciary financial advisor, our dad and his team at Castle Wealth Group can help you with lots of important things.

To tell you more, here’s our dad, Chris Berry.

Thanks Maddie and Ryan. Here at the Castle Wealth Group we can help you put together an estate plan to avoid probate, work with you on a tax plan to keep more money for your family, and less for Uncle Sam, and protect you against the devastating cost of longterm care. Our team is here for your family. I invite you to learn more about the Castle Wealth Group at our next free workshop where you will learn the three steps to create a legal financial and tax plan for the second half of life. Call us today to register at 844-885-4200.

The Castle Wealth Group, formerly the Eldercare Firm.

Learn more at the castlewealthgroup.com today.

So, welcome back to the Chris Berry show, and today we’re talking about stress testing your estate plan. So the idea here is that if something were to happen to you, would your family know the steps to take? How stressed would they be if something were to happen to you? And so what I’m going to do is run through 20 different questions. And this is something that we actually can provide our clients is based on how they answer these 20 questions, we assign a stress test score on a scale of one to 100. 100 being as stressed as possible. Zero or one being you have everything in place, there’d be no stress for your family.

So, I’m going to run through these questions. And as you’re listening to the show today, keep track in your own mind to figure out whether your family would be in a position of stress if something were to happen to you. So the first question, if something were to happen to you and your spouse right now, would your family be able to instantaneously access your important information, documents, and instructions to step in and handle your affairs immediately? So, you might answer yes, you might answer no, maybe you’re not sure. But think about it. Do almost like a fire drill. God forbid something happened to you or you and your spouse right now, say a car accident. Would your children, would your loved ones be able to instantaneously step in and start managing things? Would they know where to find your original estate planning documents? Would they know which financial institutions to reach out to start administering your estate?

So, a lot of things to unpack there. One of the things that’s important is to make sure that your beneficiaries, your successor trustees, they have access to these things or know how to get access to these things. Otherwise, they’re going to be in a state of stress because of obviously the events going on. But then even added stress if they cannot step in immediately and start taking action.

So number two, if they could access that information, do you know what their first course of action would be? So this is something that we coach our clients on and coach our clients’ families on. We have successor trustee workshops that typically we do twice a year. We have a successor trustee checklist that we give as part of our estate planning portfolio to our clients and their family members. So they know the next step to take if something were to happen.

Number three, with all the interaction we have every day driving, exercise, etc. If you were to become incapacitated from a medical condition or accident, do you have standing instructions or provisions for medical tests to determine your level of capacity so that someone could handle your immediate affairs? So the point of this question is understand that we don’t just go from healthy to passing away. A lot of times there might be incapacity where we might have diminished capacity. God forbid we got in a car accident, and now we can’t manage our own affairs. Or if we were to have a stroke, and now we can’t manage our own affairs. Do you have medical directives that appoints someone to be able to make medical decisions, and then do they know what medical decisions they’re supposed to make? Do they have access to those documents. So, it’s one thing to have those documents signed and executed, but it’s another to make sure that your loved ones or the people you’ve appointed can access those.

Number five, and this may not apply to everyone. But while basic guardianship documents may suffice for those who will take care of your children, do you have the utmost confidence that your successor trustees are informed as to the care of your children and how to execute guardianship? So this is really for those listeners, those clients who have minor children, children under the age of 18. In Michigan, the age of majority is age 18. So if you do have young children, one of the most important decisions that you can make, or you have to make is who would be a guardian? Who would take care of your children, serve as a substitute parent, if you are not available. And so, that’s a role that we named in the will.

So typically, we talk about a will being a poor over will where it should never really see the light of day. But when we’re talking about minor children, we need to make sure that we have appointed guardianship and that’s going to be something that’s done inside the will. And then a lot of times you’ll also have a trust because the trust will manage the assets while the guardianship will appoint that substitute parent. And it could be the same person you name as guardian as well as trustee or it could be different people.

So that brings us to number six. Most Americans will have some type of assisted care or assisted living costs in their lives. Do you confidently know if your assets are subject to government seizure to pay for your longterm care, so that your family members will not lose their inheritance? So this is really what elder law is all about. The idea that estate planning is planning for what happens if you die, and that’s important. We haven’t figured out a way around that. But the concern is what happens if you don’t die, you continue to age and then you face all the issues that go along with aging. Have you put together a plan to navigate the longterm care maze?

And so, we address this in a couple different ways. First, one of the things that we do with our clients is put together what’s called a personal care plan, a personal care plan. And a personal care plan is a document that gives instructions not with regards to end of life decision making. What the personal care plan talks about is longterm care decision making. So, not if you’re on your deathbed in a coma and someone needs to decide whether to “pull the plug.” That’s covered in the medical power of attorney.

But what the personal care plan does is gives instructions where if you were to need longterm care what’s that going to look like? Are you going to be kept at home as long as possible? Are you going to go into an assisted living? Certain foods you like or don’t like, certain hobbies, certain… Maybe you have a certain faith, a religious faith and you want to make sure that you have access to the Bible, whatever it may be. Maybe you want to listen to music. Maybe it’s a specific type of music, maybe it’s Christian music that you want to listen to. Maybe you get coffee, maybe you hate coffee, maybe you get tea at two o’clock. So these are the things, the habits, that makeup who you are.

And again, understand that we typically don’t go from just healthy to passing away we go through this aging process. That’s why we think this personal care plan document is so important. Making sure that we provide guidance on what we need, or want or desire in terms of longterm care. Again, it’s not end of life decision making. That’s in the medical power of attorney. Most estate planning attorneys talk about that. What we’re talking about is longterm care planning. And we have a questionnaire we give our clients to put together this personal care plan. So that if you were to need longterm care, your loved ones, your trustees, your powers of attorney, they know how best to craft that care for you, that longterm care.

That brings us to number seven, estate planning can be a sensitive subject, have you ever had a family meeting where all of the persons involved in your estate understand what needs to happen? So this is something that we do often for our clients is we have what we call a family meeting. And in this family meeting, typically what you do is you bring your family into our big conference room. It fits about 20 people. You don’t have to bring that many people, especially with a pandemic and everything. But in this family meeting, what we do is we don’t go into the size of your estate, or how much money does mom and dad have. But instead, what we’re talking about is okay, if something were to happen to mom or dad or the clients, and we’re dealing with loved ones, what are the steps that need to happen?

We almost have like a fire drill. Like okay, imagine mom or dad or your clients got hit by a bus tomorrow, what are the steps that need to happen? And so, this family meeting, it’s almost like a test run or a fire drill of okay, if something were to happen, here are the roles, here are the responsibilities, here are the things that need to happen. And what we found is that these family meetings, they really give a sense of confidence and clarity to the family so that if something were to happen they know exactly what to do. And it gets back to one of the first questions of would they know? Would your loved ones know the next step to take if something were to happen to you? And one of the best ways to establish this is to have that family meeting.

If this is something that your state or elder law attorney hasn’t offered you, then I suggest give us a call. Because we think this is one of the most important items. And what we can do is review your current estate plan, do an estate planning audit, see if there’s anything else that’s missing. So if you’ve never had a family meeting or your attorney hasn’t offered the family meeting option for your family, maybe it’s time to get a second opinion and estate planning review. And you can do that by giving our office a call at 844-885-4200.

Number eight, sometimes the court decides who gets your assets, even ones that you have assigned to beneficiaries. Are you 100% confident that your executors or beneficiaries will not subject your estate to probate court to decide who gets your assets. And again, this is one of the most important concepts and probably one of the base reasons why most people move forward with estates and legacy planning is that they want to avoid probate. And too often we think people, we see people that they think they have a plan that will avoid probate. But when we do our estate planning audit, where we take a look at where you’re at, and figure out where you want to go, as we’re doing that, as we’re talking about the different assets, we find that something ends up going into probate. Even if you have a trust, that trust has to be funded properly.

I have a colleague of mine, and I’m going to quote him. He says that 94% of living trusts fail because they’re not funded properly. I’m not sure where he gets this statistic. But to be honest, I’m going to agree with him. When clients come into our office, and they’ve done an estate plan a number of years ago, they might even have a trust. But as we go through it, I’d say nine times out of 10 there’s something that’s not funded properly. Whether the real estate wasn’t funded into the trust properly, maybe using a ladybird deed or if it’s an asset protection trust deeding the property directly to the trust. Or maybe the IRAs weren’t handled properly or the retirement accounts weren’t handled properly. And it’s easy to screw up because funding a trust, it’s not something that people spend a lot of time talking about.

Most law firms will give you what’s called a funding letter where they just say… It’s basically a CYA letter where the law firm saying, “Hey, we set up this trust. You might have spent 3,000, or 7,000, or $10,000, on this trust. But now it’s your responsibility to go and fund it, and make sure that it actually works. So that’s where we take a different approach where we work with you to make sure the trust actually gets funded. We want to make sure that if you’re putting forth the effort to put together this well drafted trust, we want to make sure the trust is funded properly. We want to make sure that the assets are actually flowing into the trust.

And too often, we found that a lot of these attorneys and law firms, I don’t know it’s out of laziness, or just lack of manpower, or support staff, or a support team. But they don’t help individuals fund the trust. And what happens is life happens. Working with these financial institutions to change beneficiaries and everything, it’s a pain in the butt. Or maybe the trust was funded at one point, but now a number of years went by since you reviewed that trust. Maybe about a property up north, and it was never titled in the trust. And now, well, it’s going to end up going into probate.

So understand that just by having a trust, that doesn’t ensure that you’re avoiding probate. You need to make sure that the trust is funded properly. And if you have questions on whether your estate plan and trust is funded properly, we’ll offer a free review. Give our office a call at 844-885-4200. Again, 844-885-4200, we can offer that free estate planning audits. And one of the things we’ll look at is whether your trust is funded properly, so that you’ll have peace of mind to know that God forbid something happens to you that your estates, your affairs will avoid probate court and go where they’re supposed to go. The assets will go where they’re supposed to go.

Number nine, so while various trusts are an excellent protection for assets, items such as accounts and property must be funded or titled in the trust. You’re completely certain that all of your assets are properly titled, including joint with right of survivorship. So this is what we’re talking about. If an asset ends up going into probate, typically, it’s because it’s not funded properly. And again, most firms don’t really help people fund their trust, and that’s something that we really, we think it’s vitally important. We have probably more team members than most law firms, or investment firms, specifically, because we want to make sure that if you spend the money to get a trust, we want to make sure that trust is effective, and that it’s funded properly.

So one of the things we do is we go through an asset checklist, and it’s a little bit of a pain in the butt. But we need to go through and gather up every asset, learn how it’s titled, grab the account numbers, and then we’ll work with you and create the beneficiary designation forms or the asset transfer forms. Because, again, think of a trust like a suitcase. While you’re alive and well you’re holding on to the suitcase, but God forbid you pass away we want to make sure there’s stuff in that suitcase going to your successor trustee who can then distribute the assets to the beneficiaries, thereby avoiding probate.

So that’s why, again, funding the trust. It’s one of the most overlooked steps when we see family setup an estate plan. And that’s why we work so hard with our families to make sure the trust is funded. And if you’re thinking or having second thoughts about your current estate plan, give our office a call at 844-885-4200. Again, 844-885-4200. What we can do is set up a free initial consultation where we figure out where you’re at, figure out where you need to go. If you do have a current estate plan, we’ll run it through our 10 point estate planning audit checklist to see if you’re all set, and if you are, great. And if not we can work with you to make sure you’re all set. So stick with me as we continue this conversation.

Hi, Madison and Ryan Berry here from the Castle Wealth Group, formerly the Eldercare Firm.

Our dad is Chris Berry.

He’s an attorney and fiduciary financial advisor, which means he helps families plan, protect, and preserve their assets.

The entire team at the Castle Wealth Group can help you with lots of important things. To tell you more here’s our dad Chris Berry.

Thanks Maddie and Ryan. Here at the Castle Wealth Group we can help you put together an estate plan to avoid probate, work with you on a tax plan to keep more money for your family and less for Uncle Sam, and protect you against the devastating cost of longterm care. Our team is here for your family. I invite you to learn more about the Castle Wealth Group at our next free workshop where you will learn the three steps to create a legal, financial, and tax plan for the second half of life. Call us today to register at 844-885-4200, 844-885-4200 or visit us at castlewealthgroup.com

The Castle Wealth Group, formerly the Eldercare Firm.

Learn more at the castlewealthgroup.com today.

So, we’re talking about stress testing your estate plan. Most people have done estate planning at some point during their life. A lot of times it’s a will that’s five or 10, 15, 20 years old, you put it together when you’re flying without the kids for the first time. Or maybe set up a trust five, 10 years ago, and things have changed, laws have changed. Maybe you have an old revocable trust. And now’s the time to start thinking about an asset protection trust. Wherever you’re at in terms of your estate planning process one of the things is we have a 10 point a state planning audit process where we can take a look at your current estate plan. And again, I’ve done this thousands of times for the last 15 years. I have that thick binder. We run it through our 10 point estate planning audit checklist, figure out where you’re at, and figure out where you need to go if anywhere with your estate planning.

One of the things that we can do in addition to that estate planning audit is to stress test your estate plan. And so, we ask about 20 questions. You can do this online, and you can get a score based on that. Anywhere from one to 100. The higher the score, the higher the amount of stress your family would go through if something were to happen to you. And you can get that right on our website at castlewealthlegal.com. You can stress test your estate plan, and then we can talk about it. And then we can make the updates so that your family wouldn’t have to go through all the stress and pain and probate of a messy estate. That’s not the legacy that you want to leave. So feel free to go to castlewealthlegal.com to start that process or give us a call at 844-885-4200. Because estate planning it’s really about peace of mind. And so, if you stress test your estate plan now, then that ensures that your family won’t have to go through all the pain, suffering, and stress of a messy estate, God forbid something happens to you.

So continuing on, number 10 for questions, families are more likely to have disputes over hard to divide assets. Do your legal documents specify how you’d like to address hard to divide assets such as homes, cars, and other tangible assets? So one of the important things is making sure you have what’s called a personal property memorandum. So if there’s any personal items you want to go to specific people, you make sure that that’s included as part of your estate planning portfolio. But then you need to think about things homes, what are you going to do with a home. Is it supposed to be sold? Can one of the kids buy out the other child? These are things that should be taken into account in your estate plan.

Number 11, one of the worst mistakes a family can make is not having a proper beneficiary designations. Are you fully confident and have you recently checked all your beneficiary designations make sure they’re up to date, including recent purchases, changes in your life or updated legal documents? So understand that beneficiary designations and beneficiaries and trusts and wills, those things may need to be changed. Maybe now we need to include the grandchildren or you had a falling out with one of the child. So maybe we should readjust that. Or maybe we’re leaving things out right to the kids. And now they could go to the in-laws who we call the outlaws versus going down to the grandkids. So those are all things that should be included as part of the estate plan.

And then number 12, when it comes to money, the worst in people can sometimes appear. It is not uncommon for an outside person to challenge the transfer of an estate or lay claim to funds. Have you addressed all of the potential outside influences challenges within your state? So that’s where having a well drafted, well coordinated state plan is so important so that there is no room for any challenges or outside influences. And we can even include things like no contest clause. So if one of the beneficiaries were to fight this and say they should get 100% of everything, and they take it to court and lose, maybe they get knocked out of the trust. Something to think about.

Number 13, not all people can manage money, especially large sums. Children may need distributions periodically to cover living needs. Picture your beneficiaries with large sums of money. Have you set up controls for distributions for your funds? And this is a big one. The idea is that, especially if you have minor children, you don’t want it to go out right to them. My kids, Ryan and Maddie are 10 and eight. If they were to inherit a lump sum of cash, they might spend the money on stuffed animals and Legos, which I think would be cool, but it’s probably not the best use of the money.

Now that said, I’m young enough to remember what I was doing 18 to 25. And if I inherited 5,000, 50,000, or 500,000, I would have been the coolest kid on campus, but that probably would have been my only year in campus. So the idea is that if you do have beneficiaries who maybe wouldn’t be the best in terms of managing a lump sum of cash, we need to build on some structures. Maybe we appoint someone else to manage the money until they reach a certain age, or we could build in things like only a certain percentage of the trust comes out every year. Or we could match it to things like W2s, match whatever the W2 is. So, there’s different ways through a trust that we can build in protections.

Number 14, laws change from time to time. Language in some legal documents can become stale and need updating. Changes in the law can also have positive effects on your estate plan. When was the last time you reviewed your legal documents to see if any legal changes or life changes would benefit or harm you and your family. So this is the thing a lot of families don’t realize is they assume that an estate plan or a trust, once you set up, it’s one and done. But unfortunately, things change, and maybe not necessarily your family, but the laws change.

For example, if your estate plan is older than 2020, well, we had the SECURE Act that had a dramatic effect and how we leave IRAs to the next generation. And if your estate plan doesn’t have the right language inside of the trust, and you’re leaving IRAs through the trust to your beneficiaries, understand that could have a dramatic tax consequence if it’s not planned for properly. So if your trust is older than 2020, and you have retirement accounts greater than 250,000, please give our office a call at 844-885-4200. So we can make sure it has the requisite language or the required language to make sure that you’re not leaving a tax time bomb with those IRAs to the next generation.

Likewise, if your estate plan is older than 2012, without even looking at it, I know your financial powers of attorney documents need to be updated. And if your estate plan is older than 2010, your trust should be updated for the Michigan trust code. And if your state plan is older than 2004, I know it’s missing the medical directives, or more specifically, the HIPAA authorization. The release of medical information people that you named in the document. So understand not only may your situation, may your assets change, but also understand that the laws change. And because of these changes in law, there’s certain updates that need to be made in your estate plan.

That brings me to number 15. Items like points from credit cards, airline miles, and rewards are becoming more popular. Sharing passwords is illegal in some cases and could cause an issue of transfer of digital assets. Would your family be able to capitalize on your rewards or access your digital assets if something were to happen to you? So this is where we’ve created an online storage system for our clients so that all of that information can be saved. And if something were to happen, could be turned over to the successor trustee.

That brings me to number 16. A lot of people have pets such as cats, dogs, birds, fish, and many others. Have you designated what will happen to them upon passing or incapacitation including conversations with who may care for them? So I was meeting with clients just last week. They don’t have any children, but they have two younger dogs that are really their fur babies. And so, as we’re talking about the distribution of assets I brought up, “Well, who’s going to take care of your two cute adorable little dogs.” And then we had a conversation. So one of the things that we’re going to do in their plan is we’re going to carve out a portion of assets to be held for the benefit of the dogs. Because they know that between their vet bills and everything, they think maintenance of the dogs can be about 1,500 to say $2,000 a year between all the vet bills and the prescriptions they’re on. They’re both adopted.

And so, they want to make sure that they’ve set aside money to care for those dogs. And more importantly, they’ve set aside that guardian. Just like how you have a guardian for minor children, we need a point where these pets are going to go and make sure we have conversations with those people, so that it’s not a surprise. So there’s money set aside to care for them. And then they’ve appointed someone to care for those animals. And that’s something that could be done inside of a trust. Now I’m not saying you go the Leona Helmsley route where she had a dog named Trouble that was left about $2 million. That might be a little excessive, but it’s something to consider.

Number 17, some of us care for our parents or maybe they’re just elderly and will need care at some point. Do you have any instructions of whom will care for them and what they will need? So not only do we see people caring for their young children, but these days we see that sandwich generation where maybe currently you’re caring for a loved one, for a parent, something like that. And God forbid something happens to you, who’s going to step in and serve that role? And now that should be maybe something as part of your, that parents, or elderly loved ones plan. But you should have a plan in place as well. So if something were to happen to you, who’s going to step in and provide that care? Maybe you’re helping out financially. Will that financial care continue? Maybe you’re helping out in terms of your time. Have you built in a backup, so if something were to happen to you, your loved one would continue to be cared for?

Number 18, creditors and lawsuits can lay a claim on your assets, including your home, cars, or other tangible items. Are your assets protected from all creditors or claims? So this is building an asset protection for you. And there’s different things we can do like if you own a rental, we can do renter’s insurance. You can have an umbrella policy. But understand the insurance, it’s just building up sandbags versus there’s certain legal structures that if creditor and lawsuit protection is a concern, we can set up certain legal structures such as asset protection trusts, like Castle Trust, or LLC is a limited liability companies where once the assets are inside of this protected legal entity, they’re protected from creditors, protected from a personal injury attorney coming after you because there’s a slip and a fall. And this is becoming more and more prevalent. You can’t drive around Metro, Detroit without running into least a few billboards with these personal injury attorneys. So law schools keep pumping out attorneys and they’re looking for cases. So, there’s certain things you can do to protect your assets from that liability.

Number 19, businesses come in many shapes and sizes. Even hobbies can have transferable value. People find value in just the intellectual property you have created. Have you established well documented succession plan so your families can realize the full value of your hard work? So really, this is talking about business interests. Whether it’s consulting, whether it’s rentals, maybe you have a family business, maybe you have a practice like a doctor, or a lawyer, maybe you own restaurants. But make sure it’s protected inside of some type of corporate shell, whether it’s a C Corp, S corp, or LLC, but then make sure that there’s a succession plan. So God forbid, something happens to you what’s going to happen with that company? How do we transfer that company to either the other members, or to the next generation. That might be part of an operating agreement and/or a buy, sell, or a succession plan?

Number 20, and our last one in terms of stress testing your estate plan, leaving a legacy means sharing moments in your life that have meaning. Maybe a lesson learned, messages, or an experience. Are your photos, videos, memories, or some of your experience subject to getting wet, burned, or destroyed over time to make them inaccessible? So one of the things that we can create is basically a legacy locker where we can store all that in the digital world. And I’m not saying that’s the only way to do it. But it’s important that this stuff is backed up.

One of the things I’ll share that I’m doing even personally is because it seems like at least with my generation, we’re capturing a lot of these memories digitally and capturing them on our iPhone. It’s so easy to carry around your phone and just snap a picture of the kids. But what my family does is each month we then upload those to a physical print box. So, not only do I have a printed version of these memories, but also a digital as well. I think that’s the route to go is to not just have a digital platform, make sure that digital platforms backed up. And that’s what we’re talking about with our legacy locker. But also it’s important to have that print platform as well. And I have them on the coffee table, these books, so it’s very easy to look through them and I can go back and relive what happened in say February of 2019. It’s just a little tip not just to have digital memories, but also physical memories because there’s nothing like holding those books.

So, that’s all about stress testing your estate plan. And so, if you have an estate plan, it would be good to go through that stress test. You can access it right on our website, castlewealthlegal.com. If you don’t have an estate plan, well, guess what, it’s going to cause your family a lot of stress if something were to happen to you, you might be interested in seeing that score as well where you can walk through that 20 point questionnaire, and based on that be assigned a score. And then once you’ve done that, then we can set up a virtual meeting via Zoom or phone call where we can review this with you. Figure out if there’s anything you want to address, and then figure out where you’re at and figure out where you need to go with your planning.

Right now, we do have a virtual process where we can handle this all via phone and secure portals and Zoom, even getting the documents signed just over a webcam. We have laws right now that allow us to do that. We don’t even have to visit our office so we can help people throughout Michigan create their estate plan. And first, we start with stress testing your current plan if you have one. Or if you don’t have a plan, figure out how much stress it would cause your family if something were to happen to you. And that gives us a good conversation piece for us to then schedule a consultation, where we figure out where you’re at, figure out where you need to go. And this can be done virtually. And if you go to our website castlewealthlegal.com you can get started on that process. Or you can give our office a call at 844-885-4200.

I know that for a lot of people, this is the year they wanted to put together that plan. It’s estate planning. It’s one of those things that’s super easy to procrastinate. There’s always things that are more exciting to do. You’d rather spend your money on a new TV or deck or something like that. But estate planning is one of those things it needs to be done. And it’s not just for you, it’s really for your family. So give us a call at 844-885-4200. It’s been Chris Berry. Make it a great week. Take care.

Learn more about Chris Berry and how he can help your family by visiting online at thechrisberryshow.com. That’s thechrisberryshow.com You can also call Chris Berry at 810-355-2584. That’s 810-355-2584. This program content reflects the opinions of Chris Berry and his guests, not Castle Wealth Group or advisors excel and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment or legal advice or a recommendation regarding the purchase or sale of any security or to follow any legal or tax strategy. There’s no guarantee that the strategies, statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. All investing involves risk including the potential for loss of principal. There’s no guarantee that any investment plan or strategy will be successful. We recommend that you consult with a professional dedicated to your needs. This program is furnished by Chris Berry and Castle Wealth Group.

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