February 25, 2022
Big Picture Things We Can Do to Protect Our Money but Still Try to Keep Up With the Inflation |Weekly Wednesday Wisdom Webinars

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm www.wisdomwebinar.com to register or give our office a call at 844-885-4200.
Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.
In this week’s webinar, Attorney and Advisor Chris Berry of www.castlewealthlegal.com answers the below questions.
- 0:00 Introduction / Positive Focus
- 4:32 While knowing the cost of a nursing home is instructive, it would be helpful to know the total cost of long-term care. It would help us understand the true risk
- 16:16 Should I do a Castle Trust?
- 19:26 How do you recommend reliable, honest, support? FDIC vs brokerage cash accounts? Ratings for insurers? Are there agencies that insure against losses from brokerage and financial advisors? You are a CELA and CFP, they test knowledge but do they monitor performance fraud?
- 29:27 We are preparing to refinance our home right now and it’s in a trust, the mortgage company is giving us a hard time with the home being owned by the trust, what are our options?
- 32:25 You had mentioned in your last email, and we’ve seen the news about inflation, what are some big picture things we can do to protect our money but still try to keep up with the inflation?
- 35:07 Is Bitcoin a good investment?
Visit our websites to learn more
https://michiganestateplanning.com/
https://www.castlewealthlegal.com/home
Episode Transcript
These workshops every week every Wednesday at one o’clock and they’re recorded and they are put out on youtube so if you miss an episode you can always catch up on it and these are really just workshops for you where we talk legal financial and tax planning and we’re just typically answering questions or talking about what’s kind of going on in the world. So there’s no power points or anything there’s no sales pitch to get you to take action or anything, it’s just hey I’m here answering your legal financial and tax planning questions and this is coming from a a certified elder law attorney I think there are 17 of us in my state of Michigan as well as a certified financial planner and I think there might be two of us with those two designations in Michigan and maybe a handful of us across the nation so plus I was a adjunct professor so I taught a lot of the stuff to law school students as well so if you have questions you want answers to this is your time to get those questions answered and already had some questions submitted ahead of time.
So I appreciate that and I will go ahead and share my screen and before I do that I always like to start with a positive focus something positive that happens or is happening and my positive focus twofold both family related well threefold I guess my daughter she got selected to play with the select soccer team so her team that I coached this year went undefeated and won the league championship and then they called her up to see if she wanted to play with the select team so that was pretty cool opportunity and then my son he’s just like really taking to swimming he’s in a swim kind of like a precursor to a swim team and so while I was taking my daughter to soccer last night my son had swimming so it’s kind of cool just like seeing the kids excel at stuff and then another positive focus is just all the family stuff we have coming up along with my parents who live four houses down we’re going to Chicago this weekend to go to the aquarium and science museum and we have the Detroit zoo lights event scheduled and everyone’s birthdays is coming up and thanksgiving just a lot of things going on.
So all good all good so pretty excited about that and with that let me go ahead and share my screen and again if you do have questions please put it into the Q&A section and I’ll go ahead and answer those questions as they pop up and then if something’s unclear feel free to again put it in the q a or feel free to also put it in the chat and with that let me go ahead and try to share my screen assuming the technology is working with me oh see I’m at my satellite office right now so sometimes it’s a little sketchy.
Technology is great except for when it doesn’t work and so right now it doesn’t appear to be working all right connect iphone iPad and when prompted let me try this oh there we go all right well weird way to do it but we got there okay so our questions and again if you do have a question please put it into the Q&A, so the first question here this is kind of a follow-up question last week while knowing this here chris while knowing the cost of a nursing home is instructive it would be helpful to know the total cost of long-term care it would help us to understand the true risk
All right so I’ve talked about the cost of long-term care more specifically nursing home care just because that’s kind of the devastating cost of long-term care but there’s a company and they do long-term care insurance so take it for what it’s worth but there’s a company and if you go to www.genworth.com they do a annual long-term care study and so basically what we find is what I call the elder care journey here and so what we find is first of all you start off living at home independently and we always figure out okay what type of how much help do you need and so we start off living at home independently and then as we begin to age we need more and more in assistance and the cost increases as we go down this long-term care journey so living at home according to Genworth and at least according to just kind of my experience of doing this last 16 years.
Typically it’s gonna cost you about one to three thousand dollars per month if you’re buying a couple hours per day a couple times per month generally home care costs are about 20 to 30 dollars per hour okay and so that’s where kind of that long-term care journey really starts and then we might move into independent or assisted living and these are the lines between these are starting to gray they’re starting to blur because initially we had retirement communities and then we had assisted living communities but the retirement communities got tired of seeing people transition to the assisted living communities. So they started to bring in home care and that type of thing but here you’re probably looking at on the low end maybe two thousand dollars per month to the beginning of assisted living I would say is about five thousand dollars per month and this is typically like an apartment or hotel type environment with additional services provided then you get to assisted living with memory care which is the high end of assisted living.
And now you’re looking anywhere from five to maybe eight thousand dollars per month so these are places like Arden court another memory care communities and what we find at least is typically people will spend about one to three years here one to three years here whether it’s independent slash assisted living and then the average stay in a nursing home this is about two and a half years and this is kind of hard data from Genworth average state nursing home is about two and a half years the average cost of a nursing home in Michigan is about eight to twelve thousand dollars per month and we know current statistics say one out of two people will need nursing home care. And I know or according to statistics three out of four will need some form of long-term care whether it’s home care assisted living or nursing home care okay so yeah the total cost of care if you look at it fully maybe one to three years of needing home care that could run one to three thousand dollars a month one to three years of needing assisted living which could run one to or could run two to eight thousand dollars a month on the memory care side and then nursing home care one out of every two people will need nursing home care that’s on average it’s gonna run you two and a half years obviously I’ve had clients that never set foot in a nursing home.
And then I remember a woman came up to me at a workshop and said her mom had been a nursing home for 19 years that’s certainly not the norm the average is two and a half years and I checked the average for a nursing home room in Michigan as of 2020 and this is just average but right now we’re talking about 97 or 9 9 733 and that’s for a nursing home room in Michigan the average assisted living is 4200 and the average home care provider this is actually higher than than I typically say is 4767. so those are the numbers as of 2020 for Michigan so home care it’s going to run you 4700 assisted living 4 200 on average and then a nursing home 9733 as of 2020. that’s across the whole state of Michigan I remember I took a call from a individual earlier this year and their mom was paying 14 500 a month for the nursing home they were in in Michigan. So it kind of runs the gamut and that’s why it’s important to work with a certified law attorney this is what we do is we help families navigate this long-term care journey so it’s a piece of what we do at castle wealth group and it’s I think this along with taxes and now probably inflation are probably the three biggest risks that a lot of families face how are you going to navigate this elder care journey so a question can I replay this session later yep so everything all of these wisdom webinars will be on our Youtube channel if you want this specific one and can’t find it on our Youtube channel which is sometimes I can’t find what I’m looking for on Youtube just send me an email or reply back to the email and as soon as this is done I will make sure to send you a link so you can watch it again or if you want to send it to anyone else we certainly appreciate people subscribing and just getting educated on this and again I think long-term care costs we’ve been banging the strum along with taxes it’s one of the biggest concerns for a lot of the families.
And a lot of times it takes seeing a family member go through this before it becomes a concern but it should be something that’s high up on your list of things I need to do to as I move into retirement and plan for the rest of my life what are the things I should be concerned about and it’s very easy to put your head in the sand and just pretend it’s not an issue but it certainly is an issue so yeah let me just make sure I answered this question yeah we talked about nursing home yeah total cost of long-term care it really depends and it depends on your health so I have some families who never have to pay any type of long-term care costs and then I have families there have a loved one diagnosed dementia alzheimer’s parkinson’s and it’s a long road so it’s a little bit different for everyone but that’s why I think it’s important to know the averages and then also just take some thought and planning for it I’m not saying to run out and get long-term care insurance or anything but just understand the threat and understand what your answer to that threat’s going to be and really it breaks into a couple different options really you have if long-term care is a concern you have kind of financial slash insurance options and then you have kind of legal options as well and this is where of course our asset protection trusts come into play with regards to financial insurance options we’re not a big fan of pure traditional long-term care insurance for a variety of reasons.
But here you might look at asset-based long-term care options which we went over before cash value life insurance or index universal life that can provide tax-free income and then a death benefit that could double as long-term care and then also you have fixed index annuity options with kind of long-term care riders so there’s again and we always focus on kind of what are you trying to accomplish so let’s figure out what your goal maybe long-term care planning is a goal then let’s talk about the strategy oops I can spell so what’s the strategy we want to utilize and then pick which tools because these are all of these are just tools and unfortunately, I see these tools misused I saw I had a client come in we just do their estate planning.
We don’t do any of their financial or insurance or tax planning work and they were sold a asset-based long-term care plan that I think they it was just complete completely missing the boat where it wasn’t taken into account the entire planning scenario so a lot of time in just taking one step back we have these different tax buckets and a lot of times taxes are driving a lot of the discussions right now and you have non-qualified accounts these are like your whoops like your checking savings you have tax deferred this is like IRAs 401ks and then you have tax free like roth and iul cash value life insurance 529s et cetera so most people think at the end of the day where are taxes going taxes have to go up and so what that means is the first account we should spend money down is the tax deferred typically followed by the non-qualified and then the last thing we want to spend is tax free.
So for example for a majority of our clients when we’re doing some type of asset-based long-term care plan where we’re taking a chunk of money and turning that into a long-term care benefit or a death benefit where do we want that money to come from we want it to come first from here right and so unfortunately this is just sold by some insurance guy they did the asset-based long-term care out of here when they completely missed the boat and had the opportunity to pull the money from the IRA. So it’s not just about like all right I want this tool it’s making sure it fits into the strategy and accomplishes your goals so that part is a little frustrating but yeah so long-term care is a big concern and I think it should be moving forward especially with longevity I just met with some clients a husband was sitting right there and he said his mom passed away at 104 so and dad passed away at 95 so there’s some good genetics.
Here’s a question coming in considering insurance commissions complexities of annuities insurance policies is castle trust cheaper and simpler alternative so just kind of boiling down the question should I do a castle trust or should I do these I again it’s get back it gets back to what your goals are neither is a perfect tool like a castle trust even though I think it’s pretty darn cool it’s not a perfect tool for everyone depending on what your situation is like even my parents my parents have asset-based long-term care and a castle trust so it’s not one or the other it’s all about figuring out what is your goals figuring out the best strategy and then the tools and that’s why again it’s it’s so important where you get your advice from.
And this is one of my big frustrations in life not that I don’t know and that’s a sound not to to our own horn but understand that there’s different levels of advice so at the bottom level you have vendors these are people that are just going to sell you something and these are like your insurance salesman they work for a company their only purpose is to sell insurance this is also like the vanguards of the world like they’re just custodians they’re not giving you advice and you even have attorneys here your trust mills where everyone that walks in gets a trust and again that’s that’s not our approach at all so this is like do-it-yourselfers and I see a lot of not to pick on the engineers in the world but they want to do it themselves and think they’re saving money.
But they’re just don’t know what you don’t know and then you have a step up from there you have your investment advisors where at least they owe you a fiduciary duty your Edward Jones or Ameriprises of the world but talk to them about taxes they can’t talk to you about taxes talk to them about legal structures.
They can’t talk to you about that versus where we try to focus is holistic advice so if you were to talk to like a vendor and ask them that same question of should I look at a trust versus annuity they’re going to say hey depending on who you talk to an insurance person they can say go get the insurance you talk to someone that just says the legal planning they’re gonna say just do the trust but our approach is different we first need to take a look at the whole picture and focus first on what your goals are so these are just tools it’s important to figure out what is the best tool for you and the answer to that unfortunately on this webinar is always going to be it depends that’s where we sit down and figure out what’s best for you okay all right done on that one let me just make sure I don’t have any.
Okay good all right one down a lot of so these first two were just continuations from last week all right thanks last week for the advice on daily money managers trustees and powers of attorney one of the causes of complication is in following the advice is following advice about diversity against risk we have 20 investment accounts with four brokers so let me talk about diversification there how do you recommend reliable honest support fda so there’s a lot to unpack here ratings for insurers are there agencies to insure against losses from brokerage and financial advisors you’re a sela and tfp they test knowledge but they do do they monitor performance or fraud so this is kind of a follow-up from last week and the question last week was as we age we’re maybe not wanting to deal with all the bills and stuff so so what do we do how do we make sure all this stuff’s taken care of and from a legal structure this is where we create your rule book of appointing people to take care of things not necessarily if you’re just incapacitated but if you just want to turn it over to them and this is really where the financial power of attorney and the trust come into play.
Then the question last week was getting to well that’s a lot of responsibility like handling day-to-day bills what other options are there and there’s like people out there like daily money managers or bookkeepers or even cpas but really the the crux of this question was getting to like how do you trust these people and I don’t have a perfect answer it’s all going to be about whoops it’s all going to be about just finding someone that you trust, to be honest, and what I would say is the sooner you find someone you trust the better off you are especially if there’s concerns about aging and dementia.
Because sometimes that internal trusting compass can get off and so again that’s a tudor on the horn but that’s where a lot of families just feel comfortable with us and trust us they meet with us they’ve attended a webinar they attend our workshop they’ve attended these and we develop trust unfortunately there’s no there’s no magic wands like I unfortunately I just saw something last week where a a certified elder law attorney attorney who has like above fiduciary duty attorney-client privilege he was in utah he was a selah which is the top designation you can get for estate planning and elder law got charged in U.S. Federal court for embezzlement for like 50.
I don’t know what it was it was like 20 million dollars and if you want to google it it’s like Utah elder law attorney embezzlement or something like that and so on our list serve someone sent a note and then he was immediately kicked off out of the CELA program and everything and he’s going to jail but there’s no designation or anything that’s going to say this is a trustworthy person as a CELA and a certified finance planner we do owe a fiduciary duty and if we violate that we’re going to sacrifice our designations as an attorney yeah if I embezzle chances are I’m going to court and I’m not going to be an attorney anymore but I would say having those designations is better than not because at least you know the person knows exactly what they’re doing and they haven’t done that or been caught in the past but at the end of the day I think it just comes down to trusting your human nature to find someone that you trust in that role.
There’s no agency that’s going to be perfect there’s no designation that’s going to be you’re going to find bad apples in every profession so at the end of the day it’s just trusting trusting the people you work with like even ratings french insurance like yeah there’s a rated and b rated and if I had a choice if we’re looking at long-term care I’m going to use an a-rated company of course and I think people overestimate like the value of like FDA DICinsurance and people have more of that than they actually expect because even with that it’s just backed by the federal government like people have questions about the federal government at the end of the day but I’ll tell you in our 16 years and none of my clients have lost any money from any defaults or anything like that.
And one thing I do want to point out is I will say that some people look at diversification this is something that we have to be careful with it’s like I’m diversified because I have all my money spread out first of all a lot of times if you have like four different advisors putting together portfolios and they’re not seeing what the other people are doing that might not really be diversification because you might have overlap in these different portfolios and then the other thing I’ll share is that okay you have 20 different accounts god forbid you pass away like it’s going to be a pain in the butt for the kids to reach out to all and handle all these accounts I’ll tell you one of the things that we try to do is we try to simplify and take away the complexity at the end of the day and not only just to allow you to focus on what you want to focus on as you’re retiring in aging but also god forbid you pass away now your trustee.
Your beneficiaries have to go to all these different accounts with their death certificates and certificate of trust to close all these different accounts you know like one of the visions of why we do what we do where we put together these legal financial kind of tax planning all under one roof is that now like all this just focuses into one spot so at the end of the day you have one stop shopping and if you don’t trust us that’s fine like find someone else but I’ll tell you what our families appreciate that their loved ones don’t have to go to four different places and close out 20 different accounts yeah but just because I have a CFP or CELA does that mean that you can trust me no it’s just hopefully we do enough to to earn your trust so hopefully that’s helpful I don’t have a perfect answer there’s no like supreme governing body to like bless whether someone’s not a Bernie Madoff at the end of the day like and that’s just unfortunate nature of the industry there’s going to be good apples and bad apples.
I would say that typically if you have the higher designations and you put in the work chances are you’re not going to do something to sacrifice that but there’s examples of people that done it like just last week unfortunately this is the first time i’ve ever seen it sela got arrested and accused of fraud which just broke my heart it it puts the whole profession down so that’s where I guess kind of getting back to this concept of it’s very easy to be an insurance salesman you just have to pass a three-hour test that you can get done within 30 minutes that basically if you can fog a mirror you can become an insurance agent and so there’s a lot of people just selling life insurance and annuities it’s harder to become an investment person at fiduciary and it’s harder to do all of that and also become an attorney so I would look for someone who has more to lose if they were to violate that fiduciary or attorney client privilege here’s a comment or question making use of automated bill pay by all of your utilities takes quite a load off of the administrative work for elder person shoulders and it’s at no additional cost.
Yep so that’s exactly what we’re talking about like if you can set things up as automatic payments automate as much of it as possible it’s gonna it’s gonna make things easier and that’s really what i’m getting with this is like let’s try to simplify versus make things more complex at the end of the day um because the the simpler it is the easier to understand I think the less chance of fraud there is you know like where do people a lot of times get caught up in some of these fraud like the bernie madoff’s it’s like all right we’re going into these like unique investment opportunities and stuff like that’s there’s more of a chance for father than trying to keep things as simple as possible and like that’s really what we’re trying to do is we’re trying to simplify as much as we can at the end of the day yeah sure some of the things we’ll do are a little more complex.
But we have to have reasons why we do that complexity all right we’ll keep on going up here’s another one not a question but when my father-in-law died he had over 20 accounts my mother-in-law was clueless so we met with schwab and after many days and many hours over a few months they got us down to four accounts all that Schwab incredible help for no upfront charges yeah again like if you can simplify this as much as possible I’m a big fan of that and a lot of times people think diversification is like all right I’m gonna put a hundred thousand at this account or this Schwab a hundred thousand dollars at td ameritrade a hundred thousand dollars of banking but like hey you’re not diversifying the way you think you should be I’m sure you get more fdic protection but I’ll tell you I’ve seen a lot more undiversified portfolios than I’ve seen people lose money because they didn’t have fdic coverage um yeah so whenever we’re setting up estate plans or helping people we try to consolidate as much as possible um simplicity is is important thanks for that comment all right we’re for I think yeah two more we are preparing to refinance our home right now and it’s a trust the mortgage company is giving us a hard time with a home being owned by the trust what are our options okay so I think we’ve talked about this before so you have your home and i’ll tell you what a lot of times when we’re doing a revocable living trust the home stays in your name and it only goes into the trust upon death we call this a ladybird deed.
And I apologize we use all of the acronyms lady bird deed is named after lady bird johnson basically what it is is a beneficiary designation so it’s in your name while you’re live upon death goes into the trust if this was the case and you tried to refinance no issues whatsoever it’s still in your name but we see situations where and we wouldn’t do this but we’ve seen where the revocable living trust was actually the owner there’s no good reason for that in fact there’s some downsides to that um but if we are putting together an asset protection trust a lot of times we will have the home in the trust and so this is where we run into the issue sometimes so couple options really there’s two options yeah i’ll get to that question in just a second that’s fine um okay so with the revocable living trust a the house should not be owned by the revocable trust so what I would do is I would beat it out and then do a ladybird deed so that upon death it goes into the trust and then once you’ve dated out now you can refinance.
So that’s straightforward if you have a revo revocable living trust um castle trust you have a choice to make one find a different lender so there are lenders that will lend directly to the trust or second we can do the same thing or take it out of the trust we do the refi and then we can put it back into the trust downside of that is you would um downside of that is you would restart that five-year clock for medicaid purposes if we were trying to get qualified for medicaid but a lot of times when people are refinancing they’re still pretty healthy and there’s no concern of having to go in a nursing home so I would only be concerned of doing this if there’s a concern of going into a nursing home anytime soon I get a third option just find other ways like not do it use some other funds like pull money out of the iras especially if think taxes are going up all right i’ll get to don your question in just a second.
All right number four and then I have one more question that came in after this you had mentioned in your last email and we’ve seen the news about inflation what are some big picture things we can do to protect our money but still try to keep up with inflation big thing here and again here’s the answer it depends on your situation um but the big thing is just kind of understanding all right if we have inflation and we think there’s like two different types of or any investment can have two out of three characteristics um we can have like growth and liquidity we can have growth and safety or we can have liquidity and safety so with all the concerns of inflation and one of the big things with inflation is that like social security I think next year is supposed to go up 5.9 um cost of gas cost of everything is up cost of food is up everyone sees it right now so the issue big issue is having money sitting in cash and if you have a ton of money sitting in cash and inflation’s going up 5.9 percent.
What are you earning on that money next to nothing so what we need to do is figure out okay what is your emergency fund what is the money that you need maybe over the next year or two years depending on what situation is and then let’s get it to growth and there’s lots of different options so the big thing with inflation is okay social security’s going up 5.9 um what’s the cost of everything going up elsa or what’s the cost of everything else going up and if you’re only earning point five percent on what you have sitting in cash then you can’t have money staying in cash we call that going broke safely and slowly so just understand that if you do have money sitting in cash there are different options we can have growth and liquidity we can have growth and safety and there’s even things that we can have that have like a little bit of of all of this of growth liquidity and safety where we’re earning anywhere from like 2.5 to 6 percent rate of return and it’s completely so it’s again figuring out what is your goal.
If your goal is to hey I need to get a better rate of return versus zero given inflation let’s look at what the different options are and some of them can be geared towards growth and liquidity can be growth and safety or it could be growth with safety and complete liquidity at any time so yeah the big thing is just okay we can’t have a ton of money sitting in cash we need to make that money work for us whoop so so it depends all right and then another question and this is almost opening up a can of worms so bitcoin do I think this is a good investment so as a fiduciary I can’t help you with this but what i’ll say is just kind of give you my thoughts um and this is me just speaking off the cuff i’m not saying rush out by a bunch of bitcoin a lot of it’s super confusing but what i’ll say is a lot of times in the past people looked at gold as that kind of alternative to cash and stocks where if we’re not comfortable with how the us dollar is then what is a good hedge against that maybe it’s gold the weird thing is is both of those things have no actual value right like why do we why do we assign a value to cash we just deal with it and barter based on it and the same thing with gold like granted we’ve used gold for longer it’s like a precious metal but in reality and with some of my clients they say like if the world really goes bad like what is gold going to get you I want like ammunition and food but for a long time we’ve said that gold is kind of a hedge against like the decline of the dollar or something like that.
But what a lot of people are now doing is kind of moving to the digital world and this is where okay you have this big group of people internationally that have assigned a certain value to like cryptocurrencies like bitcoin and it’s completely volatile like if you watch the prices you’re you’re bitcoins valued at fifty thousand one day for one bitcoin to twenty thousand and then thirty thousand the next day then it’s up to sixty um so if you’re on this webinar and you’re anywhere near retirement I would not put all your money into bitcoin um but if and I have a like a kind of investing pyramid I don’t have it in front of me but like a portion of your investment especially as you get closer retirement should be relatively geared towards safety and growth a portion should be geared towards like growth and maybe more volatility and then we have this like zero to ten percent where that’s people are investing in real estate and business opportunities.
And maybe if you want to put a portion to that to bitcoin um that’s great I certainly wouldn’t put everything in there um like do I personally have some bitcoin yeah but again it’s I don’t think it should be a big part of anyone’s portfolio who is on this call so so that’s my my bitcoin thesis but yeah I see if you put a gun to my head I see kind of bitcoin being the the next form of gold if you’re not comfortable with where the dollar is at and what’s going on um that might be something that that you look towards as a hedge um one of the problems I always had with gold especially if you have like physical gold is okay that’s great you can buy it but trying to unload it like there’s transaction costs and that’s something where bitcoin you don’t necessarily have that like there’s a lot of places that take bitcoin versus I had a client who knew someone who was very wealthy and had like a whole um like basement filled with gold bars and was willing to sell it to my client for like 50 cents on the dollar like I understand like I’m sure you can buy it for one amount it says it’s value but trying to unload it is a little more difficult so I think bitcoin is interesting I think it’s going to be maybe a alternative gold but I certainly wouldn’t put all my eggs in that basket.
All right any other questions going once going twice all right well if I don’t talk to you have a great holiday we’ll be on next wednesday if you do have questions feel free to send them in I love answering these questions live so with that I appreciate everyone make it a great week talk to you next week and feel free to share does that mean that you can trust me no it’s just hopefully we do enough to to earn your trust so hopefully that’s helpful I don’t have a perfect answer there’s no like supreme governing body to like bless whether someone’s not a bernie madoff at the end of the day like and that’s just unfortunate unfortunate nature of the industry there’s going to be good apples and bad apples.
I would say that typically if you have the higher designations and you put in the work chances are you’re not going to do something to sacrifice that but there’s examples of people that done it like just last week unfortunately this is the first time I’ve ever seen it sela got arrested and accused of fraud which just broke my heart it it puts the whole profession down so that’s where I guess kind of getting back to this concept of it’s very easy to be an insurance salesman you just have to pass a three-hour test that you can get done within 30 minutes that basically if you can fog a mirror you can become an insurance agent and so there’s a lot of people just selling life insurance and annuities it’s harder to become an investment person at fiduciary and it’s harder to do all of that and also become an attorney so I would look for someone who has more to lose if they were to violate that fiduciary or attorney client privilege here’s a comment or question making use of automated bill pay by all of your utilities takes quite a load off of the administrative work for elder person shoulders and it’s at no additional cost yep so that’s exactly what we’re talking about like if you can set things up as automatic payments automate as much of it as possible it’s gonna it’s gonna make things easier.
And that’s really what I’m getting with this is like let’s try to simplify versus make things more complex at the end of the day because the the simpler it is the easier to understand I think the less chance of fraud there is you know like where do people a lot of times get caught up in some of these fraud like the bernie madoff’s it’s like all right we’re going into these like unique investment opportunities and stuff like that’s there’s more of a chance for father than trying to keep things as simple as possible and like that’s really what we’re trying to do is we’re trying to simplify as much as we can at the end of the day yeah sure some of the things we’ll do are a little more complex but we have to have reasons why we do that complexity all right we’ll keep on going up here’s another one not a question but when my father-in-law died he had over 20 accounts my mother-in-law was clueless so we met with Schwab and after many days and many hours over a few months they got us down to four accounts all that schwab incredible help for no upfront charges yeah again like if you can simplify this as much as possible.
I’m a big fan of that and a lot of times people think diversification is like all right I’m gonna put a hundred thousand at this account or this schwab a hundred thousand dollars at td ameritrade a hundred thousand dollars of banking but like hey you’re not diversifying the way you think you should be I’m sure you get more fdic protection but I’ll tell you I’ve seen a lot more undiversified portfolios than I’ve seen people lose money because they didn’t have fdic coverage yeah so whenever we’re setting up estate plans or helping people we try to consolidate as much as possible simplicity is is important thanks for that comment all right we’re for I think yeah two more we are preparing to refinance our home right now and it’s a trust the mortgage company is giving us a hard time with a home being owned by the trust what are our options okay so I think we’ve talked about this before so you have your home and I’ll tell you what a lot of times when we’re doing a revocable living trust the home stays in your name and it only goes into the trust upon death we call this a ladybird deed and I apologize we use all of the acronyms lady bird deed is named after lady bird johnson basically what it is is a beneficiary designation so it’s in your name while you’re live upon death goes into the trust if this was the case and you tried to refinance no issues whatsoever.
It’s still in your name but we see situations where and we wouldn’t do this but we’ve seen where the revocable living trust was actually the owner there’s no good reason for that in fact there’s some downsides to that but if we are putting together an asset protection trust a lot of times we will have the home in the trust and so this is where we run into the issue sometimes so couple options really there’s two options yeah I’ll get to that question in just a second that’s fine okay so with the revocable living trust a the house should not be owned by the revocable trust so what I would do is I would beat it out and then do a ladybird deed so that upon death it goes into the trust and then once you’ve dated out now you can refinance so that’s straightforward if you have a revo revocable living trust castle trust you have a choice to make one find a different lender so there are lenders that will lend directly to the trust or second we can do the same thing or take it out of the trust we do the refi and then we can put it back into the trust downside of that is you would downside of that is you would restart that five-year clock for medicaid purposes if we were trying to get qualified for medicaid but a lot of times when people are refinancing they’re still pretty healthy and there’s no concern of having to go in a nursing home so I would only be concerned of doing this if there’s a concern of going into a nursing home anytime soon I get a third option just find other ways like not do it use some other funds like pull money out of the IRAs especially if think taxes are going up.
All right I’ll get to don your question in just a second all right number four and then I have one more question that came in after this [Music] you had mentioned in your last email and we’ve seen the news about inflation what are some big picture things we can do to protect our money but still try to keep up with inflation big thing here and again here’s the answer it depends on your situation but the big thing is just kind of understanding all right if we have inflation and we think there’s like two different types of or any investment can have two out of three characteristics we can have like growth and liquidity we can have growth and safety or we can have liquidity and safety so with all the concerns of inflation and one of the big things with inflation is that like social security I think next year is supposed to go up 5.9 cost of gas cost of everything is up cost of food is up everyone sees it right now so the issue big issue is having money sitting in cash and if you have a ton of money sitting in cash and inflation’s going up 5.9 percent what are you earning on that money next to nothing so what we need to do is figure out okay what is your emergency fund what is the money that you need maybe over the next year or two years depending on what situation is and then let’s get it to growth and there’s lots of different options so the big thing with inflation is.
Okay social security’s going up 5.9 what’s the cost of everything going up elsa or what’s the cost of everything else going up and if you’re only earning point five percent on what you have sitting in cash then you can’t have money staying in cash we call that going broke safely and slowly so just understand that if you do have money sitting in cash there are different options we can have growth and liquidity we can have growth and safety and there’s even things that we can have that have like a little bit of of all of this of growth liquidity and safety where we’re earning anywhere from like 2.5 to 6 percent rate of return and it’s completely so it’s again figuring out what is your goal if your goal is to hey I need to get a better rate of return versus zero given inflation let’s look at what the different options are and some of them can be geared towards growth and liquidity can be growth and safety or it could be growth with safety and complete liquidity at any time so yeah the big thing is just okay we can’t have a ton of money sitting in cash we need to make that money work for us whoop so so it depends all right and then another question and this is almost opening up a can of worms so bitcoin do I think this is a good investment so as a fiduciary I can’t help you with this.
But what I’ll say is just kind of give you my thoughts and this is me just speaking off the cuff I’m not saying rush out by a bunch of bitcoin a lot of it’s super confusing but what I’ll say is a lot of times in the past people looked at gold as that kind of alternative to cash and stocks where if we’re not comfortable with how the us dollar is then what is a good hedge against that maybe it’s gold the weird thing is is both of those things have no actual value right like why do we why do we assign a value to cash we just deal with it and barter based on it and the same thing with gold like granted we’ve used gold for longer it’s like a precious metal but in reality and with some of my clients they say like if the world really goes bad like what is gold going to get you I want like ammunition and food but for a long time we’ve said that gold is kind of a hedge against like the decline of the dollar or something like that but what a lot of people are now doing is kind of moving to the digital world and this is where okay you have this big group of people internationally that have assigned a certain value to like cryptocurrencies like bitcoin.
And it’s completely volatile like if you watch the prices you’re you’re bitcoins valued at fifty thousand one day for one bitcoin to twenty thousand and then thirty thousand the next day then it’s up to sixty so if you’re on this webinar and you’re anywhere near retirement I would not put all your money into bitcoin but if and I have a like a kind of investing pyramid I don’t have it in front of me but like a portion of your investment especially as you get closer retirement should be relatively geared towards safety and growth a portion should be geared towards like growth and maybe more volatility and then we have this like zero to ten percent where that’s people are investing in real estate and business opportunities and maybe if you want to put a portion to that to bitcoin that’s great I certainly wouldn’t put everything in there like do I personally have some bitcoin yeah but again it’s I don’t think it should be a big part of anyone’s portfolio who is on this call.
So, that’s my my bitcoin thesis but yeah I see if you put a gun to my head I see kind of bitcoin being the the next form of gold if you’re not comfortable with where the dollar is at and what’s going on that might be something that that you look towards as a hedge one of the problems I always had with gold especially if you have like physical gold is okay that’s great you can buy it but trying to unload it like there’s transaction costs and that’s something where bitcoin you don’t necessarily have that like there’s a lot of places that take bitcoin versus I had a client who knew someone who was very wealthy and had like a whole like basement filled with gold bars and was willing to sell it to my client for like 50 cents on the dollar like I understand like I’m sure you can buy it for one amount it says it’s value but trying to unload it is a little more difficult so I think bitcoin is interesting I think it’s going to be maybe a alternative gold but I certainly wouldn’t put all my eggs in that basket so so yeah all right any other questions going once going twice all right well if I don’t talk to you have a great holiday we’ll be on next wednesday if you do have questions feel free to send them in I love answering these questions live so with that I appreciate everyone make it a great week talk to you next week and feel free to share the