This is the Truth Network. Welcome to Finishing Well, brought to you by CardinalGuide.com with certified financial planner Hans Scheil, best-selling author and financial planner, helping families finish well for over 40 years. On Finishing Well, we'll examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes.
Now, let's get started with Finishing Well. Welcome to Finishing Well with Certified Financial Planner Hans Scheil, and today's show estate planning documents. What's the purpose?
Well, to say there's some purpose there is would be an understatement from my perspective, but it has to do with and in and even in when you're looking at this spiritually, that it's stewardship beyond Your lifetime. And so when you think about that, there's some unbelievable examples of this in the Bible where you think about one of the first ones was Joseph got a power of attorney from the Pharaoh, which, you know, not only did he do great estate planning that not only saved Egypt from the famine, et cetera, et cetera, but it actually helped bring his family back together as well as keep them in the grain for quite a period of time. And then, you know, one of the neat, neat wills that you can ever read is in 1 Kings chapter 2, where King David is giving his succession instructions to his son, Solomon. He gave him clear verbal and written instructions on how to lead, you know, who to bless exactly. I don't know if you remember him explaining all the people who to bless and how to deal with certain people that had not performed perfect godly, I suppose, would be a good thing to do.
So, final wishes can reflect the values and spiritual visions that you want carried on. And even Jesus, right, he had sort of his plan from the cross. He gave his instructions on how Mary was to be cared for. And as Hans talked out in our discussion, he As he met with the disciples after the resurrection, he gave them clear instructions what to do as well.
So, we do have this idea of our spiritual stewardship as well as our physical stewardship, that it doesn't end at death and it brings order, it really does. And peace, you know, because without a will, as we'll talk about and all those things, chaos is unbelievable, which is not a picture of God in any way, shape, or form. And then, you know, final instructions are really a form of discipleship, just like Jesus showed us, right, is right there on the Mount of Olives. And so we can reflect God's orderliness when, you know, when we make loving plans like that. And certainly people remember you as part of how you left it.
So, Hans, we got some documents we got to talk about. Yeah.
So You know, we talk about each week we talk about one of the seven worries. And you know, number six is estate planning. And then we're going to you do a financial plan with us Um part of the process is we're going to help you set up your estate.
So what you want to have happen. After you die. Um is going to happen. as best as we can Layout. And what that involves most of the time for most people is.
making sure that you have the proper documents. in place and that those documents are worded in such a way that That's exactly what happens. God's will is carried out, and your will is carried out. Um in terms of what you want to have happen who you want to get what What you want them to do, just all of that. And then there's a big piece of this.
in the period of time Before you die. That's where most of the documents are when you're no longer able to make decisions for yourself. then you're going to appoint somebody to make those decisions for you. Um So that's what we're going to be talking about today, and we're going to go through these one by one and just talk about what's the purpose of them.
So I think we can start with. the last will and testament. Yeah.
Um what I'll say about that is it just Everybody needs to have a will. And unfortunately. Many people don't. And it's just something they've put off and put off and put off. Yeah.
you know if if you get nothing more out of this show if you're one of those people Put that on your to-do list and take care of it next week. For this week, if there's any left of it. Um I've just it on your list. You know, we can get you to an attorney. And it's not going to cost you an arm and a leg, but You you need to get a will in place.
And you know what the will, most people know what a will does, is it just states. Who gets what? how things are to be handled. after you pass away.
So what do you have to say of that, Robbie? Oh, it it is really simple. And even though, you know, Tammy and I's stuff wasn't all that complicated, by all means, we're so grateful. that it was so easy to get these documents done and affordable, at the say the least, to know that all that's lined out. But then I would also add that my mother had some wisdom here that I think was profound.
She said, give your giving while you're living. In other words, before She passed on She took all the trinkets and all that stuff that a lot of people have in their will. And she gave it out so that she could see the look on people's faces and and and actually make sure the people got it that wanted it because you know that was the way she did it. And that left a whole lot less complication after she passed away because there was none of that stuff to to get out.
Well, yeah, I'm going to add a couple things to that. Is the lady that does the estate planning for us here in North Carolina. She's actually keeps an office right with mine and she did yours. Yeah.
She recommends in her wills that people don't actually don't put all those personal items in the will. What she recommends is that you just make an inventory and you write a note that you put with the will that states. Uh who gets what?
Okay, right. I think your mother's wisdom is even much better: that let's just distribute this stuff while you're still alive. And where people can get some enjoyment, or both of you can get some enjoyment out of it. And a lot of people do that, or they do it kind of halfway. And then in their will.
It says that such and such is supposed to give to so-and-so And then, such and such is not in her possession anymore because she gave it away. You know, 10 years after they wrote the will, but 10 years before she died.
So that's one of the reasons that Tova does that. But that's just kind of a minor point.
So if you don't have a will, you need to get one. And if you have a will. then you might want to consider updating it after you listen to the rest of the show.
Okay, and especially if it's a few years old, because both of you had wills when you came to me, but they were like 20 or 30 years old. Yeah, and when your kids were small. Right. Is that right, Robin? Oh, yeah, and complete completely irrelevant.
you know, at the point that that you guys did that for us. And it it was to say it was easy and simple and and you just feel so better y you know, like these things like you are. You're you're creating order where there would have been chaos.
Okay, so we started with a will. In the last will and testament. And I want you to have one. But then if you do a state planning with me, I'm going to do everything in my power. To keep stuff out of the will and out of the probate court.
Okay. And so I'm going to skip down. in the video to the later parts where I'm going to talk about beneficiary designations. And so, I want to make this real clear to everybody: is that beneficiary designations. Trump the will.
Okay. You know, it means that, you know, if you put down on your life insurance. or your IRA that your son Who gets this money, okay, as the beneficiary? We've just put his name. his relationship, he's the son, and he gets the money.
But in your will, it says somebody else gets the money.
So when these two things conflict, the beneficiary wins. Because when they're passing out the money out of the life insurance or the IRA or anything else for the beneficiary. That's going to happen. Thirty days after you die? And so the beneficiary designation, the benefit of it is it totally bypasses the will.
So Any financial account that you have, life insurance policy. IRAs They all have either a beneficiary designation or financial accounts, accounts at the bank. the stock brokerage. You know, Charles Schwab, Fidelity, all of them have a thing called transfer on death. T-O-D.
Which is different than a beneficiary, but it acts the same way. It just says when when the account owner dies. Send the money. to or transfer the money on death of the account owner to this named person, which is for all practical purposes a beneficiary.
So We are going to Have you do a will? And we're going to make sure that the will says the same thing the beneficiary designations say.
So there isn't a conflict. But I'm telling you, if you're sitting out there and there was a conflict, we actually use beneficiary designations in transfer on debt to completely bypass the will. Does that make sense to you, Robbie? Oh, yeah, and they're just horror stories about this, right? That that one of the reasons why you want to update your beneficiaries As things change, wives change, families change, all sorts of things change.
But whatever you've written in your latest will, if that beneficiary is still sitting on that IRA as Um your ex-wife, it doesn't change anything. That's where it's going. Oh yeah. I mean I had a have a friend of mine I play a lot of golf with. Yeah, he's like in his late thirties, probably early forties now and his His dad is in his 60s.
The His dad is remarried, so to his stepmother, and then his stepmother passed away. And she had a 20-year-term life insurance policy that still had her first husband as the beneficiary. And so Here this couple had been paying the premiums on the term life insurance. the whole time they've been married and then she dies suddenly. And um The money goes to the ex-husband.
Who hadn't even been paying the premiums. And I'm telling you, the money goes there. It doesn't matter what a will says. Uh just I mean, I could talk all day about these bad situations, so we want to try to prevent all that stuff. From happen to you.
And so we're going to do an inventory of all of this stuff and then a recommendation. Yeah, this would be a good time to uh And tell you that this show is brought to you by Cardinal Guide, CardinalGuide.com. And if you go to Cardinal Guide, it's. As Hans mentioned at the beginning of the show, you're going to see these seven worries tabs. And again, estate planning being one that's right there.
And you're going to see a video along these lines with all these documents explained on a board and show notes and all sorts of details as well as links where you can get this work done through associates of Hans, etc., and how they can help you. Of course, there at CardinalGuide.com is Hans's book, which also explains these forms. The complete Cardinal Guide to Planning for and Living in Retirement. And again, they'd make it all easy. Just get to the Contact Hans or Tom page.
At cardinalguide.com. Again, amazing resources. And these things, oh, they are so critical to what's going to happen with your stewardship. We're going to be right back with a whole lot more. Estate planning docs.
What's the purpose?
We'll be right back. Investment advisory services offered through Brookstone Capital Management LLC, abbreviated BCM. a registered investment advisor. BCM and Cardinal Advisors are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. Welcome back to Finishing Well with Certified Financial Planner Hans Scheil. In today's show, we're talking about estate planning documents. What's the purpose?
And so, when we left this subject, we talked about the will, we talked about beneficiaries. What's next?
Okay, so yeah, we talked about the will, and then we're using the beneficiary designations transfer on death to get around there. What's next?
is a revocable living trust. Yeah.
So a revocable living trust Many people think this is in replacement of the will. Yeah, and in some ways it is. Um But you still need a will.
Okay, and what a revocable living trust means Yeah. You put Money. And you put real estate. and you put your worldly possessions essentially Into the trust. You know, you title your real estate.
Um It's still under your Social Security number and your spouse's Social Security number.
So it doesn't really change much where you're living. And when you then pass away, It doesn't have to go through probate. A trust and it keeps it out of the public eye. because probate is available to read from everybody and so that's why I'm not a big fan of it. Yeah, I'm considering doing one of these myself.
For a couple of reasons. One is We found a way to lower the cost of these. There's a lot of people out there pushing trust on everybody. You know, they charge three to five thousand dollars. and they're selling the same trust to everybody.
And I found a way to to get this done for a whole lot less money. Because this is not a real complicated document. And the main reason I'm considering doing this is it's really in North Carolina, it's not possible. to put a beneficiary on a piece of real estate.
So there's some states like Texas and California and a few others, they have these beneficiary deeds. Or they call 'em Ladybird Deeds. I know New Mexico has those and so There is a way to effectively put a beneficiary or beneficiaries. on a piece of real estate so it'll pass out of probate. to your kids if that's where you want it to go.
Um But in North Carolina, it doesn't do that, and I really don't want my kids. to ultimately have to deal with selling our house. Is is is that well You know, they're probably going to end up selling it anyhow because they're going to be the trustees. of the trust with having no power while I'm alive. And my wife is alive.
We'll be the trustees of the trust. But when we're both gone, they will be the trustees and the beneficiaries. of the trust, so then they can just go ahead and sell the house. As the trustees, and then just distribute the money, and they don't ever have to mess around with the probate court. Yeah.
Um I mean, that's kind of it. And I don't want to make this sound like an advertisement for trust because I'm. Very much against. Pushing trusts on everybody because they're expensive, they're complicated, and many times people that are selling trusts. Um Well, let's just l let's not get into that today so much.
I just I don't want people to leave the show saying, man, I got to go give me a trust. No. Um Talk to me before you do that. I mean, that's what I want to say. And we're happy to talk to you without charging you for a full financial plan.
We don't charge for. you know a phone call to just kind of answer some questions on things so feel free to call me about any of this stuff. Yeah, the idea of probate, I'll tell you, having experience with it, and the reason why Hans, you may not be familiar is talking about trying to avoid it at all possible, is that you're talking about a year at least for most. You got to wait till you have your next tax return filed after the person's death, which means you've got to wait till the end of whatever that year is. And you have all these advertisements you got to get out.
And it is a long, complicated process, especially when you're in the grieving process, the loss of your loved one for the family. And it's just messy and long. you know, when you're trying to get everything all straight. And so I I couldn't agree with Hans more that anything you can do, the transfer on death policies or, you know, in the case of you've got real estate that you want to use a trust, it makes all kinds of sense. Yeah.
So what we want to talk about next is the documents you need, and many people are missing these.
Well, you're still alive.
Okay. Yeah.
All of these documents that I'm going to talk about next: the general durable power of attorney. The Advanced Care Directive, the Health Care Power of Attorney, and the HIPAA authorization. They ended death.
So these next four documents, which I think you need, are for the end of your life. where you're giving another person the power to act on your behalf. And they very much are going to need this power. Yeah.
Well, you know, when you need them to need it, when you... Develop memory issues and you can't make financial decisions, or you need to be checked into an assisted living, or they need to hire a home healthcare agency to come to your home and take care of you.
So let's just talk about these.
So the general durable power of attorney. And that basically gives another the legal authority to pay bills, manage investments. And for most people that are married, The first Power of attorney. He is their spouse.
So you and Tammy give that to each other. But then you. you put down a second person if Tammy's unable. Or she's deceased already, then you have. one of your adult children.
down there as the second as a stand-in. Yeah, they could do real estate contract sign contracts. And this thing ends when you pass away.
So it's just that simple and you need it.
Okay. Yeah, I agree. The next one is the healthcare power of attorney. And a lot of people, oh, I got the power of attorney.
Well, Let's look at them. And when we do financial planning, we want to see all this stuff. And in cases where I have a question, I have the attorney that we have right in our office take a look at these. And a lot of times I find people, they got the durable. but they don't have the health care and the health care is just medical decisions on your behalf.
It ends when you pass away. is you can sit there and talk to the doctors and make a decision. on the behalf of the person who can't. Which is you. And so Pretty simple.
These are pretty standard, but you need it. And again, you're going to put your spouse down if you're married, and you're going to put. One of your children is the stand-in. Or, you know, you're not married. Um maybe if you're fortunate enough to have two children, you're going to put them down.
as one and two. But in any case, you want to give one person this power.
So you don't have a committee making decisions. Um So then we have the Advanced Care Directive. This is called a Living Will. and it's your end-of-life care preferences. life sustaining treatments, pain management, Um And when people don't have an advanced care directive, You know, they're going to lean on the family, and they're going to lean to the family, and the family's going to tell them what to do.
And those are terrible decisions. Really? And you know, like my mom had this. Yeah.
All written out. And it made it very easy for us to tell them what to do during the twenty-four hours that. Um she was She was, in effect, dying.
So, this is something that, again, everybody needs. Um Then the next one is the HIPAA authorization. And the HIPAA authorization Yes. You know, anybody that works in healthcare knows what HIPAA is, it's a law. that's about forty years old now that around the secrecy and the privacy How?
medical information about you. Yeah, it's You know, doctors and people say, Oh, I signed that down at the doctor.
Well, you did sign it at the doctor. But you just relieved him of liability. When I'm talking about is a separate document. that lasts the rest of your life. that gives your spouse or one of your adult children.
the authority to see your medical records and doctors the authority to share them with just them so they can make decisions. And that's That's just one of the things it does. You just need it. And so just kind of in summary, When we do financial planning, this is just part of the package. Is first, we do the work.
of finding out from you what your wishes are and your preferences for all this stuff. And then we're going to look at what you have now. And then we're going to point out to you if there's some inconsistencies or if you're missing things. And then we have attorneys really all over the country. We have relationships.
Um that we can Get you to somebody. Um But you need to come to us first. And because these people don't charge as much as the other attorneys because We do all the work for the attorneys first of finding out. what we want these to look like. And then we just kind of send you in a package.
To the attorney. We get on the phone with them in the beginning. And then we're looking for the attorney to. generally do what we direct them to do. That makes sense?
Yeah.
Yeah, it seems a lot more complicated than it actually is. The good news is the attorney knows exactly what she's doing. And when you begin to hand it over to them, they just get it all done. And you just feel like, wow, whatever the situation may be, and believe me, as we've talked about before, the power of attorney I had for my father. Cost uh would it would have cost us over ten thousand dollars if somebody tried to rip him off when he became um I don't know, incoherent or whatever.
And they took advantage of him. But because I had the power of attorney, we were able to unwind that and we didn't end up costing us all that money. Isn't that great? It is. I mean it it it is Um just to have that and You know, you don't have a power of attorney.
You don't have a healthcare power of attorney. And then you go. Like your father did. can't make decisions, you're going to be going in and getting a guardianship at the court. That's going to cost you a lot of money, and it's going to be real painful.
And some of their relatives are going to show up challenging what you're doing.
Well, this is a great time to remind you that all this is brought to you by CardinalGuide, CardinalGuide.com. And if you go to CardinalGuide.com, there are those seven worries tabs, one of which is estate planning. And if you go to that tab, you're going to see lots of shows on this subject. And certainly the video that was the exact same title of estate planning documents. And it's got a board that shows you a lot more details, show notes, etc.
Again, that's at cardinalguide.com, as well as Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement. And, of course, the famous Contact Hans and Tom Page, and as easy way that they can get all these things set up for you. And it. Way more easier than it sounds, and it will end up making complete sense to you and really protect you and your family. And all, by the way, if you've got a older relative, a mother, father, whatever, and a great thing to check in with them Um and let Tom Hans, you know, help you with this again.
CardinalGuide.com. Great show, Hans. Thank you, and God bless you. The opinions expressed by Hans Scheil and guests on this show are their own and do not reflect the opinions of this radio station. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such.
Any statements or opinions are subject to change without notice. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you.
Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it's suitable for your specific situation. Finishing Well is designed to provide accurate and authoritative information with regard to the subject covered. Investment advisory services offered through Brookstrone Capital Management LLC. Abbreviated BCM, a registered investment advisor. BCM and Cardinal Advisors are independent of each other.
Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Cardinal Advisors is not affiliated with or endorsed by the Social Security Administration or any other government agency. We hope you enjoyed Finishing Well, brought to you by CardinalGuide.com. Visit CardinalGuide.com for free downloads of this show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments, and taxes, as well as Han's best-selling book, The Complete Cardinal Guide to Planning for and Living in Retirement and the Workbook. Once again, for dozens of free resources, past shows, or to get Han's book, go to CardinalGuide.com.
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