This is the Truth Network. Yeah. 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.
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Well, welcome to Finishing Well with Certified Financial Planner Hans Scheil. And today's show, how fun? Episode 7 of 8 of the Financial Plan Series. And today's episode is specifically estate planning. And so when you think about the ultimate estate plan, as Hans is just pointing out to me, actually, Jesus couldn't have done it better, right?
Because he essentially, especially in John 14, he was telling us that we're all picking up a piece of the kingdom, right? He had an amazing estate plan that not only went for the next generation, the next generation, but honestly, you know, on to our kids, kids, et cetera, et cetera. Amazing how he provided for his mother from the cross. Amazing how he provided for his disciples in John 14, 15, and 16 and 17, actually, even in the prayers. And so as we try to...
Emulate that, Hans. Let's jump in.
Okay, so This is episode 6. Seven. of eight in our financial planning series. It's estate planning. And so as many of you know that listen all the time, We have seven worries that we deal with and each show Each week goes over a different topic.
I mean we start with Social Security, next Medicare, next long-term care.
Next four hundred one K IRA and all the things you need to do with that. retirement income, creating a retirement income plan. Estate planning. And then taxes. And so we're almost done with the Cyrides.
But I want to make every one of these shows stand out. And exist by itself.
So, if somebody just listens to one episode, that's you today. But we want this to make sense to you.
So we're We're doing an eight-series plan and we're creating a financial plan, retirement plan. for Tom and Susan. Tom's 67. Susan 66. Tom's retiring in October of twenty twenty six.
They have two adult children, two grandkids. They've been married 41 years.
Okay.
So This couple is pretty Norman Rockwell, pretty simple. Um for estate planning Um and frankly somewhat unique. I mean, a lot of people that come into us, they've been married Once or twice they have kids. together or they each have their own kids. Um but they're now consider them yours and a lot of that.
depends for estate planning. as this couple that's in a second marriage. for each of them Have they been married 20 years or 30 years? Or have they been married two years? Um So it's not really Tom and Susan's gig, but I'm telling you that when we're doing estate planning, for blended families This gets real complicated.
Okay.
And especially if there's disproportionate wealth, Um Yeah, yeah, you know, in the situation where Uh maybe this is a a marriage that happened in the fifties or late fifties and sixties. And when I say disproportionate wealth, One of them was more wealthy than the other. And then a lot of times that doesn't make that much difference to the couple. But you can bet your boots that it does to the to the children and the stepchildren. And so We've got to flush all these things out and have some difficult conversations sometimes that people haven't had.
Tom and Susan's case, It's pretty simple. They've just have one marriage. They have two adult children. One of them has two grandkids, one of the adult children. Um So it's it's pretty simple.
But what we got to do with Tom and Susan Or even if they were single, We we've got to sit down and we've got to ask them. Yeah. Leaving things to your kids, leaving money or leaving an amount of money or something. Is that a priority to you?
So that's one. scenario. The second scenario is He is Hand up. The priority is for you spending and enjoying your money in your lifetime. knowing you're going to have something left.
and the something left is going to go to the kids.
Okay, and I really just need to get an idea. And a lot of people, I tell them on the first meeting, you don't have to give me the answer to this now. But you need to give it to me pretty soon. Yes. If there's a specific bequest That you want to leave.
or a specific amount of money you want to give to your kids. or one of them or one of your grandchildren or all of your grandchildren. I need to know that now because we're going to put that in and we're going to write it in and we're going to work backwards and make sure that's there.
Okay, and it's from up priority standpoint You know, we need to know that. And then that's the one situation. The opposite situation is. Look, I want to leave something to all of them. Or some of them or But I'm not married to the amount.
The priority here, I earned the money. The priority here is me or us. And then That's just secondaries. What's left goes to them. Am I making sense?
Yes. Yeah. So These are all things we need to learn. And in Tom and Susan's case, really know that they're they're saying, look, our money's for us. we want to leave money and we're going to have money left over when we die.
And we want that to go to our kids. mainly, and we want some of it to go to charity and we want some of it to go to our grandchildren.
So This is pretty simple. But they don't want that to be the priority. They want the priority to be. them having a comfortable, enjoyable retirement and to the extent they're going to take care of their kids and grandkids. They want to do that with their living.
They put that right into their spending. that they're going to give things to the to the kids. Um Now So we need to know that. And it's really then where I end up with married couples is and we talked about this on the last show last week Um The real priority in Estate planning For Married couples is the surviving spouse.
Okay.
And that's you know, that's the situation where One of them dies. The other one lives on And the one that's living on is going to face An entirely different situation than they had when they were together because. They're going to go from two Social Security checks. to one Social Security check.
So that's going to be an immediate loss of income.
Okay, Irma. For the Medicare tags, Instead of having a starting point of two hundred eighteen thousand of income, becomes 109,000 of income.
So Again, some people, no problem. Other people that have big RMDs out of a big IRA. All of a sudden they're going to be paying a bunch more Irma. The survivor is. And that comes as a shock.
Um Then for estate planning, most people have Their power of attorney listed as their spouse. I know that's the way. My wife and I are is that something happens to me where I can't make decisions or health care decisions, My wife is the power of attorney. Very simple, and then vice versa. She can't make decisions, I'm the power of attorney.
But when one of us dies, That whole arrangement is Or why? Because Now my power of attorney is deceased, I can't make decisions. Who's going to make them? And so that's why when we're setting up powers of attorney that we do in estate planning, we're going to make sure that the First alternate. is the most responsible kid that they have.
Okay.
So Is this does this sound like what you did in your estate planning, Robbie? Oh, absolutely. And they're, you know, they're in a lot of. you know, that's the real concern. As you said, what happens when my income drops out, my Social Security drops out?
You know, the tax change, all those things that you just described are real concerns. And a big part of estate planning I did not have any. I never really had even considered until we started to talk.
Well, yeah. I mean, your dad lived this. You lived it with your dad. This is my point when we first met. Um Just having, you know, when he passed away, he was already a single.
tax filer and his his wife had passed away. Before I met you. Uh But You know, you were his POA. Thank God. I mean, you you had all that.
through his last months there. Y you would have been a had a real problem if you didn't have that POA in place. Oh, it was huge. And and those forms in general Which you talked about in the video on this, are just gigantic when it comes to navigating this whole estate planning. You know, who knew that you had to have all these forms?
So, what we need to do is the same thing we're doing now on the radio. We are putting you in the situation Not expecting you to figure it all out.
So we have a client comes in, they're a new client. They're hiring us to do the plan, and we're showing the example of Tom and Susan. And it sounds like we're immediately putting them on the spot. But we just want to force them. To think about these things and tell us what their heart says to do.
And what they want to do then we'll come up with the solutions. We're going to make it all better after we make it all bad. Because we're going to put you in the situation and it's just The next one I got on there is that home health care Is much more difficult. I mean, with the little thing that you just went through, it wasn't a little thing, it was a big thing. Where you and Tammy were kind of taking care of each other, which is a little bit of what married couples do.
Right. You want to talk about that for a second? Oh yeah, we were in a horrific car accident and I had a broken back and a neck and a cervical collar, and Tammy had a broken leg. And interestingly, you know, they sent us both home to take care of each other, neither one of us being able to lift more than 35 pounds. And so immediately.
You know, our kids were brought into the act, but also, you know, fortunately, we did have some home health care options, which because we'd done some planning. Perfect.
So that's the Tom and Susan or Robbie and Tammy living.
Now when you're the surviving spouse And the first one of you dies, That's not going to be an option anymore. When you get sent home from the hospital, somebody to take care of you, there's no spouse there anymore. Exactly. Oh, absolutely. And it's a good place to pause and remind everyone that this show is brought to you by CardinalGuide, CardinalGuide.com.
And if you go to CardinalGuide.com, you're going to see the seven worries tabs, which is one of those is the estate plan. And if you go to that tab, you're going to find an amazing video right along these same lines with all kinds of show notes and details about what we're talking about today. And you can see Tom actually working with this financial plan software and how estate planning fits into that software. Of course, that's all there at CardinalGuide.com again under the Estate Plan tab, as well as Hans's book, The Complete Cardinal Guide to Planning for Living in Retirement. And of course, the contact, you know, just simply to get your own financial plan, which, by the way, is only $1,000.
Or if you need to talk to them about some other situation along these lines, believe me, they would love to talk to you. It's all there at CardinalGuide.com. We'll be right back with a whole lot more of Financial Plan Series episode 7. State Planning. 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.
Well, welcome back to Finishing Well with Certified Financial Planner Han Scheil and today's show: the Financial Plan Series, episode 7: Estate Planning. And wow, it's just, I mean, I love this. At first glance, when you. You know, all of a sudden there hit these shocker ideas of, man, I got to really consider all these things. But then when you begin to.
Add the planning in, Hans. It gives you really a neat sense of satisfaction: like, man, I got things covered I never thought about.
So what? What we need to do is With the estate planning, and we brought this out in the first part of the hours, we want to find out. Uh is there a specific thing that you want to do At the end of your life, is there something or an amount of money? or a thing or a piece of property or Something That you want to give to one of your kids, grandkids, a relative. Um So we want to start with that and work backwards.
And we, you know, if I just ask the question that way, most people are going to say, oh yeah, I want to do that, I want to get this to this. And they say, well, let me ask over the second part of the question again. The second part of the question is Is that a priority? or is the priority is that you living off the money well you're alive, both of you. And then you leave in the money to the one of you that survives.
And then that person lives off the money, the survivor of you two. And then the money goes to the kids. And so when I give them that second option, a lot of people say, no, we're that second one.
So it's not a priority This is just what I'd like to happen.
So these are the things that we've got to get out of people. in the beginning when we're doing the whole financial plan, so we know how to allocate resources is what it really boils down to. Yeah. When people Are pretty much on a specific request, like I'm giving $100,000 to the church.
Okay.
Well, I'm probably going to do that out of the IRA. Because You know, I'm gonna give before tax money to the church because the church doesn't pay taxes.
So I'm maybe going to put down the church. as the beneficiary of the IRA for one hundred thousand dollars. or X percentage or whatever.
So, and there's the life insurance.
So if somebody really has a specific deal on their mind Life insurance or an annuity with a beneficiary on it works perfect because it just. Put that person's name, it has an amount. person dies, a check goes to them.
Okay, I mean you can't get any better than that.
Well, and the beauty of that one specifically, y you know, in families where you have Children that are, you know, not joint children. You know, you just have. Situations like that, where here's a way to set up that, and it's a no-brainer, even for the surviving spouse. Because it may be their kid you know, it might be your kids that you know, or the ones that are expecting something at your death. And so the life insurance can go either way.
I I mean I've sat with so many people. And they come in, and then I start asking all these hard questions, and all of a sudden it starts coming out. Oh no. She's got her money and her money's going to go to her kids. And they already we already got that set up in the will.
Okay.
Yeah. you know, the reasoning behind that is Her kids We're expecting that money because it came from her first marriage and all their time, and these are. this other person's stepkids. another spouse's stepkids. Yeah.
That's all the priority. And then a lot of these people are saying, They're leaving out their spouse because I mean, these two people collectively are living off of this money.
So now I got to ask people, so what's the priority here? I mean it what what I mean, if you all of a sudden pass away and we give all this money to your kids from your first marriage. Where does that leave him? Uh you're your husband of three years here. And right now you're living out of that pot of money, partially.
So it's, oh, I bring it bring that up. You know, and so now let's give it all to him. And then the k you think how the kids are going to feel. Their mom passes away. Yeah, all the money went to their stepdad.
Okay.
Um That's not good either.
So life insurance is a wonderful solution. Um You can do it either way. And we can make the kids the beneficiary of the life insurance. and give all the money to the guy. Um Because he needs it to live off of or we can give all the money To the kids.
and leave him the beneficiary of the life insurance who he's got something to replace that money he used to live off of. Real simple. Um Or we could just split up the money. But these are the kind of things we do in estate planning, and a lot of people think they just skip the idea that one of them is going to die first. The survivor is going to live on.
And if we've passed out all the money, that's a problem.
Okay.
Oh, I've seen it. Yeah. Now, another little piece of that that I generally recommend because. If we leave all the money to the new husband, which we kind of have to because they're both living and enjoying life together and spending and it's in annuities and You know, and the kids understand that. Lots of people say, Well, our kids don't want our money, they're happy with their mom.
They they really don't. But let's not have them get zero when their mom dies. prematurely. Let's set up a life insurance. or let's take out an annuity where we're going to give them ten thousand dollars each.
Okay, so that there's something That comes to them when the whole bulk of it went to their stepdad or stepmom. But there's something there. and the life insurance, and there's a whole lot of difference between zero and $10,000.
Okay.
Um I just want in those blended families.
Okay.
Um And we work out a lot of these things, and then those people end up buying life insurance, and sometimes it's just term insurance.
So this is a new marriage. You know, and maybe that's all people can afford. But if somebody dies in the next 10 years or 20 years, fifteen years, depending on the length of term and The Then there's going to be a payment. And then If It's longer than that, well then these people have been married for twenty years, so Th there's all kinds of ways that we can structure this Just satisfy. It's kind of get off on a tangent here.
Um No, it's critical information, I think. Completely, you know, relevant. Yeah. Well, it is. And so this is what we do in the estate planning section, and it gets a little bit messy.
And then We're going to show you how to actually, because there's a lot of people that have thought through this and they come up with all kinds of things. but their documents are not set up properly. We're going to use beneficiaries, we're going to use transfer on death on accounts. And I really want to get this in before we're done, is we got five documents. that we're going to get you to an attorney.
And we have one if you're in North Carolina that we can get you to. If you're in another state, most of the states, we have somebody that we can work by zoom. And you need a durable power of attorney, a durable healthcare power of attorney. An advanced directive or living will and you need a last will and testament. Yeah, the end.
Tom and Susan's case, They went with a revocable living trust because they have some concern with their oldest son. if he all of a sudden receives a large sum of money that he's not going to be a good steward of the money. And so we're gonna s we're setting up a trust for them. that is going to dole the money out to him in pieces. And there's a whole lot of uses of trust, but I just want to get in the point.
We have other videos about this. Is you need to get your documents in order and you need to get your beneficiaries in order. And you do one of these plans. We're going to get you to an attorney and we're going to help you with that. Yeah, that's a beautiful part from my standpoint of the reliable financial plan is that, oh my goodness, those estate plan Is those beneficiaries, especially on our IRAs and things that you don't necessarily think have a beneficiary, but oh yes, they do, and those things got to be current.
I have a client I help. This winter Um who Guys, seventy-seven years old. Wife is like 66 years old. It's a second wife. First wife died.
And by the time we dug everything out, he told me it wasn't so. They redid their wills. with the second marriage. but all the beneficiaries on everything still listed her. the deceased wife.
And it really took me digging these out and getting on the phone with them, and we got it all fixed. Thankfully, But boy, what a mess they would have been in. And this guy doesn't really have a long life expectancy.
So Oh okay. Anyhow, I could just tell you story after story after story. That's another thing we do in these financial plans. We're going to get all the beneficiaries out. And we're going to read them.
And you'd be surprised how many mistakes we find in there. Um And then we get them fixed. Yeah. That's good. Yeah, it's that's huge.
Those forms Just and a wonderful opportunity to have that discussion with your family because you have those forms. Here's where you find them. This is what it says. You know, this is what these things mean. Because all these are hard, hard conversations, but oh, feels so good on the other side of them, right?
Oh, it does. You have a second marriage going on. And you have somebody that's worked for years in a company. I mean, it's just not all that uncommon to have a A divorced wife or a deceased wife, like the example I gave, still listed as the beneficiary. Um and then have the kids as the contendants, or maybe the kids were babies.
When that thing was first filled out, so the kids aren't on there as contingent. People have their brother or something. And then All of a sudden their brother gets the money after they die. Uh It's imperative that all this stuff gets drained out, and then you get all the documents. And the documents say the same thing.
as the beneficiary designations in the transfer on defining accounts. That's wonderful stuff. Again, there's so much to learn on this issue. It's so beautiful, in my opinion. And you can find it all at cardinalguy.com.
So, if you go to cardinalguy.com, you're going to find the seven worries tabs with today. It's estate planning. And if you go there, you're going to find this YouTube video with all sorts of details, show notes, showing how they take these details of your estate plan, put them in the overall financial plan, because that's a big part of how you get to all the different numbers that we've talked about so far.
So, really exciting stuff. It's all there at cardinalguide.com, as well as Hans's book, The Complete Cardinal Guide to Planning Foreign Living in Retirement, a workbook that goes along with that. Amazing resources, as well as, of course, the contact Hans and Tom page. I can't. Say enough about how easy that would be to just, you know, get engaged and have an opportunity to really.
This is a comprehensive thing. It takes in your whole life, and what a beautiful thing it'll feel like on the other side of it. It's a 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 offer 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. If you have a question, comment, or suggestion for future shows, click on the Finishing Well radio show on the website and send us a word. Once again, that's CardinalGuide.com.
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