The 4 Essential Estate Planning Documents

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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.

Well, welcome to Finishing Well with certified financial planner, Hans Scheil. Today's an interesting topic, I have to say, sort of a Halloween topic if you think about it, since today is in fact Halloween for, you know, people are hearing this episode the first time, but the title of the show is actually Last Will and Testament. And so along those lines, you know, it's a wonderful thing, Hans, that Paul gives this, or we don't know, the writer of Hebrews wrote this, and some say that's Paul or maybe it was Barnabas, but whoever it was that wrote Hebrews in chapter 9 verse 17 wrote, For a will takes effect only at death, since it is not enforced as long as the one who made it is alive. And so, you know, honestly, Hans, you challenged me by, you know, Robbie, why is the word testament come after last will when, you know, you got the Old Testament, you got the New Testament, and it really was a beautiful thing to think about that the entire scripture or people testifying like you would if you were watching somebody, all wills require two signatures, and so you're testifying that this is what this person's will was. Well, you know, the whole scripture is kind of a lot of different 66 books of the Bible testifying to what, you know, we pray every morning, God, your will be done. And it kind of falls to all of us, doesn't it, Hans, that we are testifying to what we believe God's will is?

We are. And, you know, we have a responsibility, I feel, as Christians, you know, to plan out our faith and to plan out, you know, like where we're going to go for eternity. And do you know where you're going to go after you die? And in line with that, we have a responsibility to our family and the people that live beyond us on this earth to have it in writing and to have a last will and testament and to have a current last will and testament. And so that's what we're talking about today is that and a few other documents that I'm going to recommend and that we recommend to most people that come into us for retirement planning. Yeah, it's kind of cool as I think about those other documents and I always refer to Hans as my goad to remind me that these are, you know, like the, you know, Paul talked about you kick against the goad, you know, the goad's telling you, you need to go get these documents done. You need to go get these documents done. But as I was processing, the whole concept of will is all of these documents indicate what your will is, healthcare, power, attorney, these different things about financial obligations, even while you're alive are still your will, you know, the one document that comes at the end is sort of your last will, but that they all are providing legal documents, legal ways for people to know what you actually wanted to have happen.

Yeah. And, you know, most people that come in to me don't come in asking for this stuff. I mean, what they're looking for is some social security advice, some Medicare advice. They've got their 401k and they want to know, like, how am I going to distribute that?

What kind of taxes am I going to play? And then as they come in with questions, what we do is we attempt to influence them to prepare in all seven areas and seven worries of retirement. And this is clearly one of them, but people don't really come in asking for this.

This is more of us just checking in. And people usually interrupt me, oh, well, we, yeah, we have those, but we did those when the kids were small and we need to redo those. I mean, people will interrupt me when I'm bringing up this subject. Um, like we need to do that, you know, and it's kind of like, well, no kidding. You do to some extent. Right. I think of these, like, they're the basics.

Like, you know, Vince Lombardi held up, this is a football. So can you kind of give us that? What, what are the basics of these, of these documents?

Okay. So you need a last will and Testament. And sometimes people will call them, call this a second document is what's called a living will.

And it kind of goes against the scripture that you read to us is, you know, how can a living will be a thing that's effective when the person that made it is not dead yet. But you know what a living will is where you're just expressing your wishes of if you're, you know, if your brain is asleep and they got you out living on the machines or that, that kind of thing about, you know, whether they would stop resuscitative care and that kind of thing. So, so you, you need a will, a last will and Testament, and then you, you know, as part of that or a separate document, you need a living will. And then the other three documents are, you need a financial power of attorney. And that is somebody that can basically do business on your behalf and in your interest.

And you know, when people are a married couple, I mean, obviously the first power of attorney is the other spouse, but you need to put somebody down younger, like one of your most responsible adult children as the second power of attorney, because your spouse may not be in a position to do this, but in any case, you need a financial power of attorney and you need a healthcare power of attorney. And it just gives you authority over healthcare decisions. It gives you the ability to, or gives somebody else the ability on your behalf to make a deal with an assisted living. I mean, just to check you in and write a check and give them a credit card and to look at your medical record, to, you know, just any type of healthcare decision, decide whether you need surgery or whether we're going to do it or not when you're incapable.

Okay. And then the fourth one is what's called a HIPAA release. And HIPAA is just simply, most people are familiar with HIPAA when they go to the doctor and a lot of them will interrupt me and say, oh, we signed all that at the doctor. Well, that's fine and good for that doctor and to that person. What we want is a HIPAA release that another person can go and see your medical records when they really need to, like one of your adult children or something, when you have, when you're incapacitated and they can get in there and look at things, pick them up and take them to another specialist, you know, just all those kinds of things. They can call in and ask about your treatment, your care. They can pay your bills, that sort of thing.

So it relieves the doctor of the HIPAA problems for them so that when you get that document, they can just talk to you like you're the patient if you're the adult child. Darrell Bock Yeah, so there's no way I can express to our audience what a God send Hans was to me on this particular subject because, you know, almost at the very first time I met him, it was like, you need to have these documents. And so I immediately went to my dad, who was at that point in time, you know, in relatively good mind and all these things, I said, Dad, we got to have all this stuff. So we had to have a power of attorney for, you know, so that we could sign on his financial stuff at the bank and all that stuff. And we had the living will and we had the healthcare power. We had all those documents. And I had no concept at the time that we got those documents done, that within three months, I would use every single one of them. And in some case, save my dad, like $10,000 when, you know, the an alarm company tried to rip them off, but I had the power of attorney. And as soon as they started trying to throw their weight around, I was like, Whoa, I've got this right here.

Well, send it to us. Well, as soon as they saw that, you know, they backed off immediately and realized that they were dealing with me, not my dad. And all of a sudden, all sorts of things changed. And we got that part undone. But then on the on the medical stuff, like, Oh, my goodness, you know, they were taking him into all these rehab centers, and all these decisions had to be made.

And he was not in at a point, Hans really where he really understood, or could act on his own behalf. And so you had all his financial things that all his bills that had to be paid, I just can't even begin to express that my goading friend here is doing things for your family that just going to be wonderful. If we will get these in place, you know, while we're still able to get it done, and they really are every one of them really just explaining what your will is when you're not capable of providing it right.

Well, yeah. And so let's get down to the practical matters. Very few people disagree with me that they need to get this done. I mean, it just so this is probably the easiest sale that I make in the whole process.

But I have trouble closing this sale. Okay, I mean, in other words, people say, Well, we need to do this. Now we actually need to go do it. And what I've set up, and you actually use this service, it's only available in North Carolina.

Okay. But I'm going to get to you folks outside of North Carolina in a second how we deal with that. But we have an attorney right in our office in Durham. And then, you know, she can be available in our Charlotte office and in our Greensboro office. But she doesn't even have to come there. Like I can go there. And we can just get her on the phone.

And we can walk through everything. Most of the dealings people do with me. And then, you know, we get her on the phone, and she asks you a bunch of questions. And she just but most people don't need a real sophisticated stuff here.

Okay. And to the extent that it's sophisticated, it's usually financial is that part of it. And she relies on me for the guidance on that. So she doesn't charge a lot to do this. I mean, it's, you know, it's like, let's just say six, 700 bucks for a couple for eight documents, and, you know, her time and all that kind of stuff. And, you know, when we get somebody that's a very limited means, you know, sometimes I've talked her into just just a couple of hundred bucks or something to cover. I mean, we're, we'll do the work, we just want to get the work done for people. And then, you know, obviously, if somebody needs a trust, you know, then it's going to get into a few thousand dollars to put together a trust and write up a trust. But most people don't need trust. I mean, all they need is these four documents.

And we do that, she can do that anywhere in North Carolina. And so if you want to get in touch with us, and have a meeting, I mean, we're going to ask that we want to look over all your finances and your Medicare insurance and long term care insurance and life insurance and your IRA and 401k, because all of that's relevant to your will and relevant to financial planning. But if you want to bring this in as the primary thing that you want to get started with, we'll be happy to help you. Darrell Bock Wow.

So we've got to move to a break. We want to remind you that, of course, this show is brought to you by cardinalguide.com. You know, you can go to Cardinal Guide, put the com in there. And all these documents are well explained in Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement, because really are just the basics of finishing well here is that you communicate with everybody legally what you actually want in these different kinds of situations, which these documents are phenomenally helpful, in my opinion, in finishing well.

You can get all this information, obviously, at cardinalguide.com. Just email Hans, and he would be delighted to send you a book. And when we come back, we've got lots more goodies when it comes to the last will and testament.

Be right back. Hans and I would love to take our show on the road to your church, Sunday School, Christian, or civic group. Here's a chance for you to advance the kingdom through financial resources by leveraging Hans' expertise in qualified charitable contributions, veterans aid and attendance, IRAs, Social Security, Medicare, and long-term care. Just go to cardinalguide.com and contact Hans to schedule a live recording of Finishing Well at your church, Sunday School, Christian, or civic group. Contact Hans at cardinalguide.com. That's cardinalguide.com.

Welcome back to Finishing Well. Today's show, Last Will and Testament, which, you know, the Bible's all full of testaments, so God's will is testified to, and he's given us a picture of something that we can do in our own lives to help us finish well. And Hans, you were saying what could be done in the state of North Carolina if people needed these services, but you've got to answer for everybody everywhere. Well, we've got clients all over the United States that we've never met face to face, but we feel like we know them and serve them better over the phone with our, and most of them, they too, than the people maybe right down the street in their town that they can see regularly. You know, it's just the modern thing is we can serve people in 50 states in the District of Columbia, and as far as insurance, we're licensed in all 50 states, and believe me, that's a deal to get all the licensure done, and it's a big cost, but we're there. And also, you know, in the financial business, we've got all that stuff covered in almost every state.

There's a couple that are out of the deal, but we have a way to work around that. And then when it comes to the legal stuff, anything that's federal and tax where you need a lawyer, I mean, our lady here can help you or help us help you when it's federal, but when it gets down to the stuff that we're talking about today, which is, you know, your last will and testament, your power of attorney, financial power of attorney, health care power of attorney, and HIPAA release, that needs to be done specifically in the states you live in, because the laws are different in every state. And so, what we do with that is I simply find you somebody. You may already have your own attorney, and if you do, then I'm going to still talk to him or her to make sure he knows or she knows, and I'm going to give them my book, or you're going to give them my book, just to make sure that we're in line and we're thinking down the same way. You know, but a lot of people don't have that, or their attorney just doesn't specialize in this stuff, and so I just find them an attorney. You know, it takes me about an hour, and if they don't answer their phone, they're deleted, you know, and I just, I have a way and a couple of services. I mean, just call them, and you know, if they won't talk to me and they want to call me back, then they kind of get deleted. I mean, that could be a little different in some small towns, but you know, I generally, then I go through and I tell them what the people want, and I tell them a little bit about the people's situation, and I want to make sure that they're of a similar mind to me, and they're not going to start recommending a bunch of stuff that people maybe don't need or don't want, and then I'm going to find out how much they charge. If it's over a thousand bucks, unless we're in New York City or Los Angeles or something, or even there, maybe I'll try to do a little negotiating, but a lot of times it's just, a lot of times I have to call four or five people. I don't talk to them very long, and then all of a sudden I can just tell after a short conversation, here's my person, and then, you know, I'm going to do that where they're proximate to the people and just set it up. I mean, I've done that many, many times, and the people are very satisfied, and the attorneys are very satisfied, and it's just, you don't need to find Perry Mason to defend you for something.

I mean, you know, this is pretty routine stuff. After we get the will done, the interesting thing that you helped me understand is now we need to figure out what we can get done to get it outside the will. Well, yeah. I mean, the probate process, which is, you know, what probate means is that you've got to go open up an estate after somebody dies, and you're the executor, and you've got to go down there, and you've got to go through a bunch of legal hassle, and this can be, take some real time. As you know personally, Robbie, through what you've been through with your father. Oh, absolutely. And most people listening, you know, have been, if you've got a few years on you, you've been through this, and stuff gets tied up forever, and you've got a bunch of legal stuff and taxes, and it's a long time before people get their money.

That's just the way it is. It's got to go through the legal effect, and hopefully you have a will, because if you don't have a will and you die intestate, the estate has a will written for you. But what we want to talk about is you're going to have a will, you have it written up, and it's really about the only way to transfer property. So, you know, your house needs to be in there, your car and possessions that you have. But most things that are financial, we can set them up in such a way that they bypass the will. We want to really avoid things going through the estate and by will and for transfer, if at all possible. Does that make sense? Well, it makes more sense to me than it would have two years ago. But, you know, it's actually wonderful the things that I saw that took place, because my father's IRAs and certain accounts that were outside the will, bank accounts or whatever, that had, you know, what's it called, transfer on death?

Yep, TOD. None of that stuff was looked at within the will or looked at within estate taxes. I mean, it was all outside of that, and it wasn't, as you said, it just wasn't anything to deal with. But other things that my dad had that he did not pass outside were some financial accounts, and oh my goodness, the time it took to get gold medallion stamps and things that I never even knew of were financial instruments and different kinds of lawyers and people involved, all because this stuff was inside of the will, inside of his estate, which could have been, with a good financial plan, you know, avoided and passed right out, right? Just transfer on death or, you know, I had a beneficiary like an IRA or something.

Well, yeah. I mean, so now we're talking about life insurance. I mean, the will portion or the last will and testament portion of a life insurance policy is a beneficiary designation. And this is how simple a beneficiary designation is.

It says, Hans Schile, born July 2nd, 1958, and then my social security number, which I'm not going to read it out to you, but you know, that needs to be on there. And then they want a phone number and an address. They want a percentage of it. So if you're going to leave two people, they want to know, do they each get 50% or whatever? So for Hans Schile, does he get 100% or 50% or whatever?

That's it. You don't need a lawyer, the insurance agent filling out the application for you. You die. They send your death certificate into the insurance company and they just send a check made out to you. It's the best last will and testament or another way we could put it.

It's a way to fund your wishes of the last will and testament, even if it's a small policy. I mean, let's just take some of my clients where we have a lot of second marriages out there, especially when you're sitting at retirement and people that have been married for the second time for a long time. But they had their kids with their first spouse. And so they got her kids and his kids.

And they're all, you know, when they're a good, happy family, I mean, they're all getting along fine. You know, a lot of these folks, they haven't really thought about that. You know, a lot of people in today's day and time, when the first spouse dies, we first of all, they need to have good wills in place, which is what the show is about. But then, you know, when we get done when we get done settling up everything and adding it up, that surviving spouse, whether that's the woman or the man, we don't know who's going to go first, the person that lives on needs all they got, which really precludes leaving something to, you know, like, let's say it's the man that dies, and then she survives. And then what are her stepchildren, his adult children, you know, we in financial planning, we can't leave anything to them, we got to throw it all at her because she needs all of it to keep on living, it's going to be a reduced income, or vice versa. So life insurance is a wonderful way to take care of this problem, in the sense that even a small amount, I mean, if you know, if there was a $10,000 policy that would be purchased at 65, and there's two kids, and they get 5000 each, there's a world of difference between zero and 5000 when you attend your father's funeral, and everything is left, which you know, it has to be to the surviving spouse, what is your stepmother, I'm just, I'm just telling you, I've been through hundreds of these situations, and just to talk through all of this, and then plan for it. And then life insurance can be used by people of little means to just, and that could be your church that you just you just want to make sure your church gets 10 grand, or your church and your two children, you want all three of them to get an amount, and you could buy one policy and just set up the beneficiary and everybody gets a check. And this is completely out of the will. It has nothing to do with the will.

Yeah. And, you know, even another practical thing that my mother kind of did versus my father, you know, she said, I'm going to give it do all my giving while I'm living. And so she, you know, when she knew she was getting close, she started handing out all the goodies, you know, to everybody based on what she wanted to do, and they were just plain gifts.

Well, I think about it, I mean, that just goes right to them. And compared to my father, who I love, and he was a great way better, you know, financial planner than anybody I knew in my life, probably prior to him. But he had all this, you know, he'd bought gold, and he bought silver. And he wanted it distributed a certain way. But because it was inside the estate, oh, my gosh, what I had to go through, because they were all in these golden coins. And they couldn't be split evenly amongst the people he wanted them split with. So I had to sell some of them.

And, and then there was all this stuff was taxed, because it was inside the estate. And I just thought, you know, gee, Dad, I wish I would have asked, Dad, don't you want to just give out that gold now? You know, you don't need it. Why not just hand it out?

And watch them watch the big smile on their face when you hand them these gold coins? Well, absolutely. And just, you know, when I'm meeting you in your 60s or 70s, and you're still of sound mind and kicking around, you may not want to do well, this may not be at the top of your list to do, but I'm just saying that, you know, if I had met your dad 15 to 20 years earlier, and then he would have shared, I would have gotten all that out of him, then I would have told him what to do with all that. And that's just, I mean, it's just very difficult when somebody passes away, and they think your dad thought he had done everything properly. And he even did the stuff you asked him to do a couple years before he died.

And still, there's stuff there. And so we just go through a checklist with people when they come into us for retirement planning, and really show them how to dispose of all their stuff and, you know, make suggestions. I mean, it's your decision. You do whatever you want to do. You don't have to do the stuff we recommend, but it's just, it's all to make this an orderly process when you go away so you're, when you pass away so your children can, or your surviving spouse can just have some peace about things, and they're not talking about money.

It's all part of finishing well, which is kind of why we have this show. So we're so grateful you spent time with us today. Again, this information is a bit complicated, and so Hans' book, The Complete Cardinal Guide to Planning for and Living in Retirement When it Comes to Estate Planning, this stuff is amazing, well worth it. All you have to do, really, is just go to cardinalguide.com and email Hans, or download the free PDF of what we talked about today. We would love to have you do that. Again, cardinalguide.com. And thank you so much, Hans, for just, you know, what this is gonna do for so many people.

You know, we may be all in heaven going, hey, look how this worked out for everybody. Thank you, Hans. Yeah, thank you. 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 Hans' 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 Hans' 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. Cardinalguide.com. This is the Truth Network.