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Do You Need A Trust?

Finishing Well / Hans Scheil
The Truth Network Radio
April 23, 2022 8:30 am

Do You Need A Trust?

Finishing Well / Hans Scheil

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April 23, 2022 8:30 am

Hans and Robby are back again this week with a brand new episode! This week's show is about trusts. Do you need a trust? What is the purpose of a trust? There are those of you that may have one and not need it. Hans and Robby get to the bottom of this topic. 

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!

You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at  Find us on YouTube: Cardinal Advisors.

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The cuticle of the Russian nightmare know the devil's nightmare here from it's time to mount up challenging men step into their true manhood. Your chosen Truth Network podcast is starting in just a few seconds. Enjoy it, share it, but most of all, thank you for listening to the truth. Podcast network. This is the Truth Network welcome to finishing well brought to you by Cardinal certified financial planner longs Shiloh best-selling author and financial planner helping families finish well for over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started. Finishing well, finishing well is a general discussion and education issues facing retirees partner advisors. I'm sure I'll see if Pete some insurance this show does not offer investment products or investment advice on welcome to finishing well with our certified financial planner harm Shiloh in today's show is do you need a trust so as we get into that idea here is, I think Hans will point out so clearly it in. This is Nina what's the purpose so to speak.

And so there is really beautiful things in the Scriptures about purpose, especially you know I love the the bird song from the 60s turn turn turn.

You might remember in Ecclesiastes 31 it says to everything there is a season and a time to every purpose know, under heaven, and is as you think about the purpose of why is it that you're doing and why are we handling our finances. What's this money for is what Hans often said this, or this case once what's the purpose of the trust, or even from God's perspective as he told you might remember the story of Saul when he you know was sacrificing the sheep and all thinking that he was going to get on God's side for doing that. Rather than obeying God and not doing away with other things in the city that he was supposed to. And Samuel said to him, does the Lord delight in burnt sacrifices now because that's not the purpose he delights in obedience and and so we have this opportunity right as we are learning today from Hans to see kind of what the purposes are in in these things, and how we can you know best. Bless God with with the end of you know is as we handle our finances as we finish well. So Hans taken from their several people in the door here and get engage for financial planning when there early and mid 60s typically some of them in their 50s. Some of them in their 70s but they're there, and in the us to help us plan out their retirement or the rest of their retirement and many of them will, I need to trust or some of them will come in of Artie got this trust and boy did great.

You know, and more. I need this or so-and-so told me that my brother-in-law has a truck and I was want to know okay what good so why do you have that truck what what what why did you start well I just to avoid probate.

You know it's obvious he almost looked at me like you know me, don't you know you really need to trust for whatever they told us at the seminar and you know that if I were talking about this to his trust number one are expensive or inexpensive I guess is relative possibly maybe would be a better word because the good deal of money to set up a trust in any costs even more money to maintain so that there would be one reason that you would want to trust and then the second thing you need to know about trust is many times they don't accomplish what you thought they were going to accomplish so you can have this purpose for this goal.

And if it's not set up properly or to some certain event happened, it is as I just met a lot of trust on the backend, and people with trust beneficiaries of trust that it is when working out like the original grantor thought I'm happy to be one of those. My father put one of his life insurance policies. If you know the beneficiary was the Robert B. Delmore, I am revocable trust and I was like let them know you have against number one. He indeed passed away and so I just leave it where he was supposed to use that money and that life insurance policy to pay for his final expenses and I didn't even know what a revocable trust was. Fortunately, I knew Hans of the at and so as we started to work through this. The trust had never even been set up so there was no money in anything yet. I we had to go get a bank account. We had to get all sorts of signatures and stuff in order to get it just so that we could get it open it and close it and it was just crazy.

There's an example of trust was set up by your father to avoid probate, and what he did the only thing he put in the trust and even input their life insurance. He put it there but beneficiary so in order to avoid probate.

He actually took the nonprobate asset and put it in the trust so he brought it in the program. Is that correct that I know exactly because I understand that if he just left us as the beneficiary and I am to come straight test, not anything to do with probate we've been able to pay the expenses and away we went. But instead boy had started, just a home. You know, massive undertaking versus what the original purpose was. He thought to avoid probate.

Not realizing life insurance already avoids probate. Okay, goalie something here and I don't want to make it sound like every lawyer every person that represents the lawyer that's run a seminar talking about the use of trust in order like that because of nothing there there there are many programs out there. Were there going be like ours is trust in certain situations. Trust his vehicle is used in estate planning. To accomplish an objective. Then there is what we call referred to as the trust middle and that is not an attorney or firm or a law firm that same trust for every guy okay and so they have a seminar this 50 people in there all 50 of them needed trust and then they needed trust for this same purpose, which is avoiding probate keeping away from the publicity of things and then they all need the same trust to another going to do is take it out of the wordprocessor and just fill in the blanks with the name and the address and that sort himself. Those are not good when when when something is marketed to you that way where it same trust for everybody in the room because of antitrust.

Properly done, and I don't think your father was in that situation. I think that this trustee had a real purpose for this and he thought that his wife was can live longer than he was and so he had thinks that restarted in the process of setting things up and then she died 40 and then it's really create a mass and life insurance by itself is that to the same thing is entrusted to keep the proceeds out of probate keeping away from the IRS and had your father named you and your brothers and sisters as the named beneficiaries on that thing changed it that way on that life insurance after his wife died that life insurance company would just sent you a check each one right and we just which it was meant to pay his final expenses anyway and it was just been able to do that is it as it was. It took me almost 90 days to get all the paperwork done the even get the insurance company to sit because you have to have an account number and have the county can have a trust is it was it was some I'll never forget. Oh yeah, well, let's talk to quickly about why would you need to trust what I did my video for this and I sent it to you and Scott go through the list So when is a trust beneficial is if you have a desire to manage your money and your assets beyond the grave. So another beyond your life if you think your children or grandchildren going to squander the money or spend it on things or spend it all at once. A number of things you can you can set up a trust with the money in there to death or before and then the trustee will distribute money to them according to your wishes. Okay, so there there would be a purpose if he has special needs child who's not a child anymore. There an adult and your view providing for them which a lot of people are in that situation really have a adult child who's in their 40s and 50s, and now the region, the later years in their thinking about. I want this to keep going beyond my lifetime so I was like to set up a special needs trust and I like to do it in such a way that my assets are protected. So the child or the adult child still gets her state benefits if we want to avoid publicity and you know every people are not reading public records. Try to look for you like my estate or something that's more of a very wealthy people can sign where you can use trust so that is not out of the public view how much your mansion sold for or that kind of thing I mean that. That's kind of a benefit of the avoid probate. You see a period of incapacity, not where you going to be needing long-term care and you want to set it up properly so that you will be cared for and home health care and long-term care will be set up pay for properly and delivered to you properly. You could use a trust that talking about a Sprint spendthrift protection. You know I have a client that the beneficiary and her mother put just her inheritance. Not relevant trust just because she knew she would ball and so it just has spaced it out and make sure there would be something for that lady signed or the grantor's grandson so that you spendthrift protection for credit all kinds of reasons to set up trust, talk bad about what when I'm really talking bad about is just everybody thinking they needed trust is the only way to avoid probate riots well when we come back to getting on a break, come back. We have more ideas on the good use of the trust and when you'd probably don't want to do that. There's better solutions like man transfer on death and all sorts of things. I think you're going to be very anxious to hear, not to mention get those beneficiary's name properly when we come back as more from Cardinal died of Hongqiao are certified financial planner in his book the complete Cardinal guide to planning for living in retirement is solid Cardinal will be right back. Hans and I would love to take our show on the road to your church and Sunday school Christian or civic room.

There's a chance for you to advance the kingdom through financial resources by leveraging Hahn's expertise and qualified charitable contributions veterans aid and attendance and IRA Social Security care and long-term care. Just go to Cardinal and contact time to schedule a live recording of finishing well at your church, Sunday school, civic group contact time to Cardinal guide back that's Cardinal welcome back to finishing well certified financial planner. Hahn's silent today show is do you need a trust, and in the video that they just recently did it at Cardinal advisors pine away at their YouTube channel.

You know, Tom made this unbelievable point reset. Almost 70% of the people coming in to see you say what I needed.

Trust online. That's is phenomenal, scary number to me Hans it would be about the last thing that would ever come out of my mouth, but apparently a lot of people think that way because they been marketed to a trust that we mentioned earlier and get mailing and the other, several pages along with all the explanations are very dramatic.

They've either attended the seminar or their brother-in-law as her sister and just generally speaking, I think the people to come into us come in with.

They've had their there's always that brother-in-law, or sister-in-law or sister, neighbor or somebody they play golf with us have an expert on all things that really spends a lot of time telling them about financial planning and estate planning.

And that's where it comes from the ad is pretty easy to deal with me.

Once we start outlining things for people and their unit.

Usually we can sort out that you know the 70% to 4%. It really needed trust and we can deal with the other 66% and usually relieve when they find out about you know what we can do like everything that involves money that has money, financial account, whether stocks and bonds, brokerage accounts, IRAs, money in the bank can pass out of probate and so a lot of folks are really slack on this part that you can take care of it without encompassing somebody like us is that your beneficiary designations update on your life insurance on your IRA on your 401(k) and most bank accounts. People don't have a TOD or transfer on death but it transfer on death on a bank account is very similar to beneficiary designation just says that when I die you this money for this account in the name of the person or persons on TOD are goal is to make things very smooth for the families of people who passed away.

There are clients.

Our goal so you can lay things out in just anything you buy from us or you bought from somebody else but were doing financial planning and tell me what to do with it. Get all the beneficiaries out getting written like they need to be written so which is to a degree accomplishing the same thing people think they needed trust.

I just want to be clear that for most people trust can be avoided and the cost can be avoided through the use of beneficiary designations and supplanting out of place that it can't be avoided, at least in North Carolina is unrealistic. So you know when you when you have the family home or your home.

If you're an older person and you can't put a beneficiary on a house so that is something that you have to go through probate for another. There is a way to do something with the D that you could do but you may not want to do that because you put your kids on the deed to your house, you open yourself to a whole slew of other problems.

In the event that either one of them would die before you work it would get divorced or so, you may not want to do that so that there could be one area that beneficiaries will work to avoid probate. But that's not enough reason to set up all trust thing I want to bring up as we have so many people bring us a trust and they just want quiet about it or don't drag this trust to get this trust and we don't usually try to really get down to the nitty-gritty, but most of the people that have trust the commandos. There's nothing in the trust that there like your dad just went to the seminar. They listen to the thing they paid to gather five grand. You know, perhaps they did. It will so they did their wills that was included in the package and in their wills.

They told that there saying that everything is going to the trust or whatever and they set so the put those in place, but the trust doesn't really mean much if it's a revocable trust like they sell in trust mills unless you actually put stuff in there that some people do this but many don't they have this trust document and they don't exactly know what to do with you gone that route in it where you want to go, then we can start put stuff in there. We got it with the deed to your house and there you deed your house in the trust and we got up, open a bank account in the name of the trust and just wouldn't get all your assets into the trust before you die so that you'll still be there and then the trust will actually be the thing that should grasp if that's what you want Many people do that is based on listen to a radio show.

I'm just making the observation that a lot of these trust mills set up sell the trust the people pay the five grand.

Go through and do all the work within two years later they discovered a big notebook with all that stuff in there and they don't have. They never put any. They don't really know how to do okay Diana, take some work.

I can tell you in the in the right banker to know what they're doing even set one up so Will then let me at that a lot of the people selling trust was elected doing it, even though you can't put IRA money in trust, you can't take your IRA and take a trust and then just put the trust that the owner of the IRA. The IRA owner needs to be you.

Until death nisei Robbie don't say hotshot. Can't say the trust for the estate or the sentence, such as child trust. So there.

And if you did get the money into the trust, you would have to cash out the IRA pay all the taxes and then you put the remnant in there and a lot of lawyers don't even maybe they know that but they don't they don't have an answer. You have people in the audience were most of their money is in an IRA or 401(k) any and so they're buying this trust, thinking that all the money in the IRA is going to go in the trust. This is not, and you would want to anyhow because you have to pay taxes all at once and the beneficiary designation accomplices. A lot of the same purposes of trusting that just comes with the IRA than a little bit of a rant here today about trust. I guess that's the idea that we need one and clearly you know it's it's a know when you see people that you feel I can been taken advantage of it. You know it's always a difficult thing to to try to help us reason through things that we thought we knew we thought were sure this was really important because you know the idea of keeping things out a probate is that OSs can be a lot quicker.

Mike Mike my families going to get this money a lot quicker. And all these other things that just doesn't turn out to be the case. One is not really well-planned or thought thought out and people are generally when they've had that thing for a couple years and they've gone throw things. There were a product trust. They don't know what prompted their product and in so before you actually eat out brand reality.

And that's not necessarily the easiest job in town when they're telling us they want to do business with us. They want to follow but then we gotta manage the fact that the I guess you could look at it that way that they made a mistake or they little bunch of money and time into something that when I can use or would have charge more money to make it useful. And so we got back him down a bit and allow them to save face so when you get my drift of that that that is difficult before we then go in and really helpful to understand, and I personally thought that the trust for the special needs child.

Right fit. No reason for you to pass away, and they would get a big inheritance, then they would. They no longer qualify for their Medicaid and so you know that one was awesome. I thought you know there's a real need, right there in a real understanding of what therefore they are better than that. They created thing 10 years ago called the able account eight BLP is an acronym I couldn't tell you this. Second, what it stands for, but it is the special needs trust doesn't cost anything. Essentially, for Putting more than 100 grand in their but a special needs child on Medicaid and receiving Social Security check every month doesn't really need much more than 100 grand and they accomplish the same purpose so you can open a book and I felt a few clients do that in their major people of moderate means you can't put in more than 15 grand a year and there is a number of things but so so it's not really a trust account but is effectively a special needs trust set up where you don't have to go you know lawyers set up open one and it comes with all the stuff of special needs trust speaks right back to the point that wow if we come into a financial planner with the idea of no limit sure what my needs are and let them recommend you know how to work through these things could be that it's it's a much easier than coming in with a lot of urban legends yet. Well said. And I'm not complaining about my job. Is this something I would just about every client becomes and I don't talk about.down away from that and get them in another place for their own good in this part of my job so in trust seems to be coming up a lot of Tom's idea to talk about this. We had time I go over a few stories from Tom that Gentiles might associate he's dealing with this all the time for plans always free from the time before he ran out a shell, but again the idea is if you need this information clearly. You know that's what Cardinal guide is for Sita's got a cardinal and there you can click on either talk to Hans or talk to Tom at our get their book the complete Cardinal guide to planning for living in retirement.

Again, the video on the same subject. Is it Cardinal advisors Nina, do you need a trust, and so thank you Hans wonderful show you finishing well is a general discussion and education of the issues facing retirees Cardinal Cardinal advisors upon trial CFP some insurance this show does not offer investment products or investment advice. We hope you enjoyed finishing well brought you by Cardinal visit Cardinal for free downloads of the show or previous shows on topics such as Social Security, Medicare, IRAs, long-term care, life insurance, investments and taxes as well as constant 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 to get Hans book go to Cardinal 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 Cardinal Cardinal this is the Truth Network

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