Wills, Trusts & What Most SC Families Get Wrong About Estate Planning

Most people assume that having a will means their estate is taken care of. But a will does not avoid probate, and probate could cost your family thousands of dollars, months of waiting, and more stress than you'd expect. 

If you've been putting off estate planning because it felt complicated or expensive, this episode of ClearPath Retirement Radio is for you.

Stewart Smith, LUTCF®, RICP®, and Mitch Davies break down living revocable trusts in plain terms — what they are, who needs one, how to fund it, and why they may be one of the most practical steps a retiree can take right now.

In This Episode: 

→ Why a will alone does not avoid probate and what probate could actually cost your family 

→ What a living revocable trust is and why it is simpler than most people expect 

→ How to fund the trust — what to retitle, what to name as beneficiary, and what to leave alone 

→ The step-up in cost basis question: you do not lose it with a revocable living trust 

→ How trusts address blended families, aging spouses, and complicated ownership situations 

→ Why healthcare and financial power of attorney documents may be just as critical as the trust itself 

→ Why beneficiary designations need a review now, not someday 

→ Mitch's Market Minute: what the recent sharp market recovery means for retirees 

Ready to get this taken care of once and for all? 

ClearPath Retirement Planning helps retirees and pre-retirees in the Upstate SC and Columbia, SC areas build a complete estate plan — including living revocable trusts, power of attorney documents, and beneficiary reviews — all in one place, without the confusion.

Ready to stress-test your retirement plan?

ClearPath Retirement Planning helps retirees and pre-retirees in the Upstate SC and Columbia areas create tax-efficient retirement income strategies. 

📍 300 Executive Center Drive, Suite 104 | Greenville, SC 29615
 📞 (864) 775-5033

Schedule your complimentary consultation today at www.clearpathretirement.com

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Important Disclosure:

Investment advisory services offered through Alphastar Capital Management, LLC, a SEC-registered investment adviser. SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Fixed insurance products are offered through Clearpath Retirement Planning, LLC and Alphastar Capital Management is not involved in the offer, recommendation, sale or management of commission-based fixed Insurance products. Alphastar Capital Management and Clearpath Retirement Plannin...

Transcript

SPEAKER_01 0:00

Welcome to ClearPath Retirement Radio. From retirement income and tax planning to protecting the savings you've worked a lifetime to build, this is Real World Financial Talk, designed for real people. People who want clear answers, not sales pitches, so you can make informed decisions and plan for retirement with confidence. Now, here are your hosts, Stuart Smith and Mitch Davies.

SPEAKER_02 0:23

Good morning. Welcome into Clear Path Retirement Radio. As always, I am Stuart Smith here with Mitch Davies. And we are here today to talk about trust and estate planning for retirees. How are you doing today, Mitch?

SPEAKER_00 0:41

I'm doing good. Stuart. I'm uh I'm excited. This is gonna be a this gonna be a good one. You know, this is something we've seen more and more. You know, this trust, estate planning has become more and more accessible over the years, and we've got an exciting solution to this thing, and I'm excited to get into this today.

SPEAKER_02 0:56

Well, you know, I tell you, um what I've noticed over the years is estate planning, it it tends to intimidate folks, and they tend to kind of shut down when you start talking about this subject. And um what I've learned is it's really not as complicated as we make it. Not and um so we're gonna help today, we're gonna help give you a little clarity on that, help you understand, you know, when's a trust needed, when is you know a will suffice, um, all of those things that that um people ask us and and wonder about, we're gonna try to answer today. And let me just start by saying that, you know, some people come in to us and they say, you know, hey, I've got a will, so so I'm good, right? Right. All the time. And that's a very interesting question because always uh my answer is, well, it just depends on what you're trying to accomplish. So, you know, if you have your assets, and let's talk about it for a second, if you have your assets, you have investment accounts, you have insurance policies, you have annuities, you have those sort of things, and you've named a beneficiary on those on those uh accounts, then you know, those things it would are gonna bypass probate as a true beneficiary designation. And so you really don't have to worry about those things unless you don't want all of those assets passing to the beneficiary all at one time. Right. And that is something that we hear more and more of nowadays where people don't want that, you know. I had someone in the office the other day and they said, Listen, I don't mind if two of my kids get the money all at once, but that third kid, heck no. I tell you what, um, he will go through it like a drunken sailor. So um I want to make sure that we stagger that and and give him so much every year or every few years, and that can't be accomplished with a will. Trevor Burrus, Jr.

SPEAKER_00 3:07

It can't. It can't. And this is a you know, people hear this kind of planning and hear this kind of, you know, idea and get, again, intimidated. You know, people think a trust fund, right? I remember hearing the term, you know, before I get into this business, I'd hear the term a trust fund and assume it was this huge, complex, legal thing to set up. But you know, we can accomplish that sort of planning for people at a super low cost, super easy. You know, it's it doesn't take very long. And it's something that's much more accessible than you might think to accomplish that level of planning. And we'll kind of get into that today, but it's uh it's it's been exciting.

SPEAKER_02 3:41

Yeah. So, you know, back to the will. You know, listen, uh a will is fine for, you know, if you don't mind stuff being probated. And, you know, that stuff that we just mentioned, the bank accounts, if you've named a TOD or POD, and that's a transfer on death or paid on death on those type of accounts, excuse me, then those will bypass probate as well, again, all being dispersed at one time. So, you know, that's if you're good with that, then the stuff you gotta worry about, and the stuff that we talk about the most is real property. And what I mean by real property is typically real estate, things that, you know, are going to get caught up in probate typically. And, you know, how do I handle that stuff? And a lot of times a couple will be sitting with us and they will say, Hey, we've got our home titled Joints with Rights of Survivorship. And what that means here in South Carolina is that, you know, it's joint with rights of survivorship, meaning it's jointly owned by that couple, and if one of them passes away, all the the ownership transfers automatically to the living spouse. And that's great. That's awesome. And so most people think that's as far as they need to go. Right. And they will, you know, say, you know, we're good, right? And I'll say, Yeah, you're good until the second spouse passes away. And then what happens, right? Like then what do you want to happen to the house? Do you want the kids that are going to inherit it? Do you want them to have to go through probate? Because if you don't mind them going through probate, then yeah, I guess you're good. Right. But you know, most people they don't want to go through probate. And if you've ever gone through probate, and I ask this question a lot in workshops, it's not a party. It's not right, it's no fun. Probate is a hassle, it costs money, it takes time, it ties assets up, and so you know, to if you have a will, the will is the probate document. It is what gets probated. It is what the probate judge uses to determine how to distribute your assets, but it does not avoid probate, which, you know, a lot of folks, that is their sole intention, is I don't want this stuff to go through probate. You know, some reasons that we hear constantly on that is first of all, probate costs money. And, you know, I gave a great example in a workshop that I did yesterday of, you know, listen, if you own a $100,000 home, a home worth $100,000, the typical probate cost on a $100,000 home or a $100,000 estate, as we would say, is three to seven percent. So at the lowest end of that, you're looking at probably about a $3,000 bill to probate that home, which let's face it, a $100,000 home nowadays is is not much, right? I mean, most homes average in the three to four hundred thousand dollar range here. So, you know, I would say that, you know, to be able to avoid that, to be able to avoid not only that $3,000 fee, but also the hassle of going to probate and filing the paperwork and waiting and waiting for that to get in front of a judge to be, you know, finalized and dismissed, having creditors be able to come at you and say they owe you money, or, you know, putting that out into the public as public knowledge, which what probate is, and a lot of people don't understand that, that you know, probate is public matter, and Pete you see you leave assets to the next generation through the probate process, you're giving everybody access to that information. So a lot of people want to avoid this whole mess of you know having to go through the probate court, having to wait, having to be, you know, subject to creditors, having, you know, all of that be public knowledge. And, you know, for folks that come to us and want to just create a trust, and what we create typically you know, 99% of the time for folks is something called a living revocable trust. Let me say that again. A living revocable trust. And what that does is it creates kind of a a funnel, so to speak, for your assets. And anything that you fund that trust with, once it's established, anything that you retitle into that trust, which is a little bit of a step, but it but not not really. I mean, it's not that difficult. A real estate attorney or a title company can handle it. It's a few hundred dollars typically to get your home retitled. But to get something retitled into that trust, now it funnels into the trust and is distributed according to whatever specifications you put in the trust and bypasses probate completely. And it's a private matter, right? And creditors can't come after it, predators can't come after it, the whole nine yards, you know, where it's you know, it's just so much easier. And we do those every day for our clients in our office where they don't have to leave our office. It is a h attorney-driven process because we've partnered with several uh local attorneys in South and North Carolina that that hand that have partnered with us on this, and we are able to bring them into the the fold virtually and build out the trust, do everything, notarize it, witness it, make sure the language is bulletproof, make sure it accomplishes everything you need to accomplish. And we do that if you have no other business with us, you can come in and do that for $1,400. Yep. So, you know, that is $1,400 up front to avoid the hassle, the the time, the the public, you know, display of what's going on, all of that on, you know, what would cost you maybe three, four, six, eight thousand dollars to get through probate. So it just at this day and age, it doesn't make sense for you to go let your assets go through probate when we can do a living revocable trust for you so easily, so conveniently, and at such a fair price that, you know, it just it doesn't make sense to have this stuff in a will anymore.

SPEAKER_00 11:08

There's no reason not to. I mean, the couple the couple steps it's gonna take us to establish the trust and get things titled in the trust and get everything into that funnel. If you've never dealt with um, you know, probate and and a probate judge in a probate court, there's ten steps. I mean, you're going back to that court multiple times. We see it all the time, right? You have to go back and then you have to get the attorney, you have to get the letters testimentary. Maybe people don't know how to do this. It's complicated. There's a lot of different steps. So we take a couple, couple hours to get this trust established, get everything titled in it, and your life and the next generation's life is infinitely easier.

SPEAKER_02 11:42

If this is something that appeals to you and you've thought about it, but you're just not sure how to take that next step, come to ClearpathRetirement.com. Let us know that this is in your thoughts, and let's set up a time to sit down and talk. We'll be right back to talk a lot more about this. Hey, are you approaching the distribution phase of life where it's time to turn the assets you've worked so hard to accumulate into a reliable retirement income? And are you unsure how to do that in the most tax-efficient way possible? At Clear Path Retirement Planning, we help retirees and pre-retirees design income strategies that aim to reduce taxes, manage risk, and create confidence in retirement. Visit ClearpathRetirement.com to schedule a complimentary consultation.

SPEAKER_01 12:29

Thanks for tuning in to Clearpath Retirement Radio with Stuart Smith and Mitch Davies. Let's get back to the show.

SPEAKER_02 12:35

Hey guys, we're back. It's Clear Path Retirement Radio, and today we're talking about trust and wills and estate planning and all of that stuff. And we're having a good time with this, Mitch. I, you know, just to reiterate here, um, you know, we're talking about living revocable trust and how easy and convenient it is to set one of those up nowadays, and how, you know, how it can just be such a powerful tool to make sure you leave those assets to the next generation in the most tax-efficient, the easiest, smoothest possible transition to move those assets with you know, bypassing probate and all of the hassles that come along with that, and all of the cost and and you know, the time-consuming process that that it that is probate. And, you know, what like I said in the last segment, I just don't understand why anybody would just stop at a will nowadays and not go ahead and take just one more little step and create that living revocable trust. Like I say, cost you fourteen hundred dollars with our office and our firm to do that. You could be avoiding potentially on the back end, you know, two, three, four times that in probate cost and hassle and you know, paperwork and all of the other things that that just don't make sense anymore. And so, you know, we haven't done a will in a long time because trusts are just too cost effective and they just do so much more than what a will can do. And so, you know, we we definitely um are big believers in taking that next step. And, you know, if you do work with us and you know, chances are you've you've got a trust or you're in the process of getting a trust, and we are, you know, the biggest question that we get is, you know, okay, now we've established the trust, we have everything lined up, I know exactly who's getting my assets. We talk through it, we talk through everything you own, down to your jewelry, your gun collection, your coin collect, whatever it is that you have a significant value. We make sure that everything is going exactly where you want it to go. We get that trust established, we get all the language right, we get it into a beautiful leather binder tabbed out, we have an electronic copy for you, we notarize it, we witness it in the office, we make that an official document, and then people are like, what's next? Right. So here's here's the way it goes. And a lot of people get real confused on this and like, okay, now I have a trust. How do I fund the trust? In other words, how do I go about getting the assets that I need to be in this trust in the trust? And that is all about how things are titled. So, you know, most people, the first step they're gonna want to take is getting your home, your primary residence, and any other real estate, land, rental properties, vacation homes, whatever those things are, getting those things retitled into the name of the trust. And a lot of people think automatically, oh, that sounds like a lot to work. No, it's really not, guys. You just get a good real estate attorney or a good title company, and just depending on where you're at, and you get and you get that executed for probably less than a thousand dollars, you know, as far as if it's multiple properties, probably in the neighborhood of two to three hundred dollars if it's just your primary residence. And I mean it's it's a quick deed, guys. It's not that big of a deal. And it don't be overwhelmed, don't be intimidated by that. It's really not a big deal. And then people will always say to me, but Stuart, we might sell our home. How does that work?

SPEAKER_00 17:00

So, you know, we you gotta understand to make this make sense, you know, let's understand the living revocable trust a little bit more. This is people get scared of the I'm gonna sell or the permanentness of this, right? With the big difference, and there's always a misconception here, with the living revocable trust, it's not its own tax entity yet. You still own it. It's still using your social security number, you still own it, and you can, you know, hence the word revocable, you can make as many changes to it as you want. So a lot of people are like, oh, I don't want to put stuff in a trust yet. I mean, I don't know what I'm gonna do in the next 10 years, right? So when we create this living revocable trust, you still have complete ownership of the property or whatever the asset that is titled in the trust is. You can still change it and do whatever you want. If you go to sell the house, it's as simple as selling it without the trust, if as long as it's a revocable trust. Now, if we put things in irrevocable trust, which most people won't have, that's a different story. But what we're doing for 99% of people is that living revocable trust where you still own it, your your tax ID is still yours. The ownership, you can change anything, you can change beneficiaries, you can do whatever you want. But once you pass away, then it becomes irrevocable. And that's when the true power of the trust is. But while you're alive, you have full flexibility with that.

SPEAKER_02 18:10

That's right. You have complete control of the trust. And you know, if you go to sell your home, basically what happens is the trust sells your home, but you own the trust. So it's that extra layer of of of you know protection between you and the actual ownership, which does protect you against other things as well, like predators and creditors. But, you know, the the basically all that happens is on the documents that you would use to sell the home, you would just use the trust name in the place of your name. That's it. It's no big deal. And then if you go buy another piece of property or another home, then you would just have that titled into the trust when you do that. And all that takes, guys, is when you get a trust, there's one page of that trust called the certification of trust page. And on that page, you that's it's got everything they need. And so you can just give them that one page from the trust document and say, I want this property titled in my trust, or I want this new home titled in my trust. It's no big deal. It doesn't cost you any more than if you titled it in your name. So it's that that stuff is just simple. It's easy. There's no, you know, like like Mitch said, there's no separate tax return, there's no EIN for a trust, it's just your Social Security number. It's very simple, guys. We we we overcomplexify this situation, we we get it all convoluted in our heads, and it's just not. It's a very simple deal, and it's very easy to do. And, you know, when you go, you can title, you can retitle your vehicles in the trust, which is nice because a lot of times vehicles get caught up in trust and people don't want that. They just want it to go to whoever they want it to go to very easily, and you know, you can you can retitle just about anything that has a title or a deed or anything like that into the trust, and it just think of it like a funnel. You're just once you title that into the trust, it funnels into the trust and then gets distributed according to the trust document and bypasses probate, which is huge. Huge. So, you know, today what we see and and and it's just you know, very life is a lot more complex today. And what I mean by that is, you know, we see a lot of blended families. Definitely. And, you know, one of the things that you know we've been able to accomplish is to get real clarity on, you know, what what those blended families, how they want things to go. Because I can tell you that if you, you know, if you were on your third marriage and you've got kids from the first two marriages, and you know, you both are on multi have had multiple marriages with multiple kids, with multiple people, things get complicated really quick. And that makes for a real, you know, planning need to get clarity on, okay, well, if something were to happen to me, how does my estate get distributed? And you might have assets outside of your partner that are only in your name, you might have assets that are jointly held, and then your partner might have assets outside of the marriage that are only in their name, and that stuff gets complicated. And a lot of times I was just sitting with a couple recently that was in this type of situation, and you know, they had very, very distinct visions of what you know they wanted to happen with. their assets that were held in their name as opposed to the assets that were held jointly with their current marriage. And so, you know, the only way to really get clear and to really make that a smooth transition is to have something like a living revocable trust that can really where we can sit down and in a you know an hour and a half meeting, we you can talk me through like, hey, I want this child to get this, I want this child to get this. You know, we just had a situation where one child owned a percentage of the parents' home and and they wanted to make sure that that if something happened to them that that child got you know a distinct share of the home value prior to the rest of it being split up against the other w between the other siblings. I mean these are complicated situations that can be addressed and we do it every single day in our office. I mean we've got situations where one spouse you know owns the home and the other spouse just lives there and you know they're not on the time on the deed and you know that one spouse says to us hey if something happens to me I want my spouse to be able to live in the home as long as they're alive and then once they're gone um I want it split evenly between my natural children. And we can we can create that scenario inside of a trust and make sure that that's able to happen legally and that you don't have to just rely on your kids telling you yeah we're gonna we're gonna make that happen or let that happen because the truth is is life changes people's feelings change and the day that you're you know a week after you're gone they may have a change of heart and say no we want this old man out of here and we want we want to sell this house and get our money now you know so you can protect against those sort of things and listen guys if if these thoughts are going through your head if you're laying in bed at night and you're having you know these kind of thoughts about oh my gosh what would happen here what would happen there just you come to ClearpathRetirement.com give us a call eight six four seven seven five five zero three three you know let us know you want to sit down and just have a real real conversation about these issues and let it help us to you know alleviate that anxiety you're feeling by answering these questions guys we'll be right back retirement planning isn't just about growing money it's about using it wisely generating income managing taxes planning for health care costs protecting your legacy at Clearpath Retirement Planning we specialize in helping retirees and pre-retirees transition from accumulation to distribution with confidence and clarity. If you're approaching retirement and want to plan not just opinions discover the clear path difference.

SPEAKER_01 24:56

Visit ClearpathRetirement com today Welcome to Clearpath Retirement Radio from retirement income and tax planning to protecting the savings you've worked a lifetime to build this is real world financial talk designed for real people people who want clear answers not sales pitches so you can make informed decisions and plan for retirement with confidence.

SPEAKER_02 25:17

Now here are your hosts Stuart Smith and Mitch Davies and we're back here at Clearpath Retirement Radio I am Stuart Smith here as always with Mitch Davies and today we're talking about living revocable trust. But before we get back into that I want to just throw it over to Mitch for a few minutes here for our favorite segment of the show and that is Mitch's Market Minute.

SPEAKER_00 25:44

Thank you Stuart yeah I'm uh I'm excited as always like Stuart said we'll switch gears for just a minute here and just talk about what's been going on. There's this is a great time to talk about this because there's been a lot happening in the markets and we've seen a crazy couple weeks play out and this is something we've been talking about for two, three months now is almost expecting this exact scenario. We did a segment a few months ago or a few weeks ago sorry talking about the history of these types of events, right? And what happens almost every time what happens almost every single time we have some kind of geopolitical tension is that we see a sharp dip and a sharp recovery. And today the market is almost at all time highs again which and we've seen five days in a row of extreme green days and this is so important to have a team whether you you know whether you're retired, getting ready to retire, who understands this stuff and is able to talk you through this because we had so many clients we know we do a lot of client outreach. We do especially during times like this, this is the time where you're here from us the most is times like this where the markets are super volatile. We were talking to so many different people about hey look here's the history of what happens in these things. This isn't the first time we've seen this so what generally happens is we have we make up you know we have a four or five week stretch of red days where we're slowly coming down. You know we're about S P was about 10% down from the you know all time high and just in a span of five days we're back to that. The SP hit over $7,000 today. So what we see is that sharp recovery and it's so important to understand the way the markets react in these things. We have 120 years now of market history to study and to understand that there's been pol you know geopolitical tensions before there's been wars world wars before there's been pandemics before there's been everything that could happen we've seen before right so there's nothing new here. So what we're seeing today is what we've been expecting the SP almost at all time highs NASDAQ almost at all time highs oil is starting to drop oil you know we've talked about this has been the driver behind this we've seen the Strait of Horror moves which is just south of Iran they have control over it essentially and they've blocked that off and we've seen oil not be able to flow through there. And this strait controls 20% of the world's oil supply not the US doesn't use much of it but everybody else does so that affects the overall oil price right and we've seen the second we we're starting to see some de-escalation talks we're starting to see that the strait is partially open and they're gonna toll it we're starting to see these different reports but the second these start to come through the market just flies up because the market's ready. When we have volatility like this and we see one a huge green day just because of one report that means the market's ready to go. The market's ready to run it just needs a little bit of fuel right and oil coming down and the volatility index coming down and you know the market's pushing all-time highs is that fuel it's ready to run. So the most important thing you can do in retirement whether you're doing this yourself or you're working with somebody is make sure you have a team that understands the market history and psychology behind this because what we do differently for you know we're only working with retirees. What we do is we have our clients allocated ahead of time not to suffer huge drawdowns because it's hard. When you're in retirement and this is all the money you've got and you've got it invested and you're fully exposed to the market and you see that 10-15% red in your account, even if you understand, even if you have us saying, hey look it's gonna like it's gonna come back. That's what everyone says, right? But it's hard to see that. And it's hard to sit there through that and that's when you make bad decisions. That's when you sell. But what we do is allocate in a whole different way where we have a large portion protected or semi-protected where they're only down three or four percent instead of fifteen. And they're able to sleep and understand so much better that no matter you know what's going on in this time we've got we we understand the history I've got a team behind me that's able to work me through this and I'm not even down the full 15%. So the most important takeaway here guys is that any event that's happened has already happened in some form of the way as far as the market's concerned. Whether it's you know tension in the Middle East, we've seen that how many times over the last 50 years, right? We've been dealing with that for 40 years. So we've seen these types of things and we have history we have so much data to understand what happens and the market's right on the edge there. So if you're if you've been stressed the last six weeks, you know what what I'll challenge you, if you've been stressed the last six weeks and you don't have a direction, you don't have a guidance, you don't have anything like this, and you're in retirement especially, if you're just beginning investing and you're contributing, it's not maybe it's not as much a big deal. But if you're in retirement and this is the money that you've got to live on and you've been stressed these last six weeks dealing with the uncertainty and the scary news headlines and all this give us a call. Just come in and talk to us. Let us sit down, understand where where you're at, understand where you're trying to go, and see if there's a way we can help you. See if there's a way we can you know help you through that and coach you through this process because it's it's hard alone, especially in retirement and this is what we do every single day for people. So take a look at that for me.

SPEAKER_02 30:41

Great segment Mitch you know we really help folks smooth out that ride you know the when it gets extremely volatile like this we see people that they get really you know nervous they get they they they get panicky and they start wanting to you know and what we're able to do is is you know give them a call talk to them directly let them know you know what our thoughts are calm them down you know make sure that that you know we we are reallocating as we need to make sure we're reacting correctly to what the markets are doing and you know a lot of times that means stay in put and you know we understand that and a lot of times you know that can pay huge dividends by not making any drastic changes but you know if that if that like Mitch said if it's too volatile for you it's it's got you you know anxiety ridden and not sleeping at night give us a call let us smooth that ride out for you let us get you to a better place and we you know we would certainly appreciate the opportunity to to do that. Okay so great segment let's get back to talking about the topic of the day which is living revocable trust and what a powerful tool they can be in estate planning. And you know like we said earlier Mitch you know people hear the word trust and they get real they get weird about it don't they? They get like oh I just this sounds so complicated and I just don't know. But we're here to tell you guys it's really not complicated and if you've ever been through probate with a family member you probably you know it's a lot more complicated than doing a living revocable trust and you know a living revocable trust will help you to avoid probate on all of your assets help pass those on to the next generation with no must no fuss it's going to really really make you know your beneficiaries lives so much easier it's going to keep those you know that those transferences private it's going to keep all of that private which a lot of people really appreciate. You know years ago I had a a client pass away and leave a very very significant uh amount of of you know assets in to uh one of his children um he only had one child and you know that child shared with me a few years later um because he did it through a will and that was public knowledge he shared with me years later that he was just hounded by phone calls of people you know pitching him different investment ideas and complete strangers you know coming after him understanding that he just inherited a s a significant sum of money. So you don't want to do that. You don't want to leave your your assets in a manner that is public knowledge where that kind of thing can happen. So let's talk about you know just some practical estate planning tips that I think make a lot of sense for people. One is get that living revocable trust done like we said in the earlier segments we'll do the entire process with you attorney driven process. We will also include you know healthcare and financial power of attorney in that which are both extremely important documents to have in place in case God forbid you become incapacitated. You know my personal story I can share that you know my father who you know suffered a a major fall when he was in his late 30s and um had health issues the rest of his life because of that you know at at age 70 you know I remember sitting with him and and pressing him like Dad you're you're not remembering things you're not making great decisions anymore. I really want you to sign these power of attorney documents so I can make sure that if you know if and when the time comes that you are taken care of and he said you know son I will sign these documents because I believe in you and I trust you but I I don't you're never going to need these documents and it was not six months after he signed those documents he suffered a stroke and was in a memory care unit for the rest of his life which was six years and you know thank God that I got those documents signed and that I was able to sell his home and all of his assets and you know make sure that he received the best possible care he could get for those last six years. And you know had I not done that hadn't a little voice not spoken to me and told me to do that then I just can't imagine the the nightmare that I would have been caught up in trying to get all of that done for him. So this is you know something that needs to happen and you know just quit being you know quit procrastinating on this get real with it and you know get with get with us get with a a a another professional someone who can handle this for you and and get that living revocable trust done and then get take the proper steps to get it funded correctly meaning get things retitled as needed to go into the trust and be part of that trust and if you are confused about how to do that and you're just not sure you think it makes sense and you think that avoiding probate makes sense and avoiding all the cost and the the you know pain that comes along with probate makes a lot of sense but you're not really sure where to start just give us a call 864 775033. We'd love to have that conversation with you and we can sit down and really really get our arms around you know what it is you're trying to achieve and we can make sure that all of that is taken care of and that you know you you can sleep better at night knowing that these things are going to happen and they're not gonna you know it's not gonna be a nightmare for your beneficiaries there.

SPEAKER_00 37:21

And guys the the healthcare piece is such an easy place to start. The healthcare directives do not take long. And there's you know a big misconception there Stuart is I was you know sit with a client the other day doing a healthcare power attorney and he said well I don't I'm good right now. I I still want I don't want to relinquish my ability to make decisions now and it doesn't it doesn't take effect until you need it to, right? You can you're not signing away your power to make a decision today. So there's almost no reason not to have that in place. We we can take care of that for you in 30 minutes, you know? And in Stewart's example there it was a life changing decision to go ahead and sign that document. And it doesn't it's not some again it's this stuff is changeable. You could change that later down the road as long as you're still you know mentally capable. So there's no reason not to have that. Let us take care of that for you. It's so easy it's so fast to do now and it can truly be a life changing decision to go ahead and set that up because in the blink of an eye that can change.

SPEAKER_02 38:12

It can guys if you're thinking all this makes sense again if you're thinking this is you know something that that could be the right tool for you give us a call 864 775033 or go to our website clearpathretirement.com let us know you want to chat let us know you want to have a conversation about this stuff and let's get you headed in the right direction today. We'll be right back. Are you a business owner with an email list you are not sure is actually growing your business most business owners are just guessing sending emails hoping for a click. At Kathy Farah Consulting we take guesswork out of your email marketing. We help you identify what's working and fix what's broken, turning your list into a reliable engine for better leads and consistent sales stop wondering start growing visit KathyFara.com to book your free email clarity call today let's make your email marketing work smarter.

SPEAKER_01 39:09

Thanks for tuning in to Clearpath Retirement Radio with Stuart Smith and Mitch Davies let's get back to the show.

SPEAKER_02 39:16

Hey we're back with Clearpath Retirement Radio and today Mitch and I are talking about living revocable trust and whether they make sense for your situation and your estate planning and you know I would say that Mitch I I think it's just a no-brainer it's a no-brainer Stuart and you know there's again we've been talking about misconceptions and there's a lot of them especially surrounding real estate one of the main ones that I hear you know we talked about just to recap we talked about the beginning how the revocable living trust is it's still in your Social Security number it's still in your tax ID.

SPEAKER_00 39:52

You're not removing this asset from your estate. So one of the main misconceptions I hear is hey if I put this my house my primary residence whatever it is in a revocable living trust I'm gonna lose the step up and cost basis. We hear this all the time and this is not the case. You know people will say well my grandma, my mom had a house and she put it in a trust and we didn't get the step up. So the revocable a lot of people used to do these irrevocable trusts. This is when you remove it from your estate because the estate exemption used to be lower. But now with the estate exemption at you know $15 million essentially per person or $30 million for a married couple, we're mostly just doing these revocable living trusts and when you put your house in the revocable living trust you don't lose the ability to step up the cost basis. So what that means is if you oh if you bought your house for $50,000 and you know pass away and it's worth $800, your they're gonna get a s the beneficiary is going to get a step up in cost basis. So you don't have to they don't own it at that $50,000 so they can turn around and sell it right away and not owe taxes. But this is remains true in a revocable living trust. You still own it your your it's your tax ID, it's your Social Security. You still own the house it becomes irrevocable once you pass. So you still are able to enjoy the benefit of a step up and cost basis which is extremely important in retirement planning is to be able to have that because real estate is appreciated so much. So one of the big misconceptions we hear is that oh if I put the house in the trust I'm losing the step up and cost basis. You're not this is a revocable living trust you don't lose the ability to enjoy that huge tax benefit that we get and you still have you'll still maintain full flexibility but again it's going to put it in that funnel. So instead of dealing with different probate courts and different beneficiary documents, let's funnel everything into one bucket. Let's retitle assets in the trust let's make the trust the beneficiary of investment accounts it'll take 10, 15 minutes. Let's even, you know, with after-tax accounts like investment accounts, brokerage accounts if you have large brokerage accounts that you've just set up with after tax money that you're holding stocks in, we can retitle those in the trust. That's even easier. You don't even need a trust you don't even need a title company you can just do that with Fidelity or Schwab or whatever the custodian is. Let's do all that let's take 20 minutes per account and set that up and save the next generation from hours and hours and hours of probate court trips and driving down there and phone calls with attorneys and staying on top of them and trying to wait for a follow up. I mean as you can imagine Stuart the probate court is the most efficient process we have in the world so let's spend the time now to set that up to avoid the headache down the road.

SPEAKER_02 42:29

Yeah and you know we get that asked that a lot like what do I want to put in the trust what don't I want to put in the trust I would say one rule of thumb is you don't want to put pre-tax accounts in the trust like IRAs and 401ks and that sort of thing because those accounts are going to require you know require minimum distributions at some point and you want to keep those in your name so that the the RMDs, the required minimum distributions can be done correctly without confusion and but one thing that we do do is we will make the trust the beneficiary of those type accounts so that when you do pass the money goes into the trust and is distributed through the trust. For like Mitch said for brokerage accounts those can be titled actually directly into the trust sails as as well as bank accounts and things of that nature so that they are just automatically passed through you know through the trust according to your wishes. You know a lot of people will say well what if I've added you know uh gone ahead and added one of my children to the bank account I mean that can work too but I think it's better and cleaner to do it through the trust for sure because we have seen hiccups with that sort of process of just adding them to the account. You are giving them access to that account prior to your death and that can cause some problems and it can cause problems after death where You know, there i you know, we've got an issue going on right now where someone was on their bank account and uh a relative, but they're having all kinds of issues accessing those funds right now and having to jump through a bunch of hoops to, you know, to to get to those funds. So um not necessarily the the best thing. And then, you know, another question we get all the time, Mitch, is what if I have a mortgage? What if I have a mortgage on my primary residence? Can I put it in a trust? Yes, yes you can. We've never had an issue as long as it was your primary residence and it's a living revocable trust, putting that into the trust while you still have a mortgage on it. That is not a problem. Where it can be a little more difficult is if you are putting, you know, rental properties, um, you're putting land and things of that nature outside of your primary residence in the trust with a mortgage on it. And in that case, we just always recommend that you contact the mortgage company, excuse me, and that you um have a conversation with them to make sure that they're, you know, they're not going to try to call the loan or something if they see some change in ownership from you to your trust, which I mean they we've never had that issue either, but it's just double check and make sure we don't want any weird, you know, stuff to come up. So you just want to kind of double check with them and make sure, like, hey, you guys okay with this? And usually um it's never been a problem for them. They don't mind, um, they understand it's a living revocable trust, you still control it, you're still responsible for all the payments, and that it just isn't a problem. So if those things are holding you back, don't let those things hold you back either. Those things can easily be addressed, and um, you know, we can help you certainly if you have questions on that. So, you know, here's what I would say, you know, do the the the healthcare power of attorney, do the financial power of attorney, um, just God forbid, in case you become incapacitated. And when I say that, I don't mean unconscious. I mean you can and will get to a point in your life where you just can't make the best decisions anymore. And trust me on this, you'd rather name the people ahead of time that you want making those type of decisions and you completely control that process than have the state figure it out after the fact. And so it's extremely important that you get those things in place. And like Mitch said, literally takes us 15-20 minutes to get those done, as long as you know who you want handling that, we can knock that out really quickly for you. The other things I would say is if you're relying on beneficiary designations on your insurance products or on your, you know, investment accounts and those sort of things, if you are relying on beneficiary designations to bypass probate, make sure those are up to date. We have seen, I can't tell you, I had a client that was an extremely successful CEO of a major engineering firm, had a you know, just gotten remarried, had a $1.2 million life insurance policy on, you know, him himself that that um, you know, he had forgotten to change the beneficiary from his ex-wife to his new wife, and unfortunately was involved in a car accident on the way home from work one evening and did not make it, and the ex-wife got $1.2 million tax-free, and you know, just because he had forgotten to change his beneficiary, and the new wife actually sued for over three years trying to, you know, legitimately get a portion of that money and was not successful. And so, you know, that's those things are critical. If you haven't visited that in quite a while, then I I suggest you do what we call a beneficiary review. And you're welcome to give us a call and come in. We will we'd be happy to sit with you and go through those things and make sure that everything gets updated to your liking. Your estate plan, you know, you've got to review your estate plan every three to five years, even if you just have a will. And a lot of people ask me why. I mean, I did my will 17 years ago, is it not still good? Well, it could be, but you know, if you're in a situation where you feel like there is any reason for someone to challenge that will, and even if that means you have two or three children and they don't necessarily get along, and they may not agree to the exactly the way that you have your assets being distributed in that will, and one of them doesn't think it's fair, they can certainly go hire an attorney and challenge the will. And I'm here to tell you if that will is 17 years old and has not been revisited in that time frame, guess what's gonna probably happen? Yeah. That probate judge is probably gonna throw that thing out real quick and they're gonna decide how to distribute your assets from there. So what we recommend is every three to five years, even if you just have a will, sit down, review the will, make sure it still, you know, it speaks to your wishes, and then re-sign, renotarize, rewitness, whatever it is you need to do, and make sure that that that's done every three to five years, because that way, you know, if someone challenges it and it's been done in the last you know, three to five years, then it's probably gonna hold up. So that's a big deal, you know, and then again, you know, when it comes to estate planning, you know, think beyond just assets. You know, your land, your house, your cars, your bank accounts, all of those things are ripe for, you know, probate. And if you don't have those things set up correctly, if you don't have, if you haven't taken the extra step to go name a transfer on death or paid on death on those bank accounts, and you just you don't want to do the trust and retitle them in the trust, take that extra time, take that extra step. It's gonna save someone a lot of hassle, and it's really not that difficult to do. And I have noticed that banks, when they set up, you know, bank accounts, a lot of times they're not gonna prompt you for that. That's something you have to go and ask for. So make sure you're doing that. So I hope everybody's benefited today. This has been a great show. If these are all concerns of yours, if it's got you thinking, if it's got you concerned, and you're not sure if this stuff's right for you, again, visit us at ClearpathRetirement.com and let's have a conversation and just see if this is right for you, see if a will works or a trust is better. And until we until next week, happy retirement, everyone. Are you anxious to see what retirement might look like for you? Do you feel like you have the pieces of the puzzle, but you're not sure how they fit together or where to start? At Clear Path Retirement, we help you bring clarity to retirement by organizing your income, taxes, healthcare decisions, and legacy planning into one cohesive plan. Retirement doesn't have to feel uncertain, it just needs a clear path. Schedule your complimentary consultation at Clearpathretirement.com.

SPEAKER_01 52:09

You've been listening to Clear Path Retirement Radio with Stuart Smith and Mitch Davies, helping you make informed decisions so you can plan for retirement with confidence. To learn more, visit ClearpathRetirement.com. That's Clearpathretirement.com. Investment advisory services offered through Alpastar Capital Management LLC, a SEC registered investment advisor. SEC registration does not constitute an endorsement of the firm by the SEC, nor does it indicate that the advisor has attained a particular level of skill or ability. Fixed insurance products are offered through Clearpath Retirement Planning LLC, and Alpha Star Capital Management is not involved in the offer, recommendation, sale, or management of commission based fixed insurance products. Alpastar Capital Management and Clearpath Retirement Planning LLC are separate and independent entities. This is for informational purposes only and is not intended as legal tax or investment advice or a recommendation of any particular security, investment product, or investment strategy.