In the following presentations, Phil Fish, CFP® and Estate Planning Specialist with Sandy Spring Trust shares his 30 plus years of experience.

  • In the seminars, Phil talks about key issues in relation to estate and financial planning.
  • In the Professional Discussion Series, Phil interviews local professionals in the areas of estate planning, tax, finance and health care.

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The Four Ways to Give What you Have to Those you Love with Gail Kahan, Esq.

 
Philip Fish, CFP<sup>®</sup> and Estate Planning Specialist with Sandy Spring Trust

A Real Life Matters Discussion Series.

In this Professional Discussion Phil Fish, CFP® and Estate Planning Specialist with Sandy Spring Trust interviews local Estate Planning Attorney Gail Kahan. They discuss the four ways assets can transfer upon the death of a loved one and outline the benefits and challenges associated with each method: Joint ownership, beneficiary designations, Revocable Living Trusts and Wills. Each transfer method is discussed in detail as these two professionals outline a number of important issues to consider within your estate and financial plans. 

Guest Speaker: Gail Kahan has practiced law since 2001 and is a member of the Maryland and California bars. Gail has her Bachelor of Arts degree from Wesleyan University and her law degree from UCLA. In 2005 she launched her own practice concentrating in estate planning and estate settlement.


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Transcript

  • Question

    The Four Ways to Give What You Have to Those You Love

    Answer

    - Hello everyone, and welcome to Sandy Spring Bank Real Life Matters discussion series, my name is Phil Fish. I'm a Certified Financial Planner and an Estate Planning Specialist with Sandy Spring Trust. And I'll be the host as we interview local professionals in the areas of law, tax, finance in health care. Before I introduce our guests today Gail Kahan attorney at law, there's a brief disclaimer that I need to read to everyone so please bear with me. Sandy Springs Trust does not endorse or recommend the services of any person or entity not affiliated with Sandy Spring Bank, the opinions and statements expressed by Gail Kahan and Kahan Law reflect their own views and do not necessarily represent the views of Sandy Spring Trust. This material is provided solely for educational purposes by Sandy Spring Trust and is not intended to constitute tax, legal, accounting or healthcare advice or recommendation for any investment strategy or transaction. You should always consult your own tax, legal, accounting, financial or healthcare advisors regarding your specific situation and needs. Sandy Spring Trust and the Sandy Spring Bank logo are registered trademarks of Sandy Spring Bank and all rights are reserved. Gail, thank you so much for joining us today. And before we get into the topic which is the four ways to give the assets that you have to those that you love. Could we start with you just providing a little background to the audience today on who you are and the role that you serve and how you ended up in your current position as a local attorney helping clients with their estate planning needs.

    - Sure, thank you so much for having me Phil I really appreciate it as you know, I'm an attorney and I, my firm is called Kahan Law. I am based in Olney and I'm the Principal Attorney in my firm. And I've been doing this sort of work for approximately 15 years. And in Montgomery County, the reason I started doing this practice is I had formally been a prosecutor and it was a practice is filled with a lot of conflict and a lot of court time. And I just really wanted to do something where I felt good every day about what I did. And it really provided a very valuable service to the people who are watching for me in a way that I felt was necessary and helpful. And the primary people I work with primarily two basic brackets of people. I the joy of working with young families who've had their first babies and helping them get started and that's so much fun and we always love a good baby or grand babies babies are great. And then the bulk of what I do is working with my older clients and making sure that when they die, that what they want is gonna be what happens that their money is gonna go to those that they want it to go to in the way that they want it to go. And for such a sad practice, because there's so much death and dying, it's actually a very happy one to be able to give people peace of mind while they're alive. And then to know that after they've gone, we're carrying out their wishes and they don't know that, but I know that and that's really a great privilege to do for somebody

    - It's been 15 years, cause you and I met fairly early in your career I think a local accountant who knew me suggested you and I have a compensation and I was then probably five years into my career at Sandy Spring Trust cause I've been there 20 years, so it's been 15 years that you've been in practice here.

    - Yep, it has, I feel like we've really grown together.

    - Wonderful.

    - Yeah.

    - So the topic today is there are four primary ways cause you and I do very similar work and my role as an Estate Planning Specialist kind of working for our Trust Division, I work a lot with attorneys like you helping clients kind of navigate the confusion of wills and trusts and powers of attorney and joint ownership, so we're gonna talk a lot today about that confusion and hopefully try and help clarify it obviously are drafting the documents, you'll sit down with clients and helping them through this process. So I think we're gonna talk today, there are four primary ways that assets can move when someone passes away so what are those four ways that you spend time with your client talking about?

    - And before we actually talk about that I just wanna say that working with you has spoiled me for other financial people cause you were acutely aware of the fact that you better make sure that every beneficiary is correct and that you have an overall arc of what you're doing. And there are a lot of really wonderful professionals but they don't necessarily look at the whole global picture. And then we have that terrible situation where after somebody passes away, is that the gift that they wanted to go somewhere actually went somewhere else. And I know that when people work with you that that doesn't happen, that you look at everything not just the assets that Sandy Spring Bank can assist a client with. And so I think that

    - Yeah I think that you spoiled me for others.

    - Well, thank you for that, I think the difference is we are a trust company. So in addition to managing assets, we serve as a trustee, we serve as opposed more representative. So we really get into the nuts and bolts of what happens when somebody gets sick, what happens when somebody dies and we see firsthand when it works well how clean and efficient it can be. And you and I both see when it doesn't work well it can be a complete disaster and really hurt the client. But the family financially cause tax issues, cause fights amongst family, so what we hope from these discussions series is if we get one person to take a second look at the will or the trust or the beneficiary designation or reach out to an attorney to update documents or create a document cause so many clients you and I meet don't have documents or the documents is so old, they just really don't serve the role that they would design to when they were written 20 years ago. So yeah, you and I have always been aligned in our kind of passion to help clients get it right so that their wish is honored and so a common thing in our discussion today is going to be the coordination of the client's financial and estate plan and how these two things have to work in harmony with one another instead of in conflict, which happens frequently.

    - Exactly.

    - So we've got four areas to talk about today so it'll be a fun conversation. So what are the four ways money can move from the client when they pass away to a family, loved ones, charities, et cetera.

    - So this is a conversation I have with every client and I have it multiple times every day. And it's a revelation almost every time for every client who I speak to. So there's four ways to give what you have to those you love, the first way is through joint ownership anything you own jointly automatically goes to that joint owner, whether you mentioned to go to them or not, which can sometimes be a surprise, through naming a beneficiary on something. So even if a person has gotten divorced that divorced spouse will inherit the asset if they are the named beneficiary, the third way is through your trust. Some people have revocable trust others doubt it's not necessary, it's definitely a case by case choice. And on the fourth way is through your will. And I think with the will is a catch all, for example if you were at a wedding with a chocolate fountain you would have everything trickling over and then you'd have that wonderful big silver platter at the very bottom attaching all the drips and drags and that's your wealth. And so the will is sort of the backstop to make sure that what you want actually happens.

    - And I think a lot of times, you and I find a lot of confusion people think the will is not just kind of the backstop but it is the controlling instrument. And that's where the other avenues cause a lot of confusion is you and I will meet with clients where they have a will and they believe that will controls all of their assets, so there's a shock when they realize that that joint account with the son or that beneficiary designation is actually going to override the wishes that are laid out in the will. So when you sit down with a client, this can be very confusing to clients cause the terminology, even you and I and other professionals struggle with wills and revocable living trusts and durable financial powers of attorney and Q-tips the head spins. So how do you kind of work with a client to help them figure things out, to make sure ultimately the end goal is what they want to occur, gets done using, it might be a combination of the things that we've talked about, it's not necessarily all in one part it's coordinating the different ways, different things move so what's kind of the first thing if I came to you as a client, what's your first step when you sit down with clients and talk to them about these issues.

    - That's exactly right, is that we firstly have to pull in a global view of what they have and how it's presently titled. So when I work with a client I basically pull it out of them cause it's usually right there at the forefront of their brain, but it's tiring to think about. So we wanna know where are all your bank accounts, they'll say, oh, I always bank at Sandy Spring Bank, great. By the way do you have a credit in your account through your company, oh yeah, I have that credit union account and then, oh, I opened up an account with my mom back when I lived in Wisconsin, do you still have that bank account? Yeah, actually I do. So we find all their bank accounts and then we find out how is it titled? Is your mom on it, is your brother on it, is your kid on it, is your spouse on it. And of course, a lot of people will be married for very long time and have great marriages and forget to put their spouses on their accounts. And then we look at investments, where do you have your investments, if you have investments and well I've got a bunch of stocks. Well, let's start writing down the names of all the stocks. And then do you have your stocks somewhere, do you have your investments at Sandy Springs Trust department, perfect. And then we wanna look at all the retirement accounts and that's always a puzzler to, oh, I worked here I worked there and I don't know where those retirement accounts are so I like we're gonna go find out. And then once we get those retirement accounts of course we have to make sure that the beneficiaries are up to date and that's always going for some wicked surprises. And then the life insurance policies, we look through those and then that pretty much covers up covers a person's financial life. So we always start, as I know that you do too with what do you have and then once you figure out what you have we figure out what are you gonna do with it.

    - Cause you mentioned with so we'll start with joint accounts there are, you've got joint with rights of survivorship, which is a very common joint ownership you get joint tenants by the entirety which is a special type thing just for husband and wife, for spouses. And again, in those scenarios, whether it's two three or four people on the account, if one person dies the surviving joint owners are gonna receive those funds doesn't matter what the will says, doesn't matter if there's a trust if there's a joint ownership that's and we see a lot of families kind of add add a child that sometimes just a friend or even a neighbor just saying, well I want my neighbor to have access to this account to help pay the bills. And they don't even realize that they've created that joint link and upon death whoever's named in that joint account will receive the funds. All they can just walk in and pull the money out legally.

    - You you've encountered that too, haven't you, where sometimes people don't realize when they've put a friend or a neighbor or a relative on an account that they've actually given away their ownership rights over that account. And someone else can come in and take all the money. They can't, the other person can't close the account. But if you scoop out all the money, who cares

    - We also talk to clients about with children you are exposed those accounts to risk that if your son or daughter gets into financial trouble, gets divorced, gets in the car accident, get sued, gets bankrupt, then that joint ownership opens the door for people going after that individual to kind of reach through and reach into those joint assets, even if they're your assets you just added the son or daughter on as a convenience you kind of open the door to risks and we always tell clients you wanna be very careful about that. So with joint ownership, husband and wife makes a lot of sense in a lot of cases but other than husband and wife, I don't know about you, I kind of lean clients a little away from doing joint ownership with someone other than a spouse cause it tends

    - I do too To cause a lot of disruption in the overall estate planning.

    - I agree completely with one exception is we might set up a small account to make sure that the funeral expenses are gonna be easily tended to with the person who's already going to be the personal representative, which most people would think of as the executor, we might have them set up an account with 20 or $25,000 in it, easy access money and then you can pay the funeral home without any kind of concern.

    - That makes sense and then they obviously you trust them cause you've named them in your documents to take care of your affairs and I guess they can just put the money back into the the estate account, once everything if they don't use all the funds it's easy for them to redirect those funds.

    - Exactly and that's on a case by case basis. If some people are very concerned about that and so that's a really nice way to solve that concern and help them feel more comfortable with what they've done, but it's not my you must do things that way sort of solution. And the thing was by its presence people don't realize that if you put your name someone else's name on that account you just lose control over that account it's always shocking to them.

    - And so the only other joint account situation that I run into is joint tenants in common which is used sometimes for real estate. So if I wanted to buy a piece of real estate with a friend or say a brother or sister, we might set that up, but that gets tricky because then my portion is controlled by my will and that portion is controlled by the will. And that can really get I know I lost a brother recently and it was very messy cause he owned property with my sister and so he unfortunately did not have a will even though he was an attorney, very sad. And so it just created a big mess because now his children own popular real estate, my sister on the other half they had to figure it out and they did but it was certainly a lot more stressful and complicated and it could have been with a more thoughtful plan in place, so that's the joint tenants in common is used sometimes for real estate but that is then you really have to think long and hard about, okay, what do you want done, how do you wanna handle this, who do you wanna own the real estate, so it needs to be thought through a little further not just, okay, my will controls my half, they will control, cause then you might end up with your three kids owning half the beach house and their four kids, I mean, half the beach house. And as you know, that always is gonna end in tears and things being thrown at one another.

    - We see that a lot here too, because living in the Maryland Virginia, Washington DC area there are a lot of people who have been here for multiple, multiple generations. And so we'll see, firms just be owned by 1622 together, it's just the way it goes and it is, it's a puzzler.

    - And upon each death it gets more and more complicated and harder to resolve so.

    - Exactly, some soul with lots of fortitude comes in and says I'm gonna clean it up.

    - Alright, so joint ownership we're gonna stay husband and wife fine, but for any other joint owner, you wanna be careful you wanna maybe talk to your estate planning attorney about how it might affect your estate plan and just be cautious I think is a good general statement when it comes to joint ownership with anyone other than a spouse. So next up on.

    - Before you go on, I agree with you completely and then the takeaway and the key takeaway from that is your will doesn't control jointly on property.

    - Correct and so it's gonna override your wishes laid out in your kind of primary estate planning document the will or the trust. So that leads us on to beneficiary designations, you were talking about retirement accounts which cannot be put into a trust, it has to be kept separate for tax reasons, so it's gonna have a beneficiary designation there things like annuities, life insurance. We also see beneficiary designations used in bank accounts and investment accounts, bank accounts it's called a payable on death, POD and investment accounts is called a transfer on death, TOD We see that used a lot, unfortunately kind of just pop in beneficiaries all over the place, we got one here and one here and one here. So again, how does that affect the estate plan, these beneficiaries.

    - It's exactly the same as theirs, there's the people who do it very mindfully. And so for example, a family that has, two or three or four kids for every asset they have they will put the same beneficiaries on and the same proportions and that can work out really really well because then a couple of things one is everybody always gets the same. And if that's what you intend to do you've made that happen. And then the other thing is that if money has to be spent for care or for other expenses, you never have to worry which pot are you pulling that money from, cause you're not gonna unequalize the distribution to all of the, usually the children. I'm sure you've run into this too I've seen a few parents will say, well, this account is for this child and this account is for this child.

    - Yes.

    - But then if something happens to the parent the person who's in charge has such a hard time making sure that the money is pulled fairly for everybody so that mom and dad are taken care of and yet we haven't suddenly disinherited one of the kids cause they're the account that they were gonna get has been spent on nurses and people coming into the home to take care of them. One of the key things too that is kind of a revelation to a lot of financial planners and again, I can't say enough good things about it not a revelation for you or your bank is that when we're trying to figure out if Maryland state taxes are going to be owed, Maryland and the federal government they don't care who is the ultimate recipient of that money, all they care about is how much the person had at death so if you have everything set up with joint ownership and with beneficiaries, sure, you've avoided court supervision and you've made it very quick to distribute the money. But if you've heard, hit certain amounts of money that you own in your own name which is in Maryland approximately $5 million and right now is over 11 million for the federal government. But that number is likely gonna go down. The state taxes owed and the IRS and the controller of Maryland they don't really care who has the money. They want they want to be paid. So we put, I've had situations where for through lack of care, the account the only account that's available to be used to pay estate taxes was supposed to go to somebody and through the will and now there's no money to give to the estate taxes, everything else was sought by beneficiaries an no one's gonna give up their money.

    - Well it can put the person named in the will or the trust in a very difficult situation where they may have to try and chase down people and try and pull money back which again, puts them in a really awkward position. The I was thinking about a scenario, if you and I will say brother and sister, and we didn't get along that well, and mum and dad had set up you as beneficiary on some accounts, me is beneficial and others, if I were the financial decision-maker I could in theory, stop pulling money out of your accounts the ones that were designated to you and just use that to pay the bills and you could maybe go to court but it could really lead to a really ugly situation and it'd be very messy.

    - There you can go to court, but in reality there's really nothing you can do about it.

    - It's just a bad plan. So, we, what we generally state is that if you want somebody to have access while you're alive but under the weather use things like trusts and financial powers of attorney it gives legal authority to act but it doesn't give ownership rights to that person acting and that way they can access whatever accounts make sense because that might be, we might not wanna pull money out of an IRA cause it might trigger an income tax, we might not wanna sell a stock cause it might trigger a capital gains tax. There is a planning involved when somebody gets sick to decide where to access funds and what makes the most sense and if there are a beneficiary designation stuck everywhere puts that decision making, as you said in a really awkward situation where they it makes sense to pull from Julie's account but Julie's gonna be like, whoa why are you pulling money out of that bank account, well, cause it makes the most sense and Like, pull it out of Steve's account, no one likes Steve he's the brother, no one likes and as you, and I see when parents get sick or someone passes away, it can bring families together and it can also tear families apart unfortunately so we're trying to avoid those positions of conflict if we can. So beneficiary designation is very important another thing we have to be careful about is on things like retirement accounts and insurance you have a primary beneficiary and you have contingent beneficiaries. I ran across a case recently where a client had named a spouse to get like 80% of a large retirement account and 20% was allocated to a charity and they were both just listed as primary beneficiaries. Children are listed as contingent, the problem is the way the beneficiary form was set up, if the spouse die, that left the charity as the primary and all of a sudden they become a 100% beneficiary because it wasn't clear. And I announced that, and again, there was a financial advisor who had set it up and they were moving the funds over to us. And I just raised the issue and they had their eyes went wide they're like, that's not our intent. It's like, then I explained it, but you have two primary beneficiaries, one goes away, you're left with one who now becomes the primary beneficiary 100%, the charities never gonna die so that the kids are gonna be disinherited, easily fixed we just had to work with the lawyer and get the beneficiary designation set up properly. And you're right, it's like a mini will whatever that beneficiary form says is what's gonna happen. And financial firms and insurance and retirement firms are not gonna second guess the form I say the form says your ex husband or ex wife is getting this money, you've had 13, 15, 20 years to change it, the client didn't change it, so how do we know it wasn't the client's intent to give their large life insurance policy to the former spouse. So as you said, beneficiary designations are locked in stone when the person dies, so we have to make sure that they are aligned with the client's wishes is very important.

    - Yeah, beneficials are great though, because if you haven't set up properly and mindfully that money flows out so quickly, it can be within if you're really lucky, it can be within two to three weeks and, but more, typically three months the money will all come out and it's great cause it's efficient and it doesn't cost, you don't have to hire an attorney to do it, you don't have to get court to do it and you just get that money. But if you don't do it mindfully, all the things that you were just mentioning actually happened, you've witnessed them all and so have I and it can be disheartening and kind of, it's just really unfortunate.

    - That is we see plans work well and we see plans fail and when we see plans fail I think it fuels our energy and passion to try and prevent that happening to other family members. And again, a lot of times the error is not intentional, it's just somebody wasn't, there isn't a lot of public service announcements on this, there's no education. And it's one of the reasons we are hosting at Sandy Spring Bank, these discussion series and for the audience you noticed when you clicked on you didn't have to provide a name or an account number or email or phone, it is a community program cause if we can educate the community on these important issues and prevent one person from making a mistake then we've had a good day at the office so.

    - Absolutely, I mean, I have a good friend who was supposed to inherit her dad's IRA accounts about $400,000 to pay for her two kids college and after he got married he never updated his beneficiaries and under the money arose as a result of his employment. And it was for whatever reason covered under a leaser, so when he passed away, his second wife got the $400,000.

    - Oh, no.

    - Yeah and then she said to my friend, oh, well.

    - Oh, well, you generally cause that man you're generally not gonna turn down that kind of inheritance and the law again, is gonna state this is what the law says so we've covered joint ownership, we've covered beneficiary designations, why don't we knock out the wonderful world of the revocable living trust, which is a big, a big thick document, it can be for the right client, a really wonderful way to manage affairs during life and upon illness, upon death for many of the clients you and I cross paths with unfortunately, we see the biggest issue is that the trust document is in place, but the client's assets are not titled in the right way to allow the document to do what it was designed to do.

    - So let's stop there and just talk about that notion. so a revocable trust is another way to give what you have to those you love and like you just said the big advantage of it as it has two components one is it controls what you own while you were alive, so if you're, if you get addled and able to handle your affairs the person you've selected while you had capacity can slide in and the investment company and the bank and whoever else knows that that's who you chose and it's a beautiful, seamless transfer. And then of course, the other advantages we usually how revocable trust to get advertised is a great way to keep your documents that keep everything private and out of probate. So that's all well and good but a revocable trust only handles those things that the asset is titled on, so for example, if I have a bank account of Sandy Spring Bank, it's going to be titled in my name Gail Kahan checking account, Gail Kahan savings account, if I have a revocable trust which means it's a trust that I can change while I'm alive so Gail Kahan revocable trust. So I have the trust and I have my savings account. If my savings, if I don't take physically take my paper copy of my trust to Sandy Spring Bank then the revocable trust will never control my bank account. So what we see in which is something you see all the time too is people will have these beautifully written trusts, they're thick, they're in leather bound binders, they have gold lettering on them, but they do nothing. They're just really pretty pieces of paper. So what you have to do when you have a trust is take that trust book, heavy as it is, or small as it is depending on the type of trust that you have to your bank and say, hi bank, I have a trust Sandy Spring is super competent at this and I know this because I've done it many times and they will transfer at any account that you ask them to transfer so that the trust controls it. Another thing you have to do is if you want your trust to control the property that you want for example, your home or your beach house, or your beach house in Delaware you have to go to an attorney, this is not a do it yourself project and have the deed in the land records changed so that the home is no longer owned by Gail Kahan but in the land records, it says that the home is owned by the Gail Kahan revocable trust. So that's my pitch change

    - Yes, it's we kind of, when I talk to clients, we talk about if set up properly, probate in Maryland is not terrible now a lot depends on how many accounts at the beginning of today's conversation we talked about, if you have assets strewn everywhere individual stocks, book, entry, little accounts here it's gonna be a huge amount of work. But if things are clean and efficient Maryland's done a great job of making the process of probate assets flowing through will pretty workable pretty user friendly. Other States are more complicated and so that's why we stress work with an attorney in the state that you live in, who's familiar with the laws that you're about bound by in that state. And certain States, the law is gonna say you really need a trust cause it's really complicated and in Maryland, they might say, we could go either way at Sandy Spring Bank, if we're gonna be positioned to step in during an illness, we use trusts because we're corporate trust company and trusted designed for an entity like the bank to step in during illness and pay bills, so that's kind of how we handle.

    - It was a completely appropriate time and a place for trust

    - But you're right, so many times we meet with a client they went see the lawyer and they have the big thick document. And then we stopped like you do gathering the assets and everything's in joint name, individual name beneficiary, designations, all over the place. And you just have this big document going just sitting, waiting. And actually what happens is when the client dies we have to still go through probate and kind of then get the assets over to the trust to get them out of the trust. And we're creating more work and a lot of the cases so for trusts, they can be a short line, through the process, if set up properly it can be a very efficient way to handle assets during an illness and upon death. But more times than not, we see that clients just, maybe not initially, but over time, just go, ah just put it in my name, I'll just put it in joint name. Cause they and you and I were talking before we started the call today that some banks are getting a lot more difficult when it comes to trust and requiring people go through a lot more steps which again is gonna discourage them they'll just, I'll just put it in my name cause I don't wanna have to through all of these steps that you're requiring of me. That's making it very hard for me to open up this trust account. So stick it in my name, which is sad because then they're pushing the client into a position where their estate plan is not gonna work nearly as well than it could have and you're right, I'm really happy I've been at Sandy Spring Bank for 20 years and we do we try to help clients through this as best as we can. And we know some banks are not as helpful unfortunately.

    - So let's talk about the good points of a trust, one of the really good points of the trust is that if you are an individual who's unmarried whether you're widowed, divorced, or never married having a trust can be a really great way to handle your financial affairs, now, your IRA, your 401k, your TSP they can never be put in the trust. So pretty much everything else you can be. And then it's really easy for you to like have your niece, your nephew, or your child or your closest childhood friend who you grew up with be your co-trustee. And that way you'll know if you get a bad diagnosis they're there basically to hold you up and support you all the way through to the end. And it's a great way if you wanna choose a professional trustee like Sandy Spring Trust Department because then the bank can be a true fiduciary meaning they owe you a greater duty of care, it's memorialized on paper, and they have all the authority that you have given them appropriately to make sure that your bills are paid and your concerns are met and that your financial, your money is working for you the way you intended it to. And that's really terrific. And then the other great thing about a trust is after you pass away, we don't have to go explain anything to the court, we still have to use income taxes are still owed if you have a very large estate, estate taxes are still on it does not avoid those two things, but it can very efficiently and nicely assist whoever is wrapping up your affairs like the trust department or an individual do so much more efficiently and expeditiously.

    - It's when set up, well, it can be a really nice clean transition while a client so alive when they have a period of poor health when they pass away and the trust can even continue on afterwards to protect family members. So it can be a great tool with lots of flexibility and a really strong incapacity plan but it really has to be it's in the details not just how well the documents written by the attorney but how well is the plan implemented and executed and the trustees have to know what they're doing who are named in the documents because it's if then they're gonna need help and so we get hired at Sandy Springs Trust a lot to provide help to nephews, nieces, sons, daughters who are named in these documents, sometimes the bank's named as a backup sometimes we are the primary for clients who either don't have children who just aren't comfortable naming children for different reasons that they don't get along, they're not local, they're very busy, they don't handle money very well. So there's a lot of reasons why we get that phone call but now trusts are a great tool when for the right client when set up properly, they are amazing vehicles but they have to be set up the right way and they have to be the assets have to be titled in the right way. And the beneficiary designations have to be set up to coordinate with the trust and there's no set way of doing that it just, it's very much case by case the estate planning attorney needs to work closely with the client when they're using trusts on things like IRAs and how do we, coordinate the different assets moving in different ways to make up that end result of what we're trying to get to.

    - I agree

    - Brings us to the last topic of the day.

    - The one time I really don't like to use trust is if you have a family at war with each other, because with a trust, if you have a family at war where they're gonna go to court and contest things there is not a smooth, the court that you have to go to is not the same court as if you have a probate situation where people and also the deadlines for how we're gonna fight basically are very unclear. So I do occasionally have a family coming to me and say, yeah, my kids hate each other, which was so sad. And I'm like, we're not doing a trust because if we now we're gonna talk about probate, which is a good segue to it in the probate process, it's a court supervising what happens and there are very firm deadlines that cannot be deviated from in a very clear process for who can do what when, so I'll, I love a probate when people can't stand each other because there's deadlines and if you miss a deadline, the court is like the deadline is published is in the public record and to quote my friends ex step monster, oh, well, so isn't the great evil, and you said it, it's not it's quick and the register wills, they're educated they're kind and they're helpful so what more could we ask for.

    - No, there were a wonderful group and so we're very fortunate that they've really tried to make it more user-friendly again, what we stress to clients is look at the number of account numbers you have, look at the number of locations you have any cleaning up you can do the fewer moving parts is always gonna be more efficient if you have eight IRA accounts can you maybe consolidate them into two if you have those stock certificates those computers share direct entry tracking, they, it can be so much easier if we could get those positions into one holding account. So now we've got one phone call to make and all of the positions in that one account can be handled through that one transaction instead of 20 separate transactions, so it can help with costs, it can help with time and whoever you're asking to do this wonderful job for you which is take care of you, there'll be grateful that you've made the life a little simpler. So we're left with the will, so the Will's gonna control assets that don't get controlled by one of the first three things. So if an asset is in joint name, will has no power, beneficiary designation Will has no power, trust assets with assets in the trust will, has no power. So I guess for some clients a will could control every asset. And for some clients it could control in theory, zero assets. Yeah, but still an important document that is going to take care of, I guess it's assets that are in the client's individual name.

    - Yup and then there's also the dribs and drabs that come in you got a lot of clients who have passed away this year and their stimulus checks came in they were issued while the person was alive and they came in after they died and we needed a place to put it. And so the will will direct how, who who's in charge and the will will direct where that money goes. And that has been very useful for people who've passed away and they have a will for just those little, tiny little pops of money that still need a place to go. And my attitude is it's your money so why don't we make sure that it goes to where you want even though it might not be a tremendous amount of money, it's yours, it's not the government it's not targets or whatever it's yours.

    - And so if somebody doesn't have a will the state of Maryland or whatever state you live in, will kind of put together a a substitute will. But again, that's not your wish, it's not your intent, it may not be the money may not be sent to the people you want it to be sent to so.

    - Exactly, for example, if you're if you're married and your parents are still alive but you don't have children, your estate will be divided between your spouse and your parents which can be a surprise.

    - Yeah.

    - Who knew, I didn't mean to give it to my parents cause I really wanna give to my spouse I'm like, ah, but you never will so now we're, that's what we're doing. Or sometimes we'll see families where a child has died and the grandchildren are strange from the grandparents and without a will, those grandchildren are gonna inherit which maybe isn't so bad for the grandchildren but it's not what my grandma and grandpa wanted, yeah.

    - Yeah I had a case where unfortunately, the husband passed away without a will and he had a minor child and a spouse and the assets will split between the minor child and the spouse, which creates just all kinds of headaches cause there was a piece of real estate, so it just made things so much more complicated so we stress to everyone everyone listening to today's program should have at the minimum a will a financial power of attorney and a medical advanced directive. Those are the three status revocable trust optional, your estate planning attorney can guide you as to whether that makes sense, depending on the type of assets and where you live and what you're trying to accomplish. But those three are core and it doesn't matter you could be 20 years old, a 30 or 40, no kids, kids, married, single because it's about control. It's about controlling your affairs so for people watching today's show if you're an adult you should have or will a financial power of attorney and the medical event director.

    - Yeah, I agree.

    - Sometimes we'll have parents, it's a very unpleasant gift but we will actually have parents pay for their kids to get the estate planning documents. And it's one of the most, unhappy gifts like, wait, this is a gift, going to see a lawyer, but it can act very this is the worst Christmas gift I've ever been given.

    - Totally.

    - It's about the only way to get them to go sometimes it's like, hey if you go see the attorney, I'll pay the bill just please get, because there's a lot you talked early on about one of your very favorite types of clients is new young adults with an, a young child is so important that they have the proper documents in place. And it's terrible to think about losing somebody at a young age but it does happen even before COVID it would happen. But I've been unfortunately lost two brothers during, the past number of years who died before their time and they both had children that they left behind and one had a good estate plan, one did not have an estate plan. And there was a big difference between, the stress that the family had to deal with the loss of a family members horrific, but then to go through headaches and hassles because you're, dealing with courts and delays and frustration because the assets aren't flowing the way that you would want them to is such a shame.

    - It is since it's a lot, cause for people and they're already dealing with their sadness, the person they cared about leaving and now they have to deal with a mess too.

    - Okay, so we've dealt with joint ownership, be careful if it's not a spouse, beneficiary designations be very careful cause it's locked in stone once you die, whatever that form says is gonna happen make sure that that's accurate. I'm the youngest of four us so you wanna make sure the youngest kid doesn't get forgotten and you kind of give Maggie, Gail, James, it's like Phil, we forgot about Phil he's the youngest.

    - I'm sure he's fine.

    - He's fine, go, I remember cause back when I grew up, it was like Phil go out and play and come back sometime later today, it was just, yeah, go it's a completely different parenting strategy with the youngest of four its like I got to just go out and come back whenever you wanna come back. And so we've got the beneficiary designations, we've got the trust key thing with trust is make sure the assets are titled properly so the trust is the wonderful job that it's designed to do. And then with the will again, make sure with the will that you're keeping an eye on the other ways that assets transfer to make sure everything's aligned again we're not saying one is better than the other, we're just saying they each have their role at the end of the day you and I do similar work is we figure out, hey the client's here, here's what you have here's how it's titled, here's what you want to accomplish when you pass away how do we get from A to B in the most efficient way possible? And how do we make sure we're not bumping into each other or crossing paths and tripping over ourselves. We want it to be tax efficient, time efficient, stress-free if possible. And it's comes down to working with professionals like you and I so any final words to say to our audience as they learn about different ways to move assets.

    - Well, for those, I'm an absolute pleasure to speak with you I thank you for.

    - You're welcome.

    - Bringing me in for this. And it's really just the first step just take that first step, just get started because once you get started it actually doesn't take that much time or effort. The hardest part is the first step of going forward and doing it. And then the other thing is if you don't know who you want to pick, that's okay if you just pick somebody cause it is better than nothing.

    - Yeah and not having documents if you have an illness, you deal with guardianships and court actions and huge frustrations. And if you die without a will the state will give you a generic cookie cutter solution and it just may not be what your intent was and there could be a lot of increased costs, delays taxes just a frustration for everyone so.

    - Yep, I'll be surprised if you ask someone to be your person they're oftentimes very honored by that request and we'll be glad to do it, so.

    - Yes, it is and for those watching, if you're ever on named and you need help, Sandy Springs Trust can provide support and helping individuals through this. And again, we work closely with Gail and other attorneys as we try and help the bank's role is to manage assets be named in documents and provide support to family members and individuals who are named as decision-makers. So we stay pretty busy trying to help clients navigate through this as well. So Gail, thank you so much for joining us today. And for those of you who joined us our discussion series thank you, Sandy Spring Bank has been around for 153 years since 1868 with the largest community bank located in the greater Washington region. If you bank with us, thank you for banking with us. And if not, we hope you might consider Sandy Spring Bank. Please share knowledge of this discussion series with others there is no, you don't have to bank with us to learn about the different topics, I'll be interviewing professionals in law and tax and finance and health care sharing valuable information so we'll hope you'll let others neighbors, coworkers, family, friends, locally, and around the country be aware of this program that we host on the Sandy Spring Bank website, I also host a seminar series on the website as well under the seminar section. For those we do ask for your name and how you heard about the event but no one will reach out to you unless you ask. If we can help in any way, just let us know. Gail's contact information will be shown on the slide at the end as will mine and if we can be of assistance, let us know. We hope you're safe during these difficult times and on behalf of the bank, thank you and have a wonderful rest of your day.

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