Estate planning during Covid-19 times
Estate planning during Covid-19 times
Standby Hello everyone. This is Sarah with connect our elders. And today I have rod Hatley, managing partner of Hatley Law Group. Rod. It's so great to have you on the podcast today. Sure. Thanks for having me. I appreciate it. You're welcome. So for those of you that aren't familiar with rod, he is former Navy jag. And he's been a personal friend of mine for many years. Extremely thoughtful, individual and very detail oriented. And so, you know, it's no surprise that he's so talented and so thorough with his clients and his planning and asset protection practice. Matter of fact, actually, before I deployed rod made a point to get my daughter, a little stuffed bear that would help her get through us being separated. So that has continued to mean so much to us, Rod. Thank you. So we were going to get started now, and I have a few questions that I'm going to ask rod that is going to help us understand, you know, estate planning is always important, but it seeming that in these times of COVID, the importance has increased. And so we're going to address that as well as get into some more specific questions around estate planning and documents. So starting off, in this time with COVID-19, what documents should our elders have at their disposal? Excellent question. And I guess really, the best way to answer that, sir, is to say that everyone should have an advanced Health Care Directive. Now, I'm a California lawyer. So I don't know this will probably be seen by people across the country, I suspect that at least an advanced Health Care Directive here in California, and other folks would probably know it as a healthcare power of attorney. And then of course, HIPAA authorization. And those two documents are really key. So in the event that an elder may need to go to the hospital, then they've already thought through, well, what happens if I don't make it or if I'm in a persistent vegetative state or an irreversible coma? What do I want my agents to do on my behalf. So those are great documents to have the advanced Health Care Directive handles those medical decisions, and the HIPAA authorization allows your agents to have access to your protected medical information, and being able to talk to the doctors and nurses so they can make those informed choices. And very true. And given my experience with working in the eldercare industry, you know, we see these situations where people have not proactively planned and then it delays, the ability for them to be helped when there's an emergency or something happens. I would like to stay on that question for a bit more, making sure that they have their health care directives. So let's talk about how specific they should be. So is it enough for someone just to tell their significant other for example, if I go in life support, pull the plug? I don't want to be because what if there's adult children involved? Oh, sure. They don't agree. So how specific does this planning need to be? Well, I mean, it's, it's fine to tell someone orally. But here's the challenge with that. You may remember a case some years ago, where a woman I think, had had a heart attack, and she was deprived of oxygen to the brain. And so she told her husband, at least, reportedly had told him I only kept alive artificially, the challenge was nothing was ever written down. So her parents got involved. And so they actually, you know, tied up everything in court, which is not, you know, what the lady had wanted to have happen. But that was the practical result of not committing something to writing, and making it clear that in the event that I'm incapacitated, and I'm on life support, I don't want to be kept alive artificially, so your clients can get this written down and memorialized. Number one, it makes it really clear to the outside world, this is what I want to have happen. And it also takes the burden off of the family to make those gut wrenching decisions. What do I want to have happen? If something happens to me like that? You know, that's a really good point, right? Because, you know, usually when I'm having these conversations with people, that, you know, if they do even understand the importance of the planning process, then they're not getting the fact that they are truly taking that emotional responsibility from their loved ones, you know, not having to debate internally back and forth. If the time comes on, what is the right thing to do. So, you know, so making sure that these are put in place, I've seen it, you've seen it, it is of utmost important to make sure that you do this planning. So moving on, what do you recommend your clients do with their important healthcare documents? And where should they keep them? Okay, well, I mean, obviously, I always recommend to clients em, get a good estate plan, put it in place, keep it updated, and keep it maintained. Okay. For the health care directive here in California and anywhere else that be probably known as the health care power of attorney The HIPAA authorization. What I do in my practice, is I buy my client membership, a three year membership and a company called document. And I'm not here to show for document. I mean, they do great work, but I have it for myself. And I also get it for my client is not optional, they're going to get it, they work with me, it's a three year membership in document. And what happens is I provide a copy of their health care directive and their HIPAA authorization to document so and they get a card that they I asked them to keep in their wallet next to their health insurance card and their driver's license. And this card says that in the event that I'm hospitalized, and I'm unable to speak for myself, here's your call document at this toll free number, you can call them 20 473 65. And a copy of In my case, my health care directive and my HIPAA authorization can be faxed over to the hospital. And then my agents can be contacted, and they can show up on the scene and make those important decisions on my behalf. Because I can't so because I mean, let's face it in the event of an emergency. And remember, nobody walks around with a copy of their healthcare directive in their HIPAA. I mean, it's just it, let's be honest, nobody walks around with a copy of that on their person. But if we have access to it in an emergency, well, even if you knew where it was, I mean, the last thing you're thinking about is I gotta find Sarah's or rods, healthcare directive and HIPAA authorization. I got to get to the hospital, you know that that's your main focus. And then when you get there, it's like, okay, I don't I didn't get the HIPAA in the health care directive. I mean, what do I do now, you're not going to, you know, remember orally, you're going to call document because they've got the card, and they're going to pass over a copy of the documents so you can make those important decisions in the moment. Correct. Well, thank you for that information. Because I've actually never heard of docu bank. And I that's wonderful that you do that for your clients. That's a definitely it's a given they work with me, they're going to get it. And I think it's important to make it good for three years, because of in about three years, I'd like to have the clients come back and see me so that we can review their planning, make sure it still meets their needs, because the laws are going to change, their personal situation is going to change, my experience of attorney is going to change. So about every three years or so we should be updating their plan anyway. Or at least taking a look at it and make sure Does it still work for them? And then of course, renew their document membership so that they've got that peace of mind. Well, that's great. So some elders already have a will. And we're saying elders because obviously this is the connect our elders podcast, but this this applies to any adult, right, regardless of age. So if you have a will, there's a lot of does that mean that you would avoid probate just because you have a will? No, here's here's the big insight wills are a guaranteed ticket to probate court. So for those of the listeners who don't have any kind of planning, you're going to go through probate when you pass on Sunday. And for those who do have a will, the simple will, that's a guaranteed ticket to probate court. So I guess the best advice I can give is, if you own real property, at least here in California, it makes a lot of sense to have a living trust and put the home and any other real property you may have in the living trust. So to avoid probate. And just to give you a very quick example, here in California, here in San Diego, where I live in practice, let's say someone has a fair market value home at a million dollars. I mean, forget what the equity is, let's just say the fair market value is a million dollars. The statutory probate attorneys fee and the personal representative speeds when you combine them on a million dollar property is $46,000. So call it 5% of the value of that asset is going to go to a statutory attorney and probate personal representative fees. So that can all be avoided by having a properly drafted and funded and when I say funded, I mean transferring the assets into the trust, safe plan. So wills are fine, but the problem with wills is they only come effective when you die, and they guarantee you going through probate court. So living trust, a trust is valuable for two reasons. Number one, I'll pick on myself if I become mentally incapacitated as a result of an injury or a disease, then if I hadn't done any planning, and so that, you know, I have, but if I hadn't, at some point, someone's going to need my signature. Again, as they put me for the probate court judge downtown, they say Your Honor, this is rod, he's incompetent now to manage his affairs. Please appoint me some third person to be his Conservatory, which is really a guardian for a grown person. And so guarding ship takes time. It costs money. It's a matter of public record. It's in the probate court, and we sometimes call that a living probate. And then someday when I die, guess what probate because all I had was a will where maybe I had no planning at all. But if I had Trust, no conservatorship, and if I put my assets are funded them into the living trust, no probate, no probate and, um, you know, it's people have this common misconception that you need to have significant assets, you know, let's say 500,000 a million dollars for a report to have a trust. But that's not actually the case, what is the dollar amount it basically, if you own a home, or if you have children, right, you need to have a trust is my, I'll say it this way. I mean, if a client has a home, I really recommend that they own their home. And certainly they got a mortgage on it, they own it free and clear. But if they've got a home and they're paying a mortgage on it, I think it's a great idea to have a living trust, put the Real Property into that living trust. And it will also take care of you not only you pass away to avoid the probate on that asset, but also to take care of you while you're alive. But maybe you're not well, mentally incapacitated as a result of an injury or disease. Now, if it's a situation where a client may have children, but they don't own a home, certainly standalone will supplement it with a power of attorney health care directive and a HIPAA authorization and the document membership, I think, can make a lot of sense, because they can say, Well, I don't really need to avoid probate, because you know, I don't own a home. But I do want to provide guardians for my children if they're minors if they're under the age of 18. So but you know, once they acquire that first home, or they have maybe $200,000, more saved in assets, maybe a bank account brokerage account, or more typically a brokerage account, then I think a living trust can make a lot of sense. But for the states, you know, I think a standalone will supplement it with the other documents would probably be enough. But it's all on a case by case basis. And as I'm talking very generally here, and every client situation is different. So it just depends on what's important to the clients and what really what their objectives are. So I hope that's helpful. It does that is helpful, especially regarding the property. And if you don't mind, I want to talk a bit more about the children factor. You know, even if we're specifically talking about elevators and the estate planning for them, I've had numerous clients who have adult children with disability. And so, you know, we can have these situations where maybe it's a younger couple, and there's no other family. And so, first of all, let me stop for a second, what happens to children if, for example, both parents are killed in a car crash, what happens to the children? Well, ideally, they gave some thought, to nominating guardians, possibly in a standalone will. But if they didn't, then, you know, next of kin would have to be contacted in something, they'd have to petition the court to the awarded, you know, guardianship of the children until the kids turn 18. And so it can really be a challenge. And that's all the more reason if clients have young children. You know, it's a tragedy, obviously, to lose both parents, but then you you compound that by not having thought through, well, who would Who would I want to take care of my kids love them raised and etc. So all the more reason get out ahead of this, think through it, who do you want to serve as the guardians of your children, and at a minimum, at least have a living, have a have a will in place to nominate those characters. And of course, when I work with clients that we do a living trust, will do a will as an additional document, and will nominate guardians in that will. And that's usually the best place to put to nominate the guardians, but will or a standard assembler will or a living trust supplemented with a will. Okay, great idea to put nominate guardians in that document. That's that's good information. And the reason why it came to mind is because in the past rod, I think I was meeting at you with you, your former offices and we got into a discussion about if guardians are not selected, there is the potential that before next to kin can petition the court that the children would go into the foster care system for a period of time, which could be just add to the trauma, absolutely. All the more reason you know, I just I plead with clients, please get out ahead of this, you know, you're only going to compound the situation, because the kids have to go to a halfway house or foster care until such time as guardians or prospective guardians can next kindy can be contacted, and then show up on scene petition the court etc, to be confirmed as guardians for the kids. So, you know, I think any responsible parent obviously wants to prevent that. But I know we're all busy folks. And this pandemic has certainly made that even more challenging, you know, parents trying to work from home, take care of their kids and etc. So all the more reason you know, please get this planning in place, the sooner the better. You know, give you peace of mind so that if something does happen, you're taking your kids provided for. Right? And, you know, one last thing on that particular question. So, you know, bringing it back to, let's say, the elder demographic, and the ones that do have adult children with disabilities, and during these COVID times, you know, maybe they're more fearful that that they might get it and their health be compromised. You know, it's even more important, it's a would they do a special needs trust for that adult child with disability? Certainly, and that's a counseling issue, certainly, as we meet with clients and to make a determination. I mean, if, if there's a child has autism, or there's some kind of special needs, so that they are receiving governmental benefits. You know, if if mom and dad leave an inheritance to that child, through their trust, or their estate plan, whether it's a will or a trust, and they didn't leave it in a special needs trust for their benefit, the tragedy is, the child the special needs child will lose his or her governmental benefits, the SSI, that medical etc, then they have to spend down through their inheritance, which is an absolute tragedy. And then they have to go re qualify for the medical and the SSI, that's all avoidable. And you don't have to put your family through that. So all the more reason if we've got a special needs child, let's have a conversation about how we can set up an inheritance to go into a special needs trust. So the money is available to be spent to enhance and enrich that child's life. But it won't be an asset that they can control. So therefore they lose their cup. They're very valuable governmental benefits, that that is such an important factor that we were elaborating on that. We do have some comments, right now. So let's see one of my colleagues, Tammy Moses, She's the founder of hoarding solutions. So she she helps people that has significant hoarding problems, because usually, hoarding is not so much about just collecting things. Usually there's a lot of emotion attached to people work through this. But she was saying her question was what is a good resource to create a trust? That would be you? Right? Right, you do the trust? Well, you know, a couple of ways you can attack that. One way is certainly in this is and you have people all over the country watching this today. So in your local area, you've got a Bar Association, there is a lawyer referral line. So you can contact the lawyer referral service at your local county Bar Association. And they can give you at least two possibly three referrals to an estate planning attorney in your local area. And I think you're entitled to a free half hour consultation. And if you like the person you're meeting with terrific, then work with them. If you don't like them fine, you may have one or two other referrals that you can go talk to, and work with someone that you that that resonates with you, you like them, they answer your questions directly and fully. And if that's the case, then I think you'll enjoy working with them. Or if I can be a contribution, certainly feel free to reach out to me, I'd be happy to hear from you to see how I can be a contribution. Great. And we had another comment from a Jason. Bobby err, I'm not sure if I'm pronouncing that right. But he was saying that we're having a smart discussion. So that's flattering. For those of you that are watching. rod is one of the smartest individuals that I've met. So I spray exactly what he's talking about right now. Real quick, before we move on to the next question, I think it might be a value for you to share your personal story as to why you can at least speak to the importance of doing this planning. Yeah, I mean, for for a lot of estate planning attorneys, you know, they, you know, may have transitioned out of litigation, because it was really time consuming for them. And this was, you know, a more reasonable practice area. And for some, it's just an intellectual exercise, and I get that and that's fine. For me, this is really personal. My father had a simple will. And as we've already shared, those go through probate. Unfortunately, in my case, it was a seven year probate back in my hometown of Memphis, Tennessee, and that's years, seven years. And that's not what dad wanted. But that was the practical result of not his dad had leukemia. So at that point in his life, he was making emotional decisions and you understand, but I just decided there had to have been a better smarter way to do this than going through a seven or a multi year probate. So when I came off of active duty in the Navy jag Corps, I went got an additional law degree, and then transition into the state planning and for me, I mean, I enjoyed my time in the in the Navy as an attorney, I was good at it. I was a criminal defense attorney. So if you're responsible for Hugh Goodman, that's what I used to do. But I was always in a reactive mode. Now I get to be proactive, and I like that eminently better. So that's it. For me. This is real world stuff. This is personal for me. And I don't want my clients to have to go Go through a probate of any kind. So that's not my goal when I work with clients. Yes. And I, you know, I feel that every time we have a discussion about that, so I'm confident that when you're interfacing with the prospects and the clients that they also feel that same sentiment rod. So next question. Okay, how often should an elders estate plan be reviewed? Well, I would harken back to the document membership that I get for all of my clients, it's, I make it good for three years. And ideally, I got the clients to come back within three years. But they don't have to come back if they don't want to. But I hope that they will. And that three years is long enough, because there may have been tax changes in the law, tax law, changes in their personal situation, changes my experience level. So those are all good reasons to have the clients come back in about three years. And ideally, not not more than five years, or some clients never come back. And that's fine. I have to earn that, that that was, you know, I have to earn their right to, to get the renewed business. But one line is I'd like to see them, you know, every few years or so, so bad every three years, I think is about the right length of time for them to come back in and see me. That's great. Every three years I was having a meeting yesterday with a private fiduciary. San Diego, Marguerite llorens, fiduciary services, and we were talking about the importance of reviewing the documents, and we were talking about the three years being, you know, that that's the longest you want to go. But also we got into you even aside from tax laws changing. I'm not an attorney. So is it the gift in the state tax law, I don't know what to call it, but you know, what I'm talking about. So, you know, regardless of that, or major life, you know, having more kids but you hear these horror stories where somebody has been divorced from their ex wife, for example, for let's say, 20 years, they got remarried, totally happy, and then something happens, they pass away. And then the former wife is still the beneficiary are the assets. And so this would be part of the review process. Absolutely. Yeah. And we taught, we work with clients to make sure that the beneficiary designations on life insurance, retirement plan, monies, etc, are updated to reflect their new situation. And it's not unusual in clients really meant to do it. But you know, they got busy, I've got him away, and then suddenly, they're out of the picture. And now unfortunately, you know, when it's all by contract, I mean, the, the beneficiary designations were never changed, or reflect updated to reflect the new spouse or whatever the situation is. And so now the former spouse gets the life insurance or the retirement plan, monies, etc. And that can be really maddening. But that's, you know, if the clients don't take the initiative to do it, and they won't work with us, then that's up to them. But we do everything we can to drive them to make these changes as soon as possible. Right, right. I also think, you know, doing the review, so let's say, a couple has multiple children, right at, you know, they do the planning, but then circumstances change with, let's say, one of those children, and they realize, okay, maybe for that person, we can't give the same not amount about mouth amount wise, but perhaps they need to now implement a special needs trust, because whatever situation and so, you know, I I have just experienced with dealing with many families over the years, the ones that did the proper planning, and one of the elders passes away, it really helps to mitigate the conflict between the children, if they made their wishes, very specifically known as to what they want to have happen upon. And that's all the more reason why it's so valuable to get out ahead of this and make it really clear. And what I tell clients is, you know, treating the children fairly, does not necessarily mean treating them equally. And there may be, you know, especially if there may be, possibly mom and dad have a small business or business that they run that's been very successful. And one of the kids possibly is involved in the business. And so we try to do equalizing distributions to the other children, because the one child who works in the business is going to get the business and so we try to balance that out. But just because we treating them fairly doesn't mean we're necessarily treating them equally. So that's a point to try to make clear to the clients. But to your point, if there is a child who has special needs, for whatever reason, let's make sure that we get out ahead of that and set up a special needs trust that would that would spring into existence at when mom and dad pass on Sunday, so that Europeans that child would receive will not disqualify them from their governmental benefits. Right? You know, I've never quite heard it put that way before, where the term equal is kind of relative meaning you know, being being treated fairly doesn't mean that it's in equal amounts, that's a great distinguishing you. Okay, last question, Ron. Okay, if an elder would like to visit with you to review his or her plan that they already have, or their current situation, right, that you charge them to do this, I don't charge them anything. The bottom line is, I don't even know if I can help them. So all of my meetings, whether it's with a existing client, or with a prospective client are all complimentary. It'll charge anything for the meeting. And so when we come to the conclusion of the meeting, if I can be a contribution, I'll say, Well, here's what my fee would be to move forward, what would you like to do next, and then it's up to them. If they want to move forward, that's fabulous. If they don't want to, or it's not the right time, or I'm not the right attorney. That's okay. I want them. I hope that, because we spent the time together, they're smarter for the conversation that we had. So even if they ultimately and this is for really more for prospective client, if they ultimately end up working with another attorney, that my goal is when they leave the office, they're smarter because of our conversation. And now they're empowered, they're in the driver's seat. And if they're working with another attorney, they can say, Well, I want this or I want that. And so now they're a lot smarter about what their options are, and they can make an informed choice. I hope that that resonated with me so much, because you're using the term empowered. Yeah, you're looking at it like that really resonates. Because the tagline of connect our elders is empowering, aging, you know, what you're doing is empowering them to make the right decision to do the planning. Regardless, they go, regardless of if they go with you or not. Empowering, empowering them to take care of themselves is the bottom line of what we're doing, which is super important. So if, if somebody has an estate planning need, or if they want to sit down and do a review with you, how can they contact you and get something scheduled? Sure. Thanks for asking. And if anybody would like to reach out best, I'll give you two points of contact with the phone office phone numbers area code 858-465-8000 2465 I'm sorry 858465 8002. Or if they want to send an email, they can certainly feel free to feel free to reach out to me at rod r od at halfway h at Le y Law Group. COMM rod at Happy Law Group calm. Okay, thank you so much rod. Everybody that tuned in, we really appreciate listening. If you have questions, Rod provided his information. But if for some reason you didn't catch that, feel free to reach out to me and I will certainly provide an introduction for you. We have one last comment from the audience, saying empowering them to ask the questions and make decisions. Elders really need that. Money. Thank you so much for that comment because that is the entire point of connect our elders and rod is of the same philosophy which I really appreciate. As a reminder, I am Sarah, on the founder of connect our elders and connector elders mission is to empower the aging process through education of resources, helping elders navigate those resources and being an advocate to choose what the right resources are and then implementing a plan to move forward. So thank you for tuning in today. And if you have any questions, please reach out to myself or Raj. Thank you very much and enjoy the rest of your day.