Hi everyone. Hey, this is Mike. We still have a couple of minutes, but I just wanted to log on. Uh, thank everybody and welcome everybody. Uh, thank you very much for being here. Uh, we still have some folks logging in and it looks like looks like I have two o’clock straight up, but there’s still some folks logging in. So, we’ll give it a minute or so and then we will we’ll get started. I hope everyone’s doing well out there. Um, it seems like this is a rinse and repeat for me to say I hope the weather’s much better because here in Houston the weather has been eventful. So, I was worried for a second we might not have power in our building, but everything worked out. Storm’s passed. Everything’s good. Oh, let’s uh give it one more minute.
It is good to see
a lot of new new names. Uh some regulars, so it’s always nice. All right.
So, if you’re hearing an echo, I don’t know if that’s everyone. That is not on our side, I think. Um, I only have one mic. Let me see.
So, the person who just emailed me that it looks like you’re logged in twice. I can remove.
Yeah, it looks like you’re logged in twice. So, that might be it. So maybe close out one of your uh one of your windows when you joined us. I could close you out, but I don’t know which one. So I didn’t want to do that.
So all right. So let’s go ahead and get started. 2011. Um if you’re joining us for the first time or me for the first time, uh welcome. My name is Michael Marx, certified financial planner and financial consultant with Alliant Retirement Investment Services or AIS for short, A R I S. Uh, as I said earlier, I live in Texas, specifically Houston. Uh, I’ve been doing this for over 30 years. Um, family been tied to Alliant for well longer than I’ve been alive. Uh, for those of you not familiar with Alliance history, uh, Alliant is Continental Airlines or actually United Airlines. all me saying Continental since since I’m here in Houston. Uh United Airlines Credit Union and my folks have been with um with the airlines since like the 1960s. So longer longer than I’ve been around. So um you know I realize that some of you may have found us through different channels, right? So obviously United or Continental or maybe Google or Tesla, CVS, Suzie Orman, however you’re here, welcome. I’m glad you’re here. Just a quick bit of housekeeping. [snorts] Uh so today’s session, let me read this. So today’s session is for educational purposes and includes proprietary material to protect both the content and everyone’s privacy. We ask that attendees please do not record or capture the presentation whether by video, audio, screen sharing or AI tools without prior consent. So, thank you so much for your understanding and again we are glad you’re here and bravo to that other person who’s in Houston too. So, and again I’m not sure if you joined this webinar via the email directly from us or if you signed up via the Alliant Credit Union’s website. So, I just want to take a couple of minutes and talk to you about ARIS. So, we are the wealth management and investment planning division of Alliant. So, people say, “Hey, do you actually work for Alliant?” I’m like, “Yes, we do.” If you go to the website, you’ll see my smiling face on there. Um, our services and our product offers are pretty broad. Everything from fixed rate guaranteed to as aggressive as you want to be out in the market, strategies to hedge against loss, or maybe a multiplier on the upside. Uh, most retail places cannot do that. Most of your self-directed stuff don’t allow you to do those things. But um just some of the different ways we can help right the complimentary financial planning uh I’m a CFP uh advanced planning if it becomes a little more complicated than that you know some of the conversions cash management flow tax strategies things like that uh estate planning today this will be a very high level uh obviously the investment management which is our primary what I would say is our primary job here um and then just broad range of investments so that’s our two minutes on what We do. Uh so if this is your first webinar, we do multiple webinars on various topics throughout the week with different presenters. Uh you can find a list of our upcoming webinars on our website uh which is found right on the Alliancredit Union’s website. So you can either go directly to our website at aerys.alliancreditun.com Alliancreditun.com events. Um, or if you just go to the Alliant Credit Union’s homepage, we’re up in the investment tab or on the investment tab in the upper right hand corner and you can just click that and it’ll take you to the website and schedule and all that good stuff. So, you can find our our podcast, blogs, um, wealth of other resources. I encourage you to take a look if you have not been there already. Uh, each of us host webinars twice a month. I usually do one in the evening and one in the afternoon. So, my next webinar will be in the evening. Uh that is July 28th on Tuesday at 6:00 p.m. Central and 700 p.m. Eastern. We’ll be talking about long-term care planning. Uh so, and really of all the potential challenges, right, potential headwinds and things like that of retirement planning, I would say this is like one of the more financially devastating if it does happen and you’re not prepared for it. Uh, and it’s one of the easier ones to prepare for if you even need it. Um, and just to be clear though, this is not a webinar on on long-term care insurance pitch. It It’s not that, you know, we we’ll talk about the headwinds and the options that are out there. Um, and and frankly, why it should be part of your retirement planning or at least a consideration. It doesn’t necessarily have to be in there, but at least it’s considered on the whatifs. And we’ll talk a little bit about that. um retirement income my one back in the afternoon will be in August. So August 12th on Wednesday and that is 12 central 1 Eastern. So a little bit earlier than today’s and it is titled the fragile decade. And what this does is we look at the 5 years before and the 5 years after retirement and what that looks like. Uh we’ll put some timelines out there how you get ready. Frankly, you should already start getting ready maybe 10 years before you start to retire so you can maybe get some of those tax strategies, income strategies in place. Uh, and it kind of allows you benchmarks as far as where you should be and what that should look like.
Voila. So, I appreciate your patience with the housekeeping. So, let’s jump right in. So, what is the purpose of estate management? So estate management is about preserving your assets that you’ve spent your whole lifetime building. It’s about protecting your spouse, your children, their heirs, and ensuring that your assets are distributed how you want them to be. Um, it’s really about managing the amount of the estate taxes that may be due. Now, I will tell you, um, most of you will probably not have estate taxes, but there are other taxes that go with it. Um, so we’ll look at some of the fundamental estate management principles and how to enable you to manage your financial and personal affairs during your lifetime, right? So you can distribute that wealth after death. So there’s two objectives for estate management. First is managing your financial and personal affairs during your lifetime, right? And second, distributing your wealth after your death in an efficient manner in the way that you want it to do. So if it’s done well, it can make a huge difference, right? And you can you can be able to spell out how your health care wishes are and in ways that you ensure they’re carried out, right? Even if you’re unable to communicate, right? So you haven’t died, but you’re not you’re not where you can communicate these things. All of these things are in the in between. some of the things that we’ll just we’ll touch on today, right? You know, how you choose your heirs, um you know, how you might want to communicate that as far as what your your wishes are, right? So they can have a better idea because it is really difficult because you know, we’ve seen this with other clients where where someone passed away, you know, and and they have no idea. So it it it makes things just a lot easier for those who are frankly left behind.
So we found it helpful to illustrate the various estate management principles and strategies as a pyramid. Right? So the foundation is formed by an understanding of how estate taxes work and as we move up we encounter more critical estate management documents at the top. It’s really specific tactics for for the management of it. So let’s talk a little bit about the foundation and how how they work. So in order to understand how they work, we’re going to take a little look at the history of estate taxes. So the first estate tax was established back in the late 18th century, so 1797. Um, and it was really to fund the undeclared naval war with France. So shortly after the war ended, that tax went away. And then it happened again for the Civil War and the SpanishAmerican War in the 1800s and Congress passed the estate tax to pay for the war. Then it repealed afterward. Now we know, and if everybody’s anybody’s a politician here or has family as politician, this is all tongue and cheek and my apologies for that. But we know how Congress in DC and when they start paying taxes, it’s very hard to give that up. So in 1916, the 16th amendment of the constitution passed in 1913, right? And that one gave Congress a right to lay and collect taxes on incomes from whatever source derived. The Revenue Act of 1916 established a state tax, and it’s been modified over the years, but it’s never been repealed. So, um, there was a sunset provision for some of you who might know that that back in 2010, it eliminated estate tax that year. So, I’m going to jokingly say that was a good year to die uh if you’re worth over a certain amount, but I don’t know if there’s any good year to die on that. But, so in 2012, right, uh, the American Tax Relief Code made the estate plan a permanent part of that tax code. [snorts] Um and in 2017, this will matter, uh the tax cuts in the jobs act doubled the estate tax exemption, right? So it went from about 5 1.5 million, it was 5.49, it went to 11.18 million. And that’s why I say most people the states won’t actually pay estate taxes. There’s other state there’s other taxes, but that that matters. So in 2020 uh cuz it was graduated so it rose to the 11.58 and in 2025 it rose to 13.9 million. That was supposed to um be a sunset provision at the end of last year but the one big beautiful bill act in July eliminated the sunset provision and it increased it to 15 million a person. So you actually have an exemption of 15 million before you actually even have to pay estate taxes. And that’s per person if it’s done right. So if you’re married and you position the assets correctly, it’s a $30 million exemption. So um this is a hypothetical example uh that shows the formula for estimating the estate taxes and and it’s actually quite simple. Uh note that we’re only going to talk about the federal estate tax though, right? because about a quarter of the states in their union have their own additional state estate tax. Uh so it’s actually 12 plus the District of Columbia have a state income tax in addition to the federal estate income tax. So uh if you don’t happen to have a complete set of IRS tables laying around, you can estimate the federal estate tax just by using a quick formula. Right? So this this this slide uses I think it’s 2024 numbers but it’s the same process. So you bring up the gross value of the estate, right? And you you would ex you would subtract that exemption value, right? So it was 15 million, but since it’s 2024 it was 13.6. So you’d have a taxable estate uh of just under 1.4 million. So 1,390,000 and 40,000 is your tax rate on that. So your estate tax that would be due to the federal government would be 556,000. Now there are multiple tiers just like your income tax. There’s multiple tiers um for estate tax as well. How much over that exemption? So that top tier is for a million and over. But the tiers, they start at 18% and they go up to 40%. So after you complete your estimation, right, you’ll find your tax, the yeah the estate tax bill. And so now I will tell you if in your head you’re doing that, you’re like, “Oh, I’m going to owe estate tax or at least my family will,” you probably will benefit from like more complex estate management. But we can talk about that at another time. So again, most people aren’t going to have this problem because the average person is not worth 15 million. The average married couple is not worth 30. So if you do have this problem, there’s statistically a pretty good chance that you already have your affairs in order, but some don’t. Okay, so your most basic, it really starts with a will. So more than half of Americans don’t even have a will. All right. So I would say a greater number of people are are impacted by the lack of basic planning. And this basic planning just begins with a will. So know this, you already have a will. The difference is whether it’s your wishes or if it’s determined by the state that your assets reside. So, if you die without a will or some type of planning document, right, you’ve died in testing, right? And if that happens, state specific laws determine who inherits your assets. Um, so it’s always better for you to decide instead of letting the government decide. At least I believe that to be true. So, there’s a number of critical documents that you’ll need to be part of your estate. And the first one is a will. Uh that’s the most basic estate planning document. There are other ways to set up your current accounts like your bank accounts, investment accounts, and to where it’ll bypass probate. So you don’t need a will. It would bypass the will. Uh but a will basically tells the world exactly where you want your assets distributed when you die. So, everybody should have a will, but according to one study, CNBC, 60% of Americans don’t have one.
And what I would say is these aren’t just for the wealthy, right? Because an in if when an individual dies in testate or without a will, it’s up to the state to decide how those assets will be distributed. So, even if you have a trust, by the way, someone says, “Oh, well, I have a trust. I don’t need a will. [snorts] That will will take care of any of those holdings that are outside of the trust. Like did you put your car in the name of the trust or is it owned as you as an individual? You know, it’s things like that. So, you know, the person who did mine is a board certified estate attorney. He’s like, you know, we always run both because the reality is is that someone inevitably will forget to to title everything they have in the name of the trust. So, it’s easier. It’s a simple one. It’s relatively inexpensive to have one of those. If you don’t, we’ll talk about that at the end that we could probably help you with that. Um, so since a will is kind of the cornerstone of your estate, uh, your will names an executive who oversees the process of distributing those assets. Uh, you can name a guardian, uh, if you have minor children still. Um, [clears throat] and it allows you direct to direct how your propertyy’s distributed, right? So, not just your cash, not just your investments, but like your house, your car, things like that. Um, but really a lot of times the wills aren’t the be all end all, right? So they do have their own shortcomings. The first one is wills can be contested. So in fact that probate court will send out a notice of the will to let anyone who might have grounds to contest it. And frankly, even if they don’t have grounds, it doesn’t prevent them from contesting it. But if someone wants to contest it, there’s potential for a lengthy battle in probate court and it costs money. So sometimes it’s not always so smooth. So there might be more efficient ways to get some of those assets to the ones that you want. So wills are essential um since they’re essentially instructions to that probate court. They pretty much guarantee probate, right? The probate process can be expensive, but not always. Um and it can take many months to more than a year to resolve depending on how large your or complex your estate is or if [snorts] there is anyone who can test it. So probate so when you die right your assets go into something called probate where they’re kind of frozen and during that period of time those assets are made public they pass away that the estate exists. So if you owe money, creditors can lay claims to that. Beneficiaries can say, “Hey, wait a minute. I think I am also I should benefit from some of that.” Um, so that matters. Um, and during that time, that’s when the probate court will, you know, they’ll determine the validity of the will and everything’s good. Then they will say, “Yep.” they give you the blessing and who whoever is the executive the execut will go ahead and start liquidating assets. Um
so if you only use a will, anyone can find out how much you left and frankly to whom. So, we’ll talk a little bit more about how you can avoid some of that probate and distribute your assets um to your heirs privately, but let’s talk about some of the essential documents that most people should consider having in place in addition to that. So,
so part of this right is not just after you pass but while you are alive. So, you know, you want to really take care of your estate. A will isn’t the only document. So, there’s a set of documents that you should have in place. So, among these are called advanced directives. Uh, and this includes a living wall. And basically what that is is that’s, you know, you might have heard them as AMD, advanced medical directives. So, they’re guidance to doctors on medical treatments you would either would like to have or not like to have like a do not resuscitate. A DNR would be an example of one of those or the information that is contained in those. You’re a power of attorney and there are different types of powers of attorney where you give somebody the authority under certain situations uh to handle your affairs but while you’re alive not once you pass because once you pass that power of attorney is no longer valid. Um the durable power of attorney for health care. So they allow you to um that person who’s designated to still work on your behalf uh when you no longer have the mental capacity for example uh to make decisions on your own. [snorts] So you can kind of decide early while you can, right? So there are also financial documents and agreements like joint ownership, that durable power of attorney, living trust.
So a little bit of a story. So back in like the late 90s, early 2000s, there was this case of Kerry Shyo. if I don’t know who’s on this or where we’re from so the ages but you know some of them are old enough to remember this but but this really brought that whole advanced directives to the forefront so if you remember or if you don’t so cherry drive was was severely incapacitated right and this was from like 1990 until 2005 so was cardiac arrest and resuscitated but had severe brain damage damage and she was left in a vegetative state. So her family battled for years about what should be done. So Carrie didn’t have a living will. So her wishes could not be known, right? So the husband argued that she wouldn’t want to exist in this state, but her parents disagreed. So they went to court. So this was just a high-profile case. So most Americans at that time still didn’t have healthcare documents, right? So so that’s why it’s important to not only have these documents, but to communicate to your loved ones as far as what level of care you want if you’re incapacitated. A living will provides specific instructions about your medical care if you become incapacitated and unable to communicate. So it goes into effect immediately upon your incapacity and it doesn’t need to go through any legal proceedings or at least additional legal proceedings. So the power of attorney document that’ll authorize someone to handle legal and financial decisions when you become incapacitated but to also give your effect upon your in they also going to effect upon your incapacity right and then they can trigger on an event that you specify. So, like having a living will, a power of attorney doesn’t need to go through any additional legal proceedings, but individual states, just know they have various power of attorney laws. So, consider, you know, just kind of where you’re at as far as when you make that decision on on what you’re going to do. The durable power of attorney is uh it authorizes someone to make decisions for your healthcare on your behalf. So like it’s like a living will and the power of attorney. It doesn’t need to go through additional legal proceedings.
So this is actually interesting. So about 70% of older Americans have advanced medical directives before their death. Now I would hope that number will get higher. I think that is still a surprisingly low number after the Shybo incident. Um, but I will say from a decade ago, uh, that’s up from 30%. So, it was at 30% a decade ago and now we’re at 70%. So, we have come a long way and frankly, I think, uh, we still have a ways to go. So, you know, I mean, when we’re looking at extended life expectancy, there’s so many treatment options that are available. the chance that you or someone close to you will benefit from an advanced directive I would say is probably greater than ever and will continue to increase. So a little bit about financial documents and how we have those set that up. So joint ownership uh right of survivorship is the most common. And basically what that means if uh I would say me and my wife but it doesn’t even have to be your wife. It could be you and a friend have a joint account with right of survivorship. If one of you passes away the other person on that account automatically is takes ownership of the entire account. uh power of attorney. Uh look, you’re in this case, right? You authorize someone to read this. You authorize someone to make legal and financial decisions on your behalf in case of incapacity. Now, I know this goes without saying, but make sure it’s someone you trust and not just from an like from their moral compass side, right? And you want to make sure they’re doing the right thing, but you also want to make sure they have the capacity to make those decisions, right? Like I like them. They’re a nice person. When you look at your kids, and I’m going to jokingly say this, I have I come from a family of five. I you know, I have four other siblings. There are favorites and there are the most responsible. In my case, I just so happen to be both. I won’t tell my other siblings that, but we all know the truth. So there are different types of POAS but in all seriousness right so whenever you name that you are giving them authority to make these decisions so you want to make sure that they’re capable and more importantly they’re willing to right because it is you might have to make some really really heavy decisions so you want to make sure they’re okay with that I wouldn’t I wouldn’t just just name them without having that discussion first so they understand the scope potentially what they might they might need to do. So, um this isn’t mentioned here, but I would say I’d be remiss to not to mention the power of the TOD and POD, which is a transfer on death and payable on death. So, you know, it’s for your simple things like um like your IAS and your 401ks, life insurance things, they already have a named beneficiary, but you know, like your checking and your savings and your CDs, they don’t have a named beneficiary. So you can add what’s called a POD, which is a payable on death. So if you pass away, this doesn’t have to go through the probate process. It’s still added to the estate for estate calculation, but it automatically pays to that that that recipient. Once they show a death certificate for a to uh transfer on death, that’s used in for like brokerage accounts for non-cash. So I have, you know, a brokerage account with XYZ stock in there. Um, I have mine set up as a tod. So, if something were to happen to me, they can automatically liquidate or just take the shares as is. So, those are free to add. And that’s why that is a good thing to have on here. Uh, your accounts, it’s not a bad idea to set them up that way. If it’s simple, you know, if it’s like, hey, I got one or two people that I want to get the assets. If it’s more complicated, that’s where your wills and trusts come in.
Uh, gifting. [snorts] So um so this is for 2024 because the gifting actually increases. So it the amount changes, right? So as of this for 2024, it shows that you can gift up to 18,000 without triggering a gift or an estate tax, right? So if you’re married, you can give twice that. You know, you want to say, “Hey, I’m going to give my son or my daughter or my grandchildren some money.” you can gift up to that per person. Um, so you know, in this case, if you could give away $18,000 and you gave away $19,000, the person technically that extra $1,000, you know, that 19 that you gave away, you get $18,000 as the exemption. You’re supposed to pay gift tax on that thousand. I’m not sure actually does, but you’re supposed to do it. But you can also file that against your um lifetime exclusion, you know, like the 15 million. Um but again, I’m not sure who does that. I’m just saying that’s what the law is. So in 2026, an individual can give away 15 million over his lifetime without owing any federal gift tax. Uh couples can leave twice that amount. So, but also keep in mind, by the way, so also keep in mind that they have their own estate tax regulations at the state level. So, so even though you might have it on the federal tax side, depending on where you live, you might still have to pay something on the state side. So, trusts can be another powerful estate management tool. So, it’s a legal entity that can own property, right? So, a trust when you pass away, basically a trust is an entity that lives on Um, so these can be used to avoid probate, right? So it avoids delays and the expenses that accompany probate. They’re not a matter of public record, which a lot of folks find that very comforting. And they are a so they’re a tool for maintaining your privacy. Um, but they can also provide an effective man management tool and distribution to your heirs. I’ll give you an example. So we have some client client who passed away. Well, they had um more than one child, right? More than one beneficiary. So, so beneficiary. Well, one of their children were not um how do I put this? One not financially responsible. So, they put in, you know, it’s like a spend a spinth a spend threat provision. Basically said, look, they get x amount of dollars when we pass away, they’ll get monthly, and every five years they’ll get a lump sum. etc. And then they put an exception in there. If there’s medical or some type of emergency, they’re allowed to access. Uh it looks like someone just asked a question. Uh unfortunately, there is no they they don’t record this. So So it’s a compliance issue. We had asked about this about being able to put these out there on demand for them to listen to, but unfortunately that’s a no. Um but if you have any questions, you can always just I’ll my information will end. Um so look so even after your death right these can allow you to have some control over how those assets are distributed to children and and other beneficiaries doesn’t have necessarily your children. Um and trusts are a lot more difficult to contest than a will. Uh so using a trust it’s it’s a it’s a more complex set of of rules of tax rules regulations. So before moving forward with the trust, you want to work with a professional who’s familiar with the rules and regulations. I can tell you the person who did mine, he’s a board certified estate attorney. We have some of the basic planning available to our members and certainly to our clients um at AIS. But if you have questions, you know, give us a call.
So how does a trust work? So, [snorts] you know, the first thing is you have to look at like the value of your estate. You make this calculation. You you you include all of your property that you control, right? So, it’s not just it’s not just like your retirement accounts, your stocks, your bonds, brokerage accounts, checking, savings, CDs, etc. Right? You still have to look at like your home, your real estate, uh right? If you own a rental, if you just own some raw land out here, vehicles, uh what could be like a gun collection, a stamp collection, art, things like that, those can all have significant value. Any business interest you might have, life insurance is also included in that estate. Um including those death benefits if you don’t name them correctly. So,
you have to exceed that 15 million for you to be subject to federal state taxes. So, this is one of those reasons why, you know, if if you’re around there, you might either start giving away some things early, spending down your estate. Um, but even if you’re not, frankly, you should consider getting your estate and healthcare documents in order so those wish issues are carried out. And and frankly, I would say yes, nobody wants to pay estate taxes, but more importantly, I would think it it impacts people to be able to make sure their assets go to where they’re supposed to go. Um, the second thing is is really this helps you get your your objectives in order, right? So, you can kind of ask yourself the following questions. And this doesn’t have to be set in stone, right? You you have the right to change this later. um unless you do something like an irrevocable trust, but that’s a little more complex planning. But as a general rule, you can change your mind later. [snorts] So, what you want to know is whom do you want to have inherit those assets, right? How much of that? Who do you want handling your financial affairs if you are ever incapacitated? uh who’s making those medical decisions for you if you’re unable to make them for yourself? Um how do you want to provide support for your spouse if you should die first? Right? Because there’s married couples and there’s children, grandchildren, etc. So, how do those assets go? Right? Like we don’t have children, but we have nieces and nephews and siblings. So, we were having this discussion. Obviously, our assets go to each other, but what if something happens to both of us? Where do we really want that to go? Um, so that, you know, that’s actually a whole separate discussion where a lot of folks may not actually have that discussion. So, you do want to have that. That’s important. And if you have young children, you know, how are they provided for and who is going to provide it, right? Who’s that guardian? Make sure you want to talk to them about it. Make sure they’re okay with it. And frankly, even pets, right? Um, if something happens to me, who gets my dog? Who takes care of my dog? I’ve already arranged arrange I’ve made arrangements for that. I provided money for that. Not I can’t remember who that was. They left like millions of dollars for the care of their cat. Um, someone from New York. But anyway, great story. Great cat story. Um, but but those things matter, right? This is an opportunity to talk about what is important for you. if you are not here. So, so life insurance, right? It can play critical roles in your estate management, right? If you’re using this in conjunction with a trust and frankly even if you’re not using it in conjunction with a trust because you might have a large qualified account, right? Like a um like an IRA. I got a big IRA. If I pass away, my spouse can take it over. So, that’s really easy. But if we both pass away, then my beneficiaries get it. And if a non-spouse gets it, they have to distribute that in 10 years. They change the laws a few years back where before you could take it over your lifetime. Now, nope, 10 years. So, when that goes to those beneficiaries, it’s due federal income taxes do it in their tax bracket. So, this matters and I have this discussion with our with our clients or the members who we manage their money and that when we’re looking at beneficiaries, I ask this question, you know, it’s like, well, you’re retired now. This is your tax bracket. How are your children doing? Are they successful? Yes, they are. They’re in a much higher tax bracket than I am. So, what do we do to prepare for that? And some say, “Yes, I would like to make those preparations. What’s a more taxefficient way to do it?” And others say, “Too bad. I don’t know.” So, they have to pay taxes on it. They’re still getting money. So, there’s no right answer. There’s no wrong answer for that. But, it should certainly be considered. So, you know, when you’re looking at you might have an irrevocable trust, right, which it removes it out of your assets and that funds it. Set up life insurance and we normally do this under really big tax liabilities and it doesn’t have to be a state, but it could be a large income tax um liability. So, they take that insurance policy, move it into that revocable trust, and at the death um those proceeds offset some of those taxes. So there there’s really there’s really a lot of factors that affect the costs, right? The availability of that insurance like your age, health, and like the amount and the type of insurance that you want. Um and they can have expenses, right? So you know what happens if it’s surrendered prematurely? What happens there? So it’s there’s just a lot of things, but those are things to consider. These are things that we talk about with the members um when we’re looking at hey what’s the estrade structure look like? What does that look like for you? So
your two big questions, right? What’s the value of your estate? And what are your objectives for that estate? And you should visit that I want to say every year, but it’s unlikely that that’s something like that, but certainly every few years just to make sure all those things are still aligned or if there’s a major change with those beneficiaries like a marriage, a divorce, um not only just your own personal life, but like your beneficiary, your kids get married, your kids get divorced, they have a baby, now you have a grandchild. Is it something that you’re like, you know what, I would want money funding if something were to happen to pay for their college or care or their first home or whatever that is, right? Their first car. Um, there isn’t a right answer on whatever your objectives might be, but it allows you to get them organized and down on paper or electronically. I’m not sure if it’s on paper anymore, but um, so so here’s here’s a couple of things, right? So let’s just kind of an example of some of those scenarios. So your lower left hand side is Anthony and Selena. They’re a couple with a child. So that they might look at what’s the best way to gift assets to our children and our grandchildren, right? Because because this is a discussion that we have, right? You can wait until you pass away and get that to them or can we spend down some of those assets? Um and and frankly, they need it now, right? they might need it now. Uh and we get to see them enjoy it and benefit from it. So there is something that they benefit as well. Um if you have a blended family, right? So we have a lot of those in the United States now where we’ve come together in a union and each spouse has has children from a prior marriage. So how does that look like? Right? How do we structure for that? Um Dave, Christina, the upper right, they’re retired. So what would they want to know? So is a living trust worth the trouble and expense to set up? Depends. Depends on your assets. What’s the best way to take title of the assets? So Rebecca on the far left, she’s a single parent and business owner. Uh is there an estate value threshold that creating a trust makes sense compared to or not? So we’ll I’ll feel the questions. Oh yeah, I’m sorry. So thank you. So, for the folks who are putting questions in there, or if you’re not and you do have questions, go ahead and put those in the Q&A box and we’ll address those shortly. We’ll leave time at the end. We should have plenty of time at the end. Um, or even in the web chat. Um, so this one is very common, right? It’s very common for single parents and she just happens to be a business owner. So, how does she protect her business interest in the event of her passing? Um, do I have all the critical documents in case of a tragic change or catastrophic change in health? Now, I will tell you this. This is actually something very interesting for business owners. If you’re a business owner and you are attending this webinar, if you have a partner, right? And I’ll give you an example. So, let’s say you’re business partners and you both are married and one passes away. Well, that spouse just owns half your business. And so, now you get to do 100% of the work. and you get to share half of that revenue. So, not exciting. No one’s usually too excited about that. So, there’s there’s documents and structures that you’ll want to put in that force a buyout, right? Whether it’s um whether it’s cross purchase on the insurance, but you know, you value your your value the business. So, let’s say our business is uh worth 10 million and business owns like a $5 million policy and when one passes away, those proceeds are used to buy out the other spouse and they don’t have a say in it, right? That is something that is agreed on while you both are still alive. Um, so Isaac over there in the lower right hand with his laptop, he likes to do research online. So, are the critical healthcare documents I downloaded legally binding? So, depends on where you downloaded them from and how would you make sure to avoid probate and estate taxes. If some of those questions are, you know, give us a call. No problem on that. Um, so this is actually something that we just recently added because a lot of folks will say, hey, you know, do you have someone? And it’s like, well, depending on what you can do, there’s online that you can do. Um but we can help at least with a cost-effective solution on this. So we use a uh trust and will they provide access for legal documents right? So it’s a reduced cost for our members there. It’s actually free to actually clients of erys uh on how they do that and that’s some of the basic you know trust will power attorney etc that living will that we had talked about. If it’s more complicated than that, then we would have a um you’d have like another attorney and and I will tell you, so since we’re all over the country, I it would just kind of depend on where you’re at, but here the the person I use, the board certified estate attorney, he’s the one who actually didn’t mine. So, um so that’s just that’s just something out there. It’s just one of those things we offer. Now, we don’t actually make any money on this. So this is just something that we have so many that that we allow we have this done through a a third party at a a reduced rate. So with that we’ve come to the end. So we’re we’re actually at the Q&A part. So I want to thank everyone for attending. I’m going to put up a one question survey. And what this does is so we’re a full-ervice investment firm, right? Planning investments. We are fiduciaries. Uh, so while we’re going to do the Q&A, I’m going to put the uh quick survey whether you want to schedule some time with me or a call. If you have some questions about your specific situation, go ahead and click yes or just hit that QR code. And while you’re doing that, we’re actually going to go look at some of the questions out there. So,
let’s see. So, uh, is there an estate value threshold that creating a trust makes sense compared to not? Well, the obvious one is if you’re over that 15 million or if you’re married, if it’s over 30 million. But I would tell you if you’re under it, which most people are, trust still makes sense. And kind of the general rule on that is is if your situation is a little more complicated on how your assets are supposed to be uh dissolved and distributed. Like for example, you’re like, well, you know, I got four kids and I want each of them to get 25%. Sell it, done, we’re fine. Um, however, let’s say I live here in Houston, right? So there’s a lot of farms here. Um or saying, “Look, you know, we have a family farm. We have three kids. Two of them really don’t care about it. One of them really does. So I want it done this way. Strike some of those assets to do a buyout. If if that person wants to keep it, if it doesn’t, then just sell the farm, distribute assets accordingly.” So that’s so those types of situations where where a trust is helpful because a trust is an entity that does not die when you die. um it continues on, right? It’ll actually even file the taxes or someone will file taxes on its behalf. So, those are the situations where where you would use a trust. Uh let’s see, we have a few questions here. Awesome.
What’s the average cost of a simple will or trust? So, you know, online they have they have them as like the basic basic basic. I think I think they’re as little as like a couple hundred bucks, 150, $200 on like the basic basic. [snorts] Um, but again, a lot of those things could be or at least a lot of your assets could be removed too, right? Just by using POD and DoD. But yes, a basic trust will it’s usually for that package. Um, but usually a few hundred hours is use that and it could be a little more. or it would be more expensive depending on how complicated your your assets are. Uh what’s a ladybird deed or house will be paid off soon I want to leave to my children. Ah the ladybird deed. Okay. So a ladybird deed basically is like a it’s like a a tod for your house and and not all states have that by the way. So um I don’t know what state you’re in but Texas we have one. They’re pretty common in Florida. Uh so that’s basically what it is. So you can set up that deed and basically but you still have control of it. You’re still the owner. You are still Yeah. Okay. So you’re in Florida. So that’s probably the most common place that I think the Ladybird deed does. Um but it’s but it’s it’s I know we [snorts] use them here in Texas, too. And and they’re really common in Florida. So basically what it does, it names your beneficiary on your home. So when you pass away, it goes to them. However, while you’re still alive, you still have full control ownership of it. Um they don’t have access to any of the information on that. uh you could still sell your home if you want to move to something else and then you would just put that other home, you know, like if you said, “Look, I’m going to sell this house and move to a condo, like a something that that you would change that that asset and put that in there for your other beneficiaries.” It’s actually a pretty clean way to to do some things. Um we provide this service through trust and wills. Who specifically do we contact? Uh you can you can actually contact me and so we have a gatekeeper on this. So, it isn’t it isn’t someone that you can just click on um that will kind of get an idea. If you haven’t clicked [snorts] yes, just go ahead and click yes on this or or use that QR code and just give me a call um or take my contact information down and and we can get your information as far as what you’re trying to do and then you can say, “Yep, this is what it is.” If you’re not clients of Aerys, just clients of the credit union, um, not part of our division, then it’s a discounted rate for that. If you are clients of ours, um, like I said, we actually don’t make money on this. Actually, it’s a cost to us. So, we we offer that service or at least we’re test offering that service for right now. So, um, let’s see what else. Another question. That’s a good one. Here we go. trust which are created in the US and forcible in other countries. Uh they are not actually. So my husband and French and we have French property and live in the US with property here as well. So let me give you my disclosure. I’m not your state attorney, but generally speaking, no. And and also it gets a little weird too if if it becomes a citizenship thing. So like if you’re um if you’re married right with US assets um and and like my spouse for example your spouse weren’t a US citizen then there’s limits to how much they can actually inherit and the way they inherit that’s taxfree so it does matter. So the short answer is no assets over there they still fall under the jurisdiction of like in that case France. Um, but but I would say this by the way because because states because remember states
I don’t know if I can actually put that survey back up. I’ll tell you what. So, um, just just take my number down or something or I have you I can give you a call here. I’ll just take your information down.
We should have a way to to make that adjustment, right? So, in case you change your mind. So, I will uh I’ll give you a call. I’ll try to do it today, but it might be tomorrow. Um, so with that said though, I and I will tell you though, as far as property goes, this is the other reason. So, this is where it’s kind of matters on trusts and um because it is more complex of a of a um of a situation or or at least your will will will impact this too. So, let’s say I live here in Texas, but I love Florida, so I want to have a condo there somewhere in the Keys or something. I don’t know. Um or in Miami, cuz that’s cool, I guess. But, um it was pretty cool. So, so you know, if I pass away, so Texas has a state laws for Texas, but so does Florida. So, so these things still have to be taken care of under under those jurisdictions. So, that does matter. So depending on where your assets are and this is some of the things that we talk to when we do the planning for our clients but yes that does matter not only within countries thank you for that question but also in states where that property is. It is not uncommon for people to have a vacation home for example somewhere else. Um, let’s see. Let me go through these and make sure I got all of that. Any other questions?
State tax. Oh, this is a good one. Okay, so um, someone asked on taxation for a retirement account. So, remember when I said um most people won’t pay estate taxes, but there are other types of taxes. One of those things is income tax, right? So, let’s say I have a retirement account that my wife’s supposed to get it and if she gets it, she just steps into my shoes, but we both pass away and our children are going to inherit it or grandchildren or whomever. um that is taxable at their tax bracket, right? They have to distribute over 10 years, but they have to pay income tax on that. So, there is still taxes due. Um so, it could be property taxes, things like that. So, the the thing I think that will will get most people is probably the income tax on retirement accounts. So, there’s things that you can do to kind of structure that or start making arrangements for that. Now I think that I think those are it. I think I got all the questions on there. Thank you so much for the participation. This makes this so much easier. Um and I really appreciate the engagement. Uh if there are any questions, please reach out to me. Uh thank you so much. we are going to officially end the uh the webinar, but I’ll still be around for a couple of minutes if anyone has any questions. So, thank you so much for attending everyone. Be safe and have a fantastic rest of your day. Take care. Bye now.