Estate Planning: Don’t Neglect It

Maintaining your legacy after passing away, although a very sensitive topic, is vital to the life of a business and personal belongings. Leo and Claudine welcome Theresa Mason, estate planning attorney, to discuss living trusts and the benefits and pitfalls of estate planning.
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Speaker 2 00:16 Hey, Hey, Hey. Happy Saturday. Good morning. It’s 10:00 AM. And guess what time it is. It is time for business and legal talk with Leah and Claudine. And I am your host, Leo Landa Verde and my cohost, Claudine. Good morning. What’s going morning? Good morning. Another, another rally Saturday nor the day in paradise. Hey, wasn’t that last show? Awesome. Should we, if you don’t mind me saying we rock. I know, I know, but it was great to talk about insurance. Yes, thank you Matt. It was great having Matt and EI. So this is whereabouts I know you enjoy, you know, here. And I’ll start from, from, you know, every so often, but it is even better for you as an audience to heat our guests. And we really work hard at having experts in their fields. So mad it was, it was great. You know, we had some great, um, uh, vendors, uh, payroll, uh, merchant services, um, you know, health insurance, um, we’re looking out into today.
Speaker 2 01:16 Hey, today special tree. It is really special. It’s super special for me. Super special. So we have, I’m going to, I’m going to just kind of tease you guys. We are in for a gray show that you’d really need to listen to. And, um, we’re gonna talk about that in a minute. But for now, Saturday, what’s going on in our world? What’s going on in your world? Flooding, Jess? Getting ready to see September coming around the corner. We just, yeah, I know I fall is about here, you know, there’s that point in time in August. Um, and fall is my favorite, favorite season. So his mind really my son as well and my son and I am, there’s always that first day, um, in August that you feel fall and it’s, for whatever reason it’s something about the days are getting a little bit shorter. Maybe it’s a little bit cooler.
Speaker 2 02:06 Um, I’m not sure what it is, but every August it hasn’t happened yet. Um, but every August there’s that one day that I go, ah, I felt fall. It’s coming. You know? Did I tell you that I went to school in the Midwest? Yeah. Yes. Uh, Wisconsin, Wisconsin. Close enough. Sorry. Cold weather. But, uh, I remember some of the funnest memories I have from college was that this started this school year and you know, went to the university of Wisconsin, right. Um, in the great lakes in the temperature would be starting to kind of get into the 60s, C and F and, but it was just walking around campus. And in the end of this, you know, all the leaves start to fall in the beautiful shades. If you walk around in the, in the highways, there are highways in the Midwest and the I 95, and uh, you will see far all the beautiful colors of the rainbow. Uh, the yellows, the oranges, the blues, and the screen. And that’s what it was like for me. And Dan, of course, pretty soon did the, you know, there will be no more leaves on the trees and then you get the winter. Right, right. That’s probably why I left. I love the fall. I hated the winter and especially falling on black guys. That wasn’t much fun. I’m a California native, so yes,
Speaker 3 03:23 we just, you just got a little sense. It was getting a little cooler, but it didn’t get, you know,
Speaker 2 03:28 minus 20 degrees is no fun. Good grief. That’s what it was. Some times 20 degrees minus, so below zero, uh, where you do ice fishing. That’s how, you know the kind of weather that I went to school and I tried it. I think I got frostbite. I just try just you, cause you have to get the cure out there and you have to make sure that you can, you have X amount of fee that you can stand on eyes. And I think there’s a formula and you have to drill to take, make sure, but you gotta be able to almost park a car to be able to ice fish, you know, and it’s solid eyes and yet the drill, it was a hole. It just, I just, it just seems like you just sit there in the cold. I mean the problem with ice fishing is that you’re not moving.
Speaker 2 04:13 Yeah. Sitting around outside in the cold and the fish Lake Michigan and the great lakes are big enough to be oceans. I mean this, right, right. It’s, it’s just a different world anyway. What, what, how we get to, Oh, it’s fall, you were saying fall. It’s alright. Well, okay, well let’s bring it back. Maybe next year. We easily get off track. I’m sorry. Sorry about that. All right. So, um, so on our end I think is a, is just, you know, I said it last week I started, uh, I started, uh, I’ve been talking about it cause planning. You got, if you have a budget, if you run running your business on a budget, which I recommend any business regardless of your size, you should look forward every year with a budget. You know, if you don’t have a goal, any goal will do. And some of the most successful business owners I have, they have idea where they’re going to be next quarter.
Speaker 2 05:06 They have the fourth quarter. They are already thinking about their role in 12 months. So those are the kinds of things that you should be thinking about. I worried about on the profitable side, if you’re not profitable, you got, you got, you know, now we’re getting into the third quarter and the fourth quarter, you need to extract some profit. There’s no point there. You know, there’s no taxes, there’s no income. Right. But the goal is, you know, I, I think it’s actually a good thing to pay tax. It’s just to pay the lease, but you’ve gotta be profitable. But with today is about the sustainability. So what are we talking about today? Talking
Speaker 3 05:36 about estate planning today? Yeah. Estate planning. And it’s something that we deal with quite a lot in our, in our industry. And, um, surprisingly it’s one of the most difficult things for people to, to do. Um, I can get people to come in and, um, you know, write a contract to buy a business, spend money or sell business, um, you know, do very complicated things. Um, but it’s more difficult to get people to come in and do a living trust or do some estate planning. And I know that, you know, we really are empathetic with people because it is, it is talking about, um, you know, life after you’re gone. Um, but man, it is so important. You spend so much time building your business, building, um, you know, your life, your assets, your legacy. And um, a lot of people have a misconception of what happens when you die in terms of your belongings and your stuff if you’re married, right?
Speaker 3 06:29 Most people think, Oh, just cause my wife not quite that easy thing. Things are not quite that easy. Um, in, in addition, you have to take into consideration, um, you and your wife or you and your husband, um, may be in a car accident together. You may be on vacation together, um, and things, um, have to, uh, we need to have some instructions. The family needs to have instructions on what to do and it’s really, um, it’s really a gift you’re giving them. Um, and so, so many people, we sit with them. I’ve sat with countless people across the table and have had to deal with difficult conversations and it gets exponentially more complicated for people. Um, not from a legal perspective, but just from a mental and emotional perspective. If you have children from previous relationships, um, and you’re, maybe you’re married to a second spouse now and you have children from previous relationships.
Speaker 3 07:25 Um, it really is, um, uh, kind of heart retching to, to decide how, how are we going to do this? How is this going to happen? Um, and, and a lot of things get mixed up into it. So today we have Theresa Mason coming from my office who is our estate planning attorney at our office. She’s fantastic, incredibly empathetic, the sweetest, sweetest person you could ever come across, um, and incredibly sharp as well. So she’s gonna stop by today and talk to us about living trusts and doing some estate planning, the benefits, the pitfalls, and, and see if we can’t, um, you know, break through some of the, some of the myths, misconceptions. So
Speaker 2 08:03 before we get into that, I mean, I am really excited about listening to Theresa talk, just because I, um, you know, um, there’s a lot, I don’t know. Um, in, in general, and this is sort of a nebulous it, you know, a lot of, I find people in general resistant to talk about, uh, the topic. Yes, I am, I am I wrong in saying that? And if you feel that is more bad, um, you know, um, that that is a taboo. Um, do you, do you find that
Speaker 3 08:34 I think, I think I personally have had six, um, consults, um, with six separate clients who, um, have some of them have paid already for their living trust, um, and they have not come back in to finish it and we call and hi, how you doing? Just wanna check in with you. But there’s this resistance, um, just because it’s a difficult thing to deal with and sometimes it’s difficult for one reason and difficult for another person for another reason. Um, but again, um, or there’s children and, and we’re not sure. I have one family who came in and, um, they farm. And so they have two children and one of the children farms and the other child wants nothing to do with farming. And so, um, in order to farm, of course you need land. So the idea would be to leave the land to the child who farmed and then try to compensate the other child with maybe some other assets that they had. And so this whole thing becomes like an exercise and complication of, of, of how, how are we going to do this and still be fair and still make everybody happy and still not have the children fighting and still and so on and so forth. So what what we would like to do is, um, communicate to the, the public and to the clients that this is all doable. It’s a contract we can contract for anything. We can set up anything we can take.
Speaker 2 09:59 so if you look at it, if you’re listening to this show right now, we’re talking about estate planning and we have Teresa Mason who’s going to be, uh, coming, uh, in the next segment. So you need a, you’re getting all this great advice for free by just listening to our show. So pate T, you know, pay, pay attention and this is, you cannot be successful without planning. And this is one of those things you got to plan for. So I stay tuned, we’ll be right back. You are listening to business and legal talk with Leah and Claudine. Awesome. Back in 60.
Speaker 0 10:42 . All right, welcome back.
Speaker 2 10:59 Wow. This month not, you know, there’s always some type of shows that are, are like all about money and percentages. This is not one of those shows. Yeah. But that doesn’t mean is not just as important. Absolutely. There’s no point in making all the money if you don’t know how to keep it and pass it onto the next generation, that sort of thing. That’s what we have to raise on here. So I’m very happy to have you. Good morning. Thank you Leon. Great to be here. Great voice to our guests. We’ve got great, we’ve been very lucky. We have all this great voices for radio in this and we’re going to lose our spot. It’s a great place to be. So tell us about yourself.
Speaker 4 11:36 So, you know, I, um, grew up in the Bay area and then I did my undergrad up at Chico state, beautiful Butte County, the five 30. And uh, then I came back to the Bay and I, with my business degree, I worked a few different business jobs, which I really enjoyed and learned a lot about running different businesses. And I decided to go back to law school because I figured a legal career is a great way to support businesses. And you know, estate planning is really an extension of supporting businesses. And I, it’s really near and dear to my heart. Um, you know, the Sharon law firm, we support small businesses in so many different ways. Everything from corporate formation to estate planning, uh, employment law, there’s just so many different areas. But employment laws a wonderful fit because it’s all about protecting your families and your businesses and your legacy.
Speaker 4 12:25 And, uh, you know, the more, the more time I’ve spent doing estate planning and helping families, you really realize how important it is. It’s about protecting your assets and, and then basically making sure that you’re making the decisions about who receives your assets at incapacity or death. So here in California we have something called, um, we have into state succession. So if you pass away without a will, it’s going to go through the mess through the method of it’s called purse derbies, which is a fancy Latin word for by the root. So basically what you want to do is have an estate plan in place, a will, a trust and advanced health care directive and a power of attorney, both a medical and financial. So with that full package, it really can help put you at peace that you know, what your instructions are laid out.
Speaker 4 13:13 And one of the most common questions we receive is, you know what, I can S I can put together a one page will, right? Um, but you know, a will is a very thin layer above intestate succession and it’s more likely to go through probate, but a will if it creates a properly funded trust that can override probate. So in OMP often what prompts our clients to come to us is because they’ve had a loved one or a neighbor or someone pass away without a will and they’ve entered that zone of intestate succession and having to go through probate. Um, so avoiding probate is often the idea of why people come to us cause they say, I don’t want my children and my beneficiaries to go through what I went through. So that, that’s often why our clients reach out to us. Uh, but there’s so many good reasons for setting up a trust and an estate plan.
Speaker 4 14:05 It’s, you know, there’s a variety. It’s all about naming guardians to care for your minor children. You know, if you have children with special needs or do you want to bet, do you want to lay out those instructions for how your children will be cared for if something were to happen to you? And that’s one of these ideas that one of the challenges of working in this field is because people are faced with their mortality, especially people with young children. Um, you know, like Claudine referenced earlier is people have to make decisions that are often difficult and hard to talk about. Um, so part of being an estate planning attorney is also being a counselor and providing ways to, to lay out that, you know, there is a plan for this and there’s a way we can draft things to really incorporate your wishes. How often do you find with meeting with someone who is interested
Speaker 2 14:52 in that? That they just have a hard time
Speaker 4 14:53 talking about it? It’s it, you know, it’s just across the board. It’s, it’s our mortality is universal. It’s universal. Yeah. Yeah, yeah. I have a seven year old daughter and I, it’s tough for me, you know, but I laid it out years ago cause I’m just like, you know, I don’t want anything up in the air. And it’s also incapacity. Um, you know, we forget that. You know, what if I was in a coma, yeah. You know, who would make sure the bills were paid, the mortgage was paid. Who is to make sure my daughter was able to go to the school. She goes to. I mean, how would we maintain that consistency in her life? And those are decisions that need to be addressed now. Um, and it’s about the living. It’s about the living. And I think that, um, it’s, it’s a challenging, um, it’s challenging to make these decisions, but I think the sooner the better.
Speaker 2 15:40 So what are the comp, uh, you know, we have to remember that the, whoever is listening to their, they’re not attorneys or are we just, um, good at what we do? Whatever product or service that we offer. So if we were to put it in buckets, what are the different buckets of the, of state planning that, that, that de woo who goes, I know you talked about advanced directives. Uh,
Speaker 4 16:02 so there’s a will and basically a will, um, is a document that lays out where you want your at. Like when you pass away, there’s, that’s an interview of his transfer. So what happens is from there you can click create a testamentary trust, which is, um, that’s in effect up until death and then you can create a living trust. So, um, with the living trust, it can be revokable or irrevocable. And those are terms that lay people don’t always understand. So I wanna provide a little clarity to that. So revokable is the most common form because that means that the grantor, the person setting up the trust can maintain control of those assets, can give and take away. Yes, they can make changes to that trust. Um, and those are the most common. Um, so there’s revokable and then there’s irrevocable trust. So with a revokable trust, I like to look at it as a, it’s like a bucket, right? So you can take it, take things out and move things in and out of that bucket, an irrevocable trust is like there’s a lid on that bucket. You put things in it and you seal. That
Speaker 2 17:04 is, that is a trust. I mean, it’s just an instrument is other legal instruments that worked. So the world I come from, it’s, it’s, you know, corporations and LLCs and you know, and partnerships. This is kind of a legal, uh, the equivalent.
Speaker 4 17:21 Yes. Yes. So the I, the idea too with a revokable tresses versus an irrevocable Trek is there’s different motivations for why you would set up an irrevocable trust versus an a revocable trust. So one of the motivations for people setting up an irrevocable trusts is that they want to avoid capital gains taxes. They want to protect assets from nursing homes. That’s a common one. So, um, you know, that’s part, um, you know, part of this is reaching out to your professional. It’s all
Speaker 5 17:50 about having a check in with your tax professional to stay up to date on some of these things to determine in concert. Yeah. Yes. Doc side of things. Yes. To definitely make sure that what’s best for you and your family and your B. It’s a business plan. Um, so that’s very important. Don’t realize that a living trust, um, the, hence the word living is there to function while you’re alive. Um, and unless you’ve been in that situation where say, um, your child, uh, let’s say you have a teenage child who gets in a car accident, well, let’s, let’s, that’s actually not a very good example. Let’s just say, um, it’s your spouse, um, and you are next to at. But there is a process that people have to go through in order to start making medical decisions on their behalf. And that’s an advanced healthcare directive and that’s, yeah, and that process, if you do it ahead of time, is as easy as filling out the document.
Speaker 5 18:43 However, if you haven’t done it ahead of time, let’s say you and your wife are driving down the road and it happened to be in a car accident and, um, she’s incapacitated. Um, the process by which you have to go through to be able to make decisions on her behalf is not always easy. Um, particularly then, then let’s just say it’s, it’s mom or dad and mom or dad. Um, live alone. My mom lives by herself. Um, and if something happens to her, if she gets into a car accident, um, the process that we as children would have to go through in order to be able to make decisions on her behalf, um, without this document being in place ahead of time is very complicated. So a trust is like rules of engagement. Yes, yes. It’s a, it’s a roadmap. It’s a roadmap. It’s a roadmap.
Speaker 5 19:28 It’s a roadmap both for the living and for the surviving. Right. That’s the way I like to look at it. And one of the benefits of the advanced healthcare directive is it’s very specific. It talks about, um, you know, things like end of life. Um, is there co, you know, some of these, like I said, some of these things are hard to talk about, but um, cognitive, does this person have cognitive function? Um, how, what measures are we going to do to keep this person alive? Like what are, what are their wishes? Like, you know, and the, and I have a large family and I think there’s sometimes there’s a lot of cooks in the kitchen and people can be very emotional and one family member would say, well, mom wanted this. And another family member might say, no, well mom wanted this. which is which?
Speaker 5 20:10 But when you have that document that say, actually mom said what she wanted, right. And for, for most people to have that document in place gives them peace that, you know what, once I’m, once I’ve passed away there, I won’t leave behind these squabbles, but between my kids or my grandkids and there’s a piece to that. Yeah. If you’ve ever spoken to somebody who works in the probate industry, whether it’s a probate judge or referee, anything I had, boy probate is just a, just can be a nightmare. Um, and it goes on forever and ever. And would think Theresa’s working with a client now that the probate is now seven years, seven years, seven years, seven millions of dollars and fellas are tied up. Yeah.
Speaker 2 20:52 Hey, so I hear, you know, it’s always fascinated with you. You know, some people live vicariously through the rich and famous and you, you know, A&E and people talk about trust fund babies and all this. So how does all that, like do, is that an, is that a, is that a tool that the rich used to basically, uh, have ownership of other entities? Uh, can you, can you walk us through what, how that looks like?
Speaker 4 21:15 So part of setting up a trust is you can lay out for your beneficiaries guardrails, so to speak, of how your beneficiaries will receive money, especially with children, adult children. Um, and this is one of the reasons I’d say that people need to update their trusts frequently and have a check in, you know, set it on the calendar, you know, every so often, once a year, I think. So once a year is appropriate, what’s going on on our life? Why should we update it? Because you set up a trust when a child’s 10, well, when they’re 25, there’s going to be different things going on in the family. Um, you wanna make sure it back to trust fund babies. You can lay out that they’re gonna receive, um, you know, pay you, they’ll receive, um, distributions at 25 and 35 and 40, and you can lay out the amounts of those distributions.
Speaker 4 21:58 Uh, there’s so many different ways you can structure a trust to protect sometimes the beneficiaries from themselves. Sometimes there might be a child that you know, isn’t very motivated. Maybe they develop a drug or alcohol or a gambling problem or who knows some or just yes. We’re simply entitled. Yeah. So, you know, there’s, that’s why I say, you know, coming up with an estate plan, it’s not a set it and forget it. Like you need to revisit it frequently and see what’s going on with the family. See if your plans now and what you’re, what your needs are now matched. They’re probably not going to match what they were 15 years ago. Um, another, another element is making sure that if you’ve bought and sold properties that, that those properties have been properly placed into the trust.
Speaker 2 22:42 Oh, list. That’s something that we should yeah. Lauren.
Speaker 5 22:44 Yeah. Yeah. It’s, it’s, um, it’s a common problem that, um, we face when people, um, set up a trust is that they don’t do what we call is funding the trust, which is back to Teresa’s analogy of the bucket. We didn’t put anything in the bucket. So as an empty trust, so it’s a, it’s an empty trust. We’ll go through probate. Yeah.
Speaker 2 23:04 Oh, Oh. Properly funded. Trust is the key. So here’s something that I remember. So when you have a property in a trust and you’re trying to refine as said, why do some banker says you need to take it out of the trust and then put it back, what, how does that all that work? The have you heard of
Speaker 5 23:22 I would get a second opinion. If they’re taking you to remove something from a trust because there’s tax implications risk, but there’s a tax, yeah. There’s tax implications for taking something in or out of a trust. If it’s, yeah, I would, yeah. And sometimes you do need to pull it out because the way it’s titled. Yeah. So, um, and, and depending on what we’re doing, um, like for example, you’re getting the loan under your, your individual, your own personal, um, name and credit and so forth. Right? And so the mortgage companies understand that you can, um, transfer title to a trust. It doesn’t trigger an acceleration clause. So that’s important. Um, so, uh, I, uh, my husband and I own our property. We own it in our personal names. When we go to move it into our trust, it technically that transfers the interest and it would trigger the acceleration clause, but it mortgage companies understand that as long as, and my husband and I are the beneficiaries, we’re really not transferring the interest. It’s just the name change. So that doesn’t trigger it. But so sometimes if you’re going to refinance it, you have to refinance it in your personal name when it’s in the trust. It’s not in your personal name. So sometimes that’s the reason. Um, but typically sh Theresa’s correct you, you do need to stop and breathe before you make that move because there can be tax implications.
Speaker 2 24:42 Okay. So there’s a lot more to, to cover. I just have this question. So who is the ideal candidate for a trust?
Speaker 5 24:52 An ideal candidate is anyone that has assets that they want to leave instructions or you don’t have to be married. You can be single. Um, anyone that has assets that they want to make sure that the federal government, the state government doesn’t make decisions for where those assets go. Can you ever be too young to get a trust? 1818.
Speaker 2 25:11 Okay. All right, well there’s a lot more to come. Hopefully this is helpful. You are listening to business and legal talk with Leah Claudina and we’re talking to Teresa Mason who is an expert. As they plan and say two, we’ll be right back.
Speaker 1 25:24
Speaker 6 25:50 Hey, welcome back. You’re listening to business illegal talk with Lee and Claudia and we’re having such a delightful time. If I may say, talking about estate planning in how and why
Speaker 2 26:02 you should be paying attention to us. I think you need to drop everything you’re doing right now. Even if you’re at the supermarket, go to your car, listen to the show and take notes. This is great content. Wow.
Speaker 5 26:13 You know what? And if you do nothing else, ask as many people as you possibly can. If they have ever experienced a probate, if they have ever been through it, whether it be a family member, friend, um, whatever, and, and, and ask them, what was that experience like? Thank you, Claudine. It an experience of some, a loved one going through probate leaves a memory and it’s not a good one. Um, for a property that’s subject to probate administration, for example, a property that’s $2,000 $7,000 of attorney’s fees will reduce the, the value of that property. Then you have executives commissions. So your total fees and commissions would be $14,000 on a $200,000 property. 200,000 that’s, that’s mandatory statutory. Negotiable. There’s no, no negotiate and it’s court ordered. So when you go through the probate at the end of the probate, the court orders, and if you have a house in the central Valley, your, your, your estate is easily worth $200,000. I mean, so just look at minimum. Yeah. Just look at your house
Speaker 2 27:18 in California, I. E. the dirt alone without the house is worth that.
Speaker 5 27:22 Exactly. Exactly. Not to, not to mention bank accounts. I mean it just goes up. Yeah. Bank accounts. So just let that resonate for just a second. If you have an estate that’s worth $200,000 and your estate has to go through a probate because you didn’t take the time to set up a living trust ahead of time, it is a $14,000 bill. So if it’s 400,000 it, you know, you see the, you know the numbers. So a few thousand dollars for putting together a proper estate plan is a drop in the bucket compared to what you would be paying. Your heirs would be pain that they’d be suffering, so to speak while they, and they have to sell everything to pay it. So if a house is worth 200,000, that house is not liquid. Um, so of course in order to, to pay the mandatory probate fees and there are mandatory, that property has to be sold.
Speaker 5 28:16 So if you have a property that you want to leave to your children, or maybe you have a couple of properties, maybe you have a couple of children. I know a number of people in my age category have a few rental houses and they’ve tried to build an, you know, one child. Maybe we’ll get one rental house and another child will get another. Um, you have just, you created exponential costs. If you had three houses and not dimension the state of California, I don’t think it’s likely to reduce any of these fees. They’re going to go the other direction. So time is really of the essence, right, right.
Speaker 2 28:51 So during the break we were talking about celebrities and one in particular. So, uh, going through probate, tell us
Speaker 5 28:59 Prince. So Prince, Prince apparently left Hunter left behind a $300 million net worth. Um, that’s between royalties, properties, bank accounts, et cetera. And he died without a will or an estate plan. It was into state. So that is going through a probate. And you know, I’m not up on TMZ or I’m not up on celebrity news these days, but I did hear that some people came out of the woodwork and suddenly they were related to Prince. So, yeah.
Speaker 2 29:25 Yeah. How does that work? Like if you are in probate, what would walk us through the rec? Hi, there’s a judge or there is, there’s somebody, a trustee or somebody who’s assigned to it.
Speaker 5 29:35 Well, there’s a probate, there’s a probate commissioner and someone’s assigned to the case and they have a huge case and you know, things are scheduled and calendared and there’s five hearings hearings and it’s just, it can go on for years. And, yeah. And so what are the chances of this state settled in the next few years? It’ll, it’ll probably take like a decade. Oh, yeah, yeah. Oh yeah, yeah. At least the number, the assets while this is going on, then it’s just been depleted. And in his situation, you’re going to have record companies fighting. You’re going to have multiple high stakes people in that probate administration. So it’s just going to get the canned, we’ll continue to get kicked down the road. So any legitimate beneficiaries, any of his family members will suffer. Right? Like they might be left with very little, or if he does, then if he’d had an a proper estate plan put together, the thing people don’t realize about probates versus living trusts, probates are made public.
Speaker 5 30:30 So whenever you, um, have a probate opened, you have to start running those public notice ads in the newspaper. And it says, um, you know, uh, anybody who may be a beneficiary of Leo land, a Verde or a creditor or a creditor, please, please show up, um, to the hearing on this date. So I’m summarizing, but you know, essentially we publish it, um, to notify the public. Um, and then anybody who says, Leo owed me $300 from 19, you know, whatever 89 and I have proof of this payment, that payment that was owed to me. Um, then you present that to the court. And so the court goes through all of these things and it gives everybody time to be a creditor and, and come in and stake their claim. Um, that process alone for an estate like princes, that process alone. And unfortunately, we live in a time where bad actors come out of the woodwork, right?
Speaker 5 31:26 Um, claims that are just totally fabricated. We’ll come out and it’s, it’s so disheartening that there’s people out there doing that, but with all the identity theft and just dishonesty out there, unfortunately, that’s yet another reason why it’s important to have an estate plan to protect your beneficiary. Let me redirect the car. So you have this enormous right, uh, sums of money sitting there now in probate and uh, enlist, go to the opposite side. You’ve got somebody who is going to go to legal zoom. Okay, can I, can I get this done for pennies on the dollar? What will you say to someone like that who is trying to get it for next to nothing? You know, the thing about legal zoom is people want to get things done quick. We live, we live in a world where people want instant results and sometimes taking extra time and investment in your estate plan is well worth it.
Speaker 5 32:17 I mean, I have clients that have come to me with something they brought, they came up with legal zoom and they’re like, you know, I wanted to make changes to it and I had to call the one 800 number and they kept bumping me around and I don’t even know if the person was in the United States and they were just so frustrated. So then I look at, I look at the document and I’m like, well, we’re going to need to amend this. Um, but really we need to it because it was, there’s a whole series of things that you thought were in here that are not right. So it’s not, estate planning doesn’t lend itself to a plug and play. Like it really lends itself to conversations about someone’s intent and what their wishes are.
Speaker 2 32:53 You know, I can speak to a, on the accounting side of things. So I had a, um, I met with a potential, you know, I’m talking to business owners all the time, so I was talking to somebody who heard about me and got him on the phone and blah, blah, blah, blah, blah. Uh, Hey, tell me about your legals. You know, th th th your legal entity. Oh, I have a, uh, um, escort. Oh, great. Stop taking notes. So we started engaging in Dan. Um, how long have you been in business? A couple of years. Well, a couple of years as, as, as a sole prop and I incorporated blah, blah, blah. So I’m looking at the timelines. Okay. So I asked him, I need to see, you know, so, okay, I, let’s engage, let’s work on support together. The first thing I do is taxation. I’m always always asking, okay, so you know, I’m looking at the financial statements against the actual legal entity in all the time.
Speaker 2 33:40 And you know, the timetables, right? If you’re a corporation, you must file by March 15th every year. Um, if you, you know, you, you’re um, you know, and then there’s the four 15 deadline. Anyway, long story short, so you’re an escorp. So there was, should have been an 1120 S foreign filed because by default or corporations are C corporations, which is the large corporations which are subject to double taxation unless you elect to be treated as escort, which is a sub or a small corporation. Guess what? They did an illegal zoom. They swore up and down that they had the 1120 S election and they didn’t. So I, year and a half after, nobody caught it. So they have to restate. They actually, you basically had this thing, you have to throw yourself at the mercy of the state and ask for forgiveness. A pardon. So you can actually filed this of chapter as you know, election with the IRS and Dow is just not good. Oh, I know what he feels like because then you have to restate, you have to refile you, there’s just a lot and that’s only, you know, money in, in, in, in, in, not to diminish it, but we was talking about life situations here.
Speaker 5 34:49 Yeah. You don’t want to leave your beneficiaries with a document that’s confusing and doesn’t match up with the intent of the grant whore. So it’s just, yeah, it’s kind of, it’s disheartening. I should say that we have these documents floating around that it’s almost like a time bomb because decades from now they’re actually gonna need to look at this trust and administer it. And how do they do it? You know, I had a case, um, gosh, I, it took us about a year to wrap it up and it was about, I think a two years ago we started with it. It was a property out in Patterson and, um, a family had owned like the entire block where the house was located at one time. And then, you know, members of the family had passed away. The, the one, um, the woman who had passed away how to living trust, the property was in the living trust and there was an issue with the property.
Speaker 5 35:37 Um, the property line, like a building, the garage was halfway on the property line and we were trying to sell the property on behalf of the trust and we, we went into escrow, we find, found a buyer, went into escrow. And then as I recall, the title company came up and realized that there was this issue with the property line in any event. And then they realized that there was a deed that had been skipped back in late 1935 or something. It was, it was a long, long time ago. And, um, what had happened is that the, um, owners originally had an individually, then they moved it into the trust and then they sold it and then it went into another trust. And in any event, we ended up having to go back to a third generations living trust. The family still had it. We were able, we ultimately took us a long time to get it unwound.
Speaker 5 36:29 But because the trust that document in it was clear instructions on who was supposed to own the property in the event of the death. And that’s what happened is we had, there was a missing deed somewhere along the line. And of course this is before computers. Um, but because this document was, um, considered to be an important document by the family, they never threw it away. It was, it was a, just a stroke of luck that we actually were able to have it. But it is, you know, considered a, an important document and that didn’t get in, throw it away. So it’s interesting like our technology has progressed, but legal zoom isn’t progress. And I think people are looking for economy and then years down the road people are going to suffer. It’s black. Back to what you were saying earlier about pain or vitamins, Leo, you know, like do we want, do we want to take our vitamins now or do we want to have pain later and medication later in?
Speaker 5 37:24 Really, um, it’s better to do, spend more time upfront and get things right, get the details in order. Successful people are proactive in my experience. Hey, have a question. So what is the biggest misconception out there that you keep running into about estate planning? I think a lot of people think, Oh well estate planning is for wealthy people. You know, and I think maybe that comes from the idea of trust fund babies or estate planning is for um, you know, billionaires or people that own multiple businesses and it’s like, no estate planning is for everyone. Estate plan is for anyone who wants to have peace about leaving a roadmap for how their beneficiaries will inherit their assets. And also estate planning is about taking care of families in case of incapacity. So I have a question, not just for the rich or the rich, it’s for everyone. Yeah, it really is for everyone. Explain to people who may not know, what if somebody came to you to, for um, to draft a living trust, what components, what would they walk away with? Well, we have, um, you know, based on their situation, are they a single person or are they a couple? We have different forms to fill out and a lot of it is decisions like how do you want things, what are
Speaker 4 38:36 your wishes, who are your beneficiaries, what are your properties and how do you want things structured? Um, and, and just laying out the different decisions and you know, it’s a conversation. It’s like we’re not just going to hand you the forms and send you on your way.
Speaker 2 38:50 I thought, Theresa, I’m going to have to cut you out. We have to go to break. Sorry. So as my producer and raising his hand, so stay tuned. We’ll be right back. I know this is juicy stuff. Stay tuned. Come back.
Speaker 0 38:59
Speaker 2 39:23 Hey, what’s up? Welcome back, man. There is never enough time, uh, just barely getting started and I feel like we now have to start winding it down. So, Hey, how do we find you? I mean, how do we get to you? This is great actionable content.
Speaker 4 39:36 So the Sharon law firm, we have locations both in Modesto and Turlock in Modesto. We’re on Standiford and you can call us. We’re at area code (209) 427-2200. And you know, we’re, we serve the whole entire central Valley, so we’re happy to drive if you need a state planning, um, help in Stockton, Tracy, Fresno, Visalia, you name it.
Speaker 2 39:58 Awesome. And I highly recommend the word that you guys do is so, you know, we team up with a bunch of clients and it’s just just the clients rave about your services. So thank you for you to do so. Um, there clearly there are more benefits to what we talking about that w beyond the scope of work, you know our show today. But if you figure the average person who just walked into your office and got the state planning done, what am I walking away with? Can you, can you kind of walk us through what does that look like? What am I holding in my hand?
Speaker 4 40:27 So we in our estate plan involves a will, a trust that’s a living trust. Um, an advanced healthcare directive and then a power of attorney that’s both for health care. That’s both for medical and for Fernie financial. So w it comes in a beautiful book and it’s all laid out there. It’s all organized. Like your family, your beneficiaries will go to that and there’ll be no questions about where anything is. It’s all there, it’s organized and it’ll just give you a sense of peace. You’ll walk away with all the roadmaps for your beneficiaries. So yeah, I just really believe having it all taken care of in a state plan. It’s just, it’s all about leaving a legacy of peace and it’s for the living. After you have an estate plan set up, there’s a sense of peace that, okay, my affairs are in order and theirs, that’s something so wonderful. But I also want to stress that, you know what, it’s not a one and done. We were about the rate at the Sharon law firm. We’re about our relationship. So you know, we’re all about how we encourage you to check in with us periodically as life changes as you might buy or sell properties. Maybe you invest in, in real estate, maybe
Speaker 5 41:34 children are getting married, maybe there’s grandchildren. Anytime you want to make a change to your estate plan, like stay in touch with us.
Speaker 2 41:41 This is not one and done and walk away. I think you as if anything you do in life, you know, you got to inspect and keep coming back to it. Hey, so here’s a little bit of nice little fact. Um, I was just looking this up. Uh, check this out, that the state tax will raise $225 billion with a B over the next 10 years. This is more than 164 billion, 10 years or four in the highway. Mass transit trust funds. That’s how profitable he can be for the state. If you let things go, probably right.
Speaker 5 42:15 I think if people thought of it as attacks, they would be a lot quicker to overcome the apprehension that you have when you’re thinking about going through that process. I think if you said to yourself, this is attacks, I mean, $200,000 and you’re going to pay $14,000 that’s like, that’s a lot.
Speaker 2 42:35 I know. But check this out. So the wa say, let’s look, let’s go to the other side. What happens when you’re shrewd about how you’re looking at this and, and you’re worried about cost, which we’re gonna talk about in a second, is the Walton family. You know that Sam Walton, you know that only 51% of the shares of Walmart has exploited a loophole in the state tax law to avoid paying $3 billion in state taxes. This could increase by tens of billions in the future. So when it’s done right, I always say, you know what, don’t reinvent the wheel. Look at what successful people have done in every area of their life and just mimic that, emulate what they want to do. And so I’m know people that are thinking, you know, as, as they’re listening to this show as well, how much is this going to send me back? Well I can, you know, I’m going to let you respond to that.
Speaker 5 43:24 So it, it’s a few thousand dollars to come up with a full estate plan, but it is so worth its weight in gold. Not only are you avoiding probate, it’s that piece that you’re going to give your family and successful people plan ahead. And this is just one element of success. Yeah.
Speaker 2 43:40 So what’s the alternative? 14,000 plus, uh, in, uh, the, the regulatory, um, mandated fees, right? Exactly. And onto a hundred thousand
Speaker 5 43:51 or two. Yeah. Or 200,000 in probate. It’s just, it’s rigid. And keep in mind, I think I said this earlier, we might just a reminder, those are mandatory fees. You will liquidate the assets. So if it’s grandma’s diamond ring and you know, whatever, or the house, you know, your childhood home, if, if you have to liquidate the asset in order to pay those fees, that’s what you’ll be doing. You, you don’t get, you either write the check or you liquidate the asset, write the check. But you know, writing the check either way. And also it’s the squabbles between family members. I cannot emphasize enough that grandma’s ring isn’t just grandma’s ring, uh, where attachment to render attachment it. And that’s
Speaker 4 44:32 why these probates drag on and on is because there’s these unnecessarily filings and delays cause people have emotional attachments to stuff and it’s like, you know what the grand tour while you’re living, lay that out. Who’s going to get what and when and what you could even put why they’re going to get it.
Speaker 5 44:47 Yeah. And this is um, this is relative to business owners who may be, have a corporation and have shares, um, and want to transfer business. Exactly. Yup. We’ve talked about buy, sell agreements and, and making arrangements for your exit plan. This is a piece of that as well and very well can be depending on who your beneficiaries and you know, if maybe your son or daughter is planning to take over your business and, and so forth. These, this is a, that’s another piece of the business exit plan.
Speaker 4 45:16 You know, I am a former um, nine Oh two and old junkie and Luke Perry unfortunately passed away this last year, but you know, and he’d left. He had an estate plan, it was all laid out cause people were starting GoFund people want to start, go fund me. Used to raise money for his daughter. And it’s like, no, his family released a statement saying, you know, there’s no need for any sort of a go fund. Me Luke laid everything out in a carefully crafted a state plan really. And I was like, Oh, I love Dylan. Anyway, I digress. But he was, I wanna say 50. I think he died. Yeah, he’s on. Yeah. But um, he, he, he planned ahead though, you know, and
Speaker 5 45:56 20 you haven’t heard any word about a squabbling none family carefully crafted. Taken care of peace. Peace for his heirs. Yeah. Yeah. And he left a what, eight young kids, right?
Speaker 4 46:11 A few children. He left behind a sizable estate though. He was on television for a few decades. I mean, he was on television 900 to do the Royals. Yeah.
Speaker 5 46:21 See, and that’s the thing is his estate will continue to generate funds even though he’s passed away. So if you had nothing, if he had nothing, then then it would be an an additional complication going through the probate process because now we have to make a decision. What are we going to do with the future income that’s coming. It’s not just what we have sitting in our lap today. There’s income coming down down the Pikes.
Speaker 4 46:43 So what else will you, you know, what else do you think we need to talk about that we haven’t covered on the show today that you want listeners to pay attention to? I really want, I really want listeners to know that, you know, here at the Sharon law firm, when we put together an estate plan, we’re all about personal service and really tailoring and estate plan to your family’s needs and the legacy you want to leave behind. So I think for us it’s about a relationship. It’s not, these aren’t just documents to us, this is about leaving a legacy and we take pride in that. So I think that’s what I’d like the listeners to understand.
Speaker 5 47:16 And I’m going to just pitch in on that. One of the things that Teresa, the reason why Teresa is so good in my way, what I did want her to come on the show and talk to people about this because one, we’re passionate about it. We, we are passionate about being proactive. You and I’ve, you know, crafted the show
Speaker 3 47:30 around it. Yup. Um, Theresa has that personality. Um, that is, she, I think she said in the very beginning, um, there’s a little bit of counseling that happens in here and not everybody is cut out to, to hold hands with a client that figuratively of course, and walk through this. It can be difficult. There’s going to be a little painstaking and not every personality is. And I, and I really want to just kinda throw a shout out to Theresa for being that kind soul that a gentle person who is really very, very empathetic and, and is really good at helping people walk through this process. Oh, thanks. Technical aspect. And that’s also the empathetic, you know, so I think you balanced both. Well, I will not be able to do it. I don’t, I lack the, um, it just wired differently. But I appreciate, I hear the work that you’re doing. So thank you for, um, you know, illuminating as with with the knowledge that you have. So aside from being a great, um, you know, aside from watching nine Oh two one Oh one what,
Speaker 4 48:30 how else do you take your, when you want to take your mind off things. So, so what, Oh, I hike, I hike. I garden. The central Valley’s great for gardening. I got a huge tomato crop going on, right? Yeah, yeah, yeah. Fruit trees. Yeah. No, I brought in some peaches this morning. Yeah. Years. Yeah. Yeah.
Speaker 3 48:50 Oh, tomatoes, tomato. Aren’t you into gardening too? No, I hate gardening unit. The horses I am into horses. I would rather go to the farmer’s market and buy the tomatoes. I love them. I used to grow them, but then I just came to a decision one day that I said to myself, let’s just be honest. I just don’t like doing this. I just don’t like those
Speaker 4 49:12 I do. I do enjoy it. Yeah. So you must have a lot of patience to watch watching things grow, right? Yeah. So you have it in your backyard? Yeah, I have some plant, some raised beds back there. Yeah,
Speaker 3 49:24 I have the opposite of a green thumb. What would that be? A black thumb. I kill everything. You know? I just, I just, I don’t even, I don’t even like, I mean I’ll mow the yards, but that’s, that’s the extent of my landscaping and gardening.
Speaker 4 49:38 It’s always an experiment though, right? Like some varieties are doing well and some of them, there’s just like no blossoms. I’m like, I dunno what’s going on there. So it’s just a work in progress covered that. You enjoy that. So do you just that nothing to do when just walk through the yard? I should do something with this yard. You know, I was into at different points in my life when I had an apartment, I would have little pots where I would try to grow things like herbs and little Bazell and just different herbs for cooking. And then I’m like, okay, then, but then when you can put in a full bed, it’s like the possibilities are endless. Yeah. That’s awesome. That’s a little bit of an escape too. It’s like the seed and just, Oh, you just buy him little or, no, I did do some of the seeds that you start in like March. Um, but I’ve had more success with, to be honest, like the Lowe’s and home Depot. Little six inch pot. A six inch pot. Yeah, the, the actual seeds. But I do both. I do both. I’m always like kinda cheering on
Speaker 2 50:27 those new hot, come on, you can do it and you hike and I hike. Yeah. Wow man. You know, I have to go to the gym and just to X, just, just, it’s all about cardio now. You know, I think and there’s nothing better for cardio than hiking. I mean, you know those include, yeah, those Hills. Have you ever, uh, do you go around here or do you go to one of the big mountains? The peaks? I like to go to the foothills kind of like up by Sonora up foot Hills that Yosemite? Yeah. Wow. Have dumb coming your way. Oh no, I haven’t done half dome. My dad did that. I’m like, no, I haven’t. I haven’t done half dome. How, how long does it take to get up there? Oh, I, it’s like a day. Yeah. It’s a track. It’s like you start in the morning and get back at dark, so it’s a, it’s a feat if you are able to do it.
Speaker 2 51:15 Oh, no, no, no, no, no. It’s a feat. You, you don’t just wake up and think I’m going to hike half. There’s like, it’s hardcore. There’s like a risk. Yeah. Yeah. You fall off that too. Yeah. It, there’s a point where you actually are literally on the rock and there’s this thing that gets you in. Anyway, we’re digressing. Well, thank you so much, Theresa, for being on the show and another great show and a, again, where do we find you? It’s just this wrap it up with, you know, how do we get to Teresa? This Sharon law firm. We’re in Modesto and Turlock and we travel throughout the central Valley. You can reach us at area code (209) 427-2200 great. Well, you know how to reach us to a Greenland www dot Greenland as the country of Greenland HQ for headquarters. And it’s been a great having your thing, GLAAD, the show. Yeah. have a great weekend everybody. We’ll talk to you next week. Thank you.
Speaker 0 52:08 Bye. .