Estate Planning Essentials: From Wills to International Properties #423

Culturally , I think that it comes from a faith-based perspective . There's life and death in the power of your tongue . But if we're talking about a faith-based perspective , we also know that Proverbs says that a wise man plans for his children's children . We know that God takes legacy seriously . If I was a Bible scholar , I'd rattle off a few more verses .

So you know , I always ask lawyers like are you supposed to say like Esquire at the end , or Siobhan Perry like attorney at law , or I think it depends on the setting .

If I'm teaching , they call me Attorney Perry , and when I'm in the academia they call me Dean Perry . So it just kind of depends .

Well , let's jump right into this because , listen , there's a lot of folks who are listening to this show and they're like look , I'm first generation X , y and Z and I got a bunch of student loans and I'm about to be making some money six figures and now people talking to me about estate planning and how I'm going to bequeath my money to somebody and I just

got money . Why I got to worry about that ? Why is that important ? So let's start off with what is estate planning ? Siobhan , Please tell us what that is .

You also want to make sure that the person you want is legally empowered to make those health care decisions for you . Right , we don't . If you got a divorce but your ex-wife is still your power of attorney or your health care power of attorney , and you didn't change that , then , baby , that's who's making your healthcare decisions for you ?

You have legally empowered somebody to make decisions about your health , especially in the event if you cannot articulate those decisions or advocate for yourself , and if it is valid , and that person produces the healthcare power of attorney . Now we have a layered situation that otherwise could have been avoided with comprehensive planning Right .

And again , in the event that you are not able to manage your business , your business fulfill contract , contractual obligations , orders I don't know what kind of business people do Manage your bank accounts , pay your mortgage , negotiate with credit card companies for forbearance or additional time .

If you are in a situation where you cannot do those things for yourself , who is legally appointed to manage your affairs for you until you get better , or until you get back into the country , or whatever your specific circumstance is ? So estate plans protect your health .

They protect your wealth and then , last but not least , comprehensive estate plan protects the people that you love the most and the things that you've worked so hard to acquire . And then that's where that piece comes in . Who takes care of your children if something happens to you ? Right , how do they access that money if something happens to you ?

And who gets what after you die ? Because just because you don't create a plan does not mean there is no plan . Right , there's a plan , but it's in somebody's head there's a ground , monty .

So some of those rules , for example , in some states may be if a husband and wife , if one of the spouses passes away with no children , then the surviving spouse has to share assets with the deceased spouse's parents , right ? That may not be the plan . Say that again . Say that again , depending .

I'm just giving you an example of the state I think it's California , don't hold me to it and other states may be like this , meaning .

The state doesn't probate your assets for free . They may take a percentage of it , filing fees , and then , after you've tried to do it on your own for a year or two , then you call somebody like me and I tell you baby , we don't do that for free , okay , Right , Right , Wait .

A story that I share often is and I have her permission is I received a call from a lady whose sister passed away and the sister passed away leaving three children behind . But the sister was a homeowner . So there's the pro . But of course , in the middle of everything , some people don't even know that you have to do stuff when somebody dies .

She didn't do that right . She has her own children , her own family . She has three more children . So who's paying deceased sister's mortgage during that ?

Imagine what that 150 , 200K equity , whatever it was , could the difference that could have made in the lives of the children who lost their mom and that's generated that's definitely sobering Lost forever .

Like how often are you seeing people actually kind of come to you thinking about these things ? Like why do people come to you thinking about these things Like what ? Why do people come to you to talk about estate planning ? Like what , what's the trigger ?

. So there was a time where I used to post about it a whole lot , right , and somebody would would see my video or see somebody else's video , because we also have a lot of and I I mean this respectfully or disrespectfully , I don't know we also have a lot . Let's do it with disrespect .

Yeah , let's do it with a lot of and I mean this respectfully or disrespectfully , I don't know we also have a lot of .

But these are the but , in a sense , you know , thank you , thank you internet gurus , because you've at least sparked the conversation and these people are seeking some counseling or some direction , and so that sparks it .

What also really sparks it is somebody who has been responsible for the probate or wrapping up the matters of somebody they loved who's passed away , and that person didn't have a plan and they went through the stress of court . They went through the years of the probate process .

They went through their family bickering , because sometimes , when people pass away , they're people who never speak to each other again and they are just determined to not they'll never happen to them that legacy for their children ? Um , yeah , yeah .

You know they're living either in nursing homes or they're living in assisted living or they're at home and you know the granny falls , breaks the hip or has a serious head injury and there's no , you know , poa right .

general what I can do and what I can bring up and stuff . So so you know that stuff . After a while I got to the point where I was like let me ask my parents , like do you have one Right ? Yes , and they used to always say we have a will , we have a will yes . Yeah , and then finally , I was like you know what I'm taking over ?

And we got an estate plan . And actually we got we . We were primed first by Renee . Renee did it for her family and I was like you know what . We need to do that also because I've seen some bad arguments Right Like .

And here comes estranged spouse saying I'm making a decision and X , y and Z , and they probably screwed me over about X , y and Z . So we doing this , yeah , or that's mine , that's mine . It's bad you know , or you know with granny , have wanted a trach and nobody wants to make a decision .

But then you find out like there's some secondary gain to those things Right , Like it is a very scary thing to not have that piece of paper as a medical practitioner for certain types of patients . So that's why I was like I got to get it done and it wasn't painful .

It was like it took like I think about a good five to six months once we got everything kind of taken in , like I think about a good five to six months once we got everything kind of taken in . So my next question for you , then is how soon should you start this ?

So for someone who's just finishing residency , they have no kids , but they got a ton of student loan debt .

you love . And for the exact reasons that you brought up , something can happen to someone at any time and although they may have a lot of debt right , they still may have some money in the bank . Who gets it ? Who gets access to it ? They still may have an apartment . Who can go into your apartment and clean it out , right , maybe ?

If you are the type of person who is going to want your pasta and your brothers and sisters praying and candles in the room all the time and then the person in charge is like no visitors , nobody come in , keep it quiet . That may impede your progress because that is not the type of healing and restoration that you would have wanted .

Conversely , if you are a very private person and the person's in charge is taking pictures of you and posting on Instagram , posting on Instagram tubes and stuff and say pray . You know pray for my brother or sister and you know they doing starting a GoFundMe . Right , they doing TikTok .

No , but if mom or dad have a POA , they can Right . So they are 18 . They're an adult , right .

You may not know about it and boyfriend or girlfriend is somewhere making all these decisions about your child .

Anything can happen to anybody at any time and you want to make sure the people who you trust , are empowered to look out for your best interest in the event that something happens . Now , this is a very personal decision because you are giving somebody a lot of power . Depending on the POA , it could be a limited one .

Just because something happens to you does not mean it's permanent . It could just be temporary . And if you have that medical emergency and you have a strained relationship with your mama , and after the medical emergency , because nobody was paying your rent or your credit card bills , you were evicted from your apartment .

Your credit score , tanked and now you on your mama's couch . How is that going to help you get better ? Because you already have a strained relationship with this , this person now you're recovering on their couch with jacked up credit and no place to go because , no one's talking about that .

But let me ask you if you have children and let's say , unfortunately , both parents die there's no estate planning in place . There's no person debt Right , there's no dedicated person to take this child , and maybe parents on both sides have siblings , and now there is a fight over . Well , no , my brother would have wanted me to have the kids . Or no .

My sister would have wanted me to have the kids Like what happens to the children . Do they truly like ? Because there's a thought of will they go to foster care ?

But the document that you need for this is guardianship nominations , where you nominate guardians for your children , and this can be done as a separate document or in your will or in your trust plan , directing the state as to who should take care of your children , then the state assumes responsibility until that is sorted out .

So we might have auntie or uncle or whoever who's present , but typically in general , the state still has to check out this person , these people but where do your children go ? In between . Right , they have to do background checks . A judge may have to legally appoint them and that could be a quick process .

Depending on where you live , or if you live in a very congested area , that could be a long process . So not only are your children enduring the stress and overwhelm of losing one or two parents . Now they in foster care or in somebody's house , left vulnerable .

And while there are many amazing , dedicated and committed foster parents , we know that's not the case for everybody , because I see the TikToks and videos of people talking about what happened when they were in somebody's foster care and so yes we can have husband , sister and wife sister arguing about who's going to take the kids .

but you could have the exact opposite you could have nobody arguing about who can take the kids . We could have sister whose sister's sister , whose husband now has cancer and she's overwhelmed . She's like I . Just I don't even have the mental bandwidth to do that anyway .

And we could have a brother's husband who now has a run-in with the law and is not even eligible anymore . And so now , we have nobody to take the kids , people who you think may step up and take your kids , may not actually step up and take your kids . So , that's why you need to have those conversations as well .

Or they could just have a life circumstance Sister may get the kids and everything may be fine , and then sister could pass away . Sister's husband may be like no , sister could pass away . Sister's husband may be like no , thank you . Or you may not want that , you may not right , you may not want them , you .

They may be okay if your sister's alive , but if sister's husband dies , you might say no , we need to move on to number two yeah , look at me is stressed right now . Yeah , you got a license in jersey I don't , but I I I do have a referral I can send your way .

Right , because for me , that's my most important , you know , asset , if you will , or the people in my life , you know , and I want to make sure that my children are . And liability , yeah , well , I want to make sure that my children are well taken care of and , if I can , keep them and liability .

But two , when you said you're going to start with guardianship nominations , I encourage you to go ahead and start the plan for yourself and include the guardianship nominations , because , as parents , yes , we want to protect everybody , but I compare it to being on the plane Put the oxygen mask on yourself .

So you want to make sure that you do that and to answer your question about young adults and leaving for young adults and taxes and all of that , I think that if you have younger adult children , trust planning is a better option than just doing a will , because a trust allows you to do what I call put strings on your money .

Right , in short , you may do other things , but a will cannot say I'm going to give my children $5,000 when they turn 18 , and then another $5,000 when they turn 25 , and then the rest when they turn 30 . Right , because a will just does a distribution . A will cannot hold the money .

A trust can do that , but a will cannot do that . A will can also put limitations on how you can access the money . If you're struggling with substance abuse , if you have a criminal record , then a trustee has to manage the money for you until you've been clean for two years or five years .

Asset protection , depending on what kind of trust you have or what kind of legal terminology that you kind of weave in there . So , for example , people who are in litigious fields doctors , lawyers , right yeah that's what I was going to mention to you .

So , because they know you might , you're in a litigious field and we don't want creditors potentially accessing what we leave behind . We're going to say that these assets cannot be used , in the event that you get a divorce , to pay any creditors for bankruptcy . So a trust allows you to put more instructions on what you leave behind .

The other benefit of a trust is , in general , if the trust is done properly and the assets are owned by the trust , it avoids the probate process . Right , the will does not avoid the probate process .

The trustee has access to make decisions over what is in the trust immediately the land , the homes , the assets , the bank accounts because it's owned by the trust . It's not owned by the person who passed away . So , in short , those are some of the differences between a will and a trust .

So , doctors , you mentioned that trusts in essence protect from creditors .

The parents created the trust and it was the parents asset that they put the asset protection on , Because if it's your asset , a judge can simply say well , take it out , take it out and pay them in general .

So the kind of trust , the kind of trust that you are potentially talking about , is an irrevocable trust and those offer some more features asset protection features and they offer a little more protection , but that trust is irrevocable . So once it's created , it cannot be changed .

And now , in general , you have a third-party trustee managing your assets on your behalf and while I'm a strong proponent of durable power of attorneys , I'm not necessarily a strong proponent of somebody managing my assets while I'm fine and well , and now I can't change it . So I think it just kind of depends .

If we are making in the excess of $12 to $15 million a year , then we need to consider the irrevocable option because they can be pricey to maintain because you're now you're paying professionals to manage that Right Um , that's not just you managing it as it as compared to the revocable trust .

But the revocable trust still has benefits because you can put those asset protection features on what you leave for your children .

But I will tell you about a conversation that I had with my parents . People will avoid talking about this , right I'll tell you about a conversation that I had with my parents before we went in and did their estate planning and the discussion was look , I think you guys need to do estate planning . Well , I don't think we need to do that .

I said , well , what are you going to do ? Do estate planning ? Well , I don't think we need to do that . I said , well , what are you going to do ? Let's talk about your house . Right , your house is your biggest asset . What are you going to do with the house ? Well , you know you kids will .

I stopped my mother right there and I was like I'm not fighting with my siblings and y'all all get along . Yes , All of us get along right .

I guess they call that like the Medicaid or Medicare .

I have to be a millionaire first , I have to have my investment properties or whatever first and then I'll plan . But really it's just the opposite and it's actually easier to do the plan first , because then you can start start buying assets with your trust , as opposed to trying to retitle things later .

But culturally I think that it comes from a faith-based perspective , that you know what you say will be , and there's power . There's life and death and the power of your tongue . So talking about the tongue means something negative . But if we're talking about a faith-based perspective , we also know that Proverbs says that a wise man plans for his children's children .

Right , there are many verses that say make a plan , write it down . We know that God takes legacy seriously . He blesses generations upon generations . So he is a firm believer in planning for your legacy and taking care of your own and securing your own . If I was a Bible scholar , I'd rattle off a few more verses , because there are .

It's just a Black folk issue period , but they don't want to talk about it . But one of my suggestions is talking to whoever the elderly person is , or person who you would like to get in the state plan and saying mom , if there's a medical emergency , who do you want to make the decisions for your care ?

Right , and they may not want to pick somebody because they may not want to hurt somebody's feelings or they may feel very firmly about it Right . The other reason segue as to why I'm also a proponent for doing your estate plan younger and when you're , of course , of sound mind and able body , is because when you're not a sound mind , we can't do it Right .

I get people who call me because somebody's right . Yeah , that's a good point .

They don't have what we would call testamentary capacity , so they cannot do a plan to do it or ready to do it at that moment , because they want me to do everything and all my clients to do bed right planning , which is going to cost extra , because now I'm telling people who are in line right you have to wait and in fact , I I'm really staring away from

them . Those are the most complicated and I want to make sure .

What about life insurance ? I'm sure that plays a part in all of this . Like , do you have ? Is there , like , the best type of life insurance to have in these type of situations ? Because , you know , I don't know if you know , but doctors , particularly the younger doctors , they get what's the word I want to use Bombarded .

They get bombarded with a lot of whole life policy .

I know , obviously this is edutainment and it all depends and so forth , but in these type of situations , I know , with the elderly , you know you'll see , they oftentimes have the insurance that they see on TV , right ? Yeah , right so like talk to us about that .

Like if , when someone is thinking about estate planning , what type of insurance should they be thinking that they need to have by the time they pass away ? Like when in our type of situation .

My , so we know that whole life is a policy that , typically , when you get it uh , depending on the company uh , it builds cash value , um , and it's a type of life insurance policy that , uh , it's , the premium is set to the age , that of whenever you purchased it .

So if you purchased it younger , it's better , whereas when you get older , sometimes it's more expensive and for older individuals , it's pretty much impossible at that point .

So , and it's also a gift to them when they be , when they become of age you've been paying it for so long that the deductible is next to nothing by the time they're old . And it's now again .

That's generational wealth , because the hope is they survived me and now I've left them with even a $25,000 , $30,000 , $50,000 policy , whatever that , when they pass away , can provide for their children , the lost income .

Now we know that the term policies are policies that you get for a term , so it could be a 10-year term , a 15-year term , a 20-year term , and that's fine . That's fine and dandy , they're more affordable . It's definitely better than nothing . But what happens after that term expires ?

Then you need to get another term , and 10 years have passed , term expires , then you need to get another term , and 10 years have passed , 15 years have passed , health conditions have taken place , and so it may be more complicated . So I'm not a person who's going to say you have to get whole or you have to get term .

I think it's very important to have something .

There are some people who may not necessarily need life insurance If you don't have any children , if you don't have , you know , a spouse , if you're you know rich auntie or uncle somewhere and you have enough cash to to bury you , to pay for your probate costs and to leave to your nieces and nephews , then you may not necessarily need Need that extra month your

self-insurance .

so that your family is not left hanging or in financial constraints .

Because now what happens is now I own a practice or a business with my partner's husband or wife . Do I ?

So you're like I'm not even thinking about this . But so what I'm saying is that person in their fifties could be working on their estate planning , right ? Once they start doing that , do they have to , that estate planning has to incorporate with you also , or like , do they have to pay for you to get covered ? Oh , I get confused about that .

That needs to be included in your business planning and then also indicated in your estate plan . What's going to happen ? Because if you don't have anything in your business planning and then also indicated in your estate plan , what's going to happen ?

Because if you don't have anything in your business planning now , you've got the surviving business owner potentially in a legal battle over who owns what you've left ?

behind , left behind , because if you own 50 of the business and there is nothing explaining and on the business and what happens to that business , whoever was to inherit your interest now owns 50 of that business . You know , once they go through , whatever that process is .

So I would say , have it very clear in your business documentation and then also have it very clear in your estate planning documentation , and in many instances that will require the collaboration of whoever your business attorney is and your estate planning attorney , and in some instances that could be the same person . It just depends on what their expertise is .

When you do your estate plan here , you plan for your property in uh ghana what is it ? In accra ? I don't know where it is , but you plan yeah , it's in accra . You plan for your property in West Africa .

You include it in your will here into who should get it , who should manage it , who should distribute it and again your power of attorneys , again , if something happens to you . The laws there are different , because here I can't speak to Ghana , but I can speak to my experience in Liberia .

Here a power of attorney is not effective once you pass away , once the person has died . Now we're going to what the will said or the trust said Over there . The power of attorney still gave me leverage even after the person has passed away .

Having that power of attorney because it's like , well , if they wanted you to make the decision when they were alive , then they probably still want you to make the decision when you passed away . So it's very nuanced .

I can't speak to exactly what's happening in Ghana , but I would say include your plan for it here and then , when you have the time , opportunity and emotional bandwidth , when you go there , just have a will drawn up there to protect your property and the assets that you have there , because , again , you've spent all this time and energy to build what I'm sure is

a beautiful home , and I can't wait to visit it . So let me know you did that for your family , you did that for a reason , you did that to retire there or whatever the case may be , and so you want to make sure that that , too , is also protected and compliant with the laws in that country .

Talk to two or three attorneys and to your earlier point , it's better to do it sooner than later because the legal profession is in a state of transition , in my opinion right . We have legal desert communities and they're growing and they're only getting worse . Meaning there's only like one attorney per thousand residents .

So it's getting harder to find an attorney to . And then a lot of attorneys are practicing in specific practice areas personal injury or litigation or people who just don't want to deal with it . They have checked out because they did their five , 10 years and they like , they're like I'm over it .

So I say that to say you don't know what the legal community , what your local legal landscape , may look like , just because now you're ready to create a plan . So I would encourage you to meet with two or three attorneys who are licensing your state estate planning attorneys . A lot of us operate virtually until it's time to sign your documents .

So it's okay to talk to someone in a further location than you within your state , because you'll just go see them at the very last day , so you can make a trip of it . Talk to two or three attorneys . Talk to them about your specific needs , because it's not a one plan fits all approach . Your plan should be custom and it should be unique to you .

So if you have a blended family , there should be specific considerations with respect to a blended family .

You may want an attorney who looks like you , or you may want an attorney who's the same gender as you , or you may want an attorney who has cultural competencies that are similar to yours , whether they are of that culture or not , or none of that might matter , it might just be who's the cheapest .

Whatever the point is , talk to a couple of them and get a good sense of who you think is going to be the person who you will work with , who you will feel comfortable with and who you can hold them accountable . If it's taken like more than six months , yeah . Yeah .

You know , there is something that is a plan . But if nobody knows that there is even a plan to even look for one , like how is that happening ?

Your local courthouse Most local courthouses will file your will . They will file your . Don't file your trust , that's a private document , but they'll file your will or they'll file your power of attorneys . Your health insurance will keep a copy of your living will or your healthcare power of attorney .

You know , depending on what you have , so that or so that it's on file . So it's on file and it depends because you know if you're going to have a procedure .

also . What was interesting is from my parents .

They gave us a section at the end of the binder to put in like logins and passwords , you know bank accounts and stuff , so that , like you said , if there's an emergency and you know , the POA is making decisions for them , but there's also a way that they can easily log into accounts and pay the mortgage or pay the electric bill and things like that , so

things that you just don't think about . You think about everything high level , but you don't think about like the low hanging fruit , the details like who's paying the mortgage .