Brownies & Coffee Mugs to explain Wills/Trust in under 10 Min!

Whether one passes away (a) without a will, (b) with a will, or (c) with a trust, impacts the survivors quite differently. Even if you may get to the same end result, the time & potential cost can be dramatically different. Let's use our morning coffee and a sweet treat to explain the difference between the different options.

July 07, 2023

Transcript

 11th, 2023. I'm coming to you live with my morning brownie and my coffee. Yes, breakfast of champions. I don't actually plan to eat this brownie yet for breakfast, but I promise there's a story,  coming, which you know me, you know, there's always going to be a story coming. 7 Eleven, fun day. I don't know if you have a 7 Eleven near you.

I don't know if they still do this, but there was a free Slurpee thing that happened on July 11th. And, I'm not one to pass up a free anything. And it's been a year since I've had Slurpees, but I don't know. It's like, you know, 95 degrees ish every day these days. Maybe a Slurpee's not such a bad idea.

Shifting gears a little bit. So being in the industry that I'm in,  this is what, 23 years, I think now as an estate planning attorney doing wills, doing trusts, unfortunately, what happens over the years is people do pass away and what I'm just completely flabbergasted by, because sometimes we get a skewed perception when we do something all our lives, we don't necessarily understand that everybody doesn't necessarily have a grasp on everything that we do.

So one of the things that I think I've taken for granted over years is how people don't always understand the difference between wills, trusts, and how things get passed down from one generation to the next. So here's basically the three fundamental things that I think people need to know about how somebody passes away,  not how it's, how assets are transferred down when somebody passes away.

So I'm going to break it down into three categories. Somebody who passes away without a will. Somebody who passes away with a will, and then somebody who's done some advanced planning like possibly a trust, okay? And we're going to do this all in a few minutes. So, thinking about my brownie, let's think about the end result being a brownie.

So the end result being, look, I want to make sure the stuff that I have gets its way to the right people. It might be my kids, it might be a charity, it might be my spouse, it might be other people in my life. I want to make sure the stuff that I have makes its way to the other people in my life. Okay, that is our brownie.

The brownie is the end result. This is how we want to make sure that things get their way to the next person. So, option number one is I do nothing. And if I do nothing, and I have things like checking accounts, savings accounts, brokerage accounts, a home, maybe a second home, a business interest, there are rules.

There is a recipe out there that the government gives you. There are laws. And the laws are basically like a recipe book. And the recipe book is basically, hang on one second, and the recipe book is basically something that basically says, look, there is a bunch of different things that can go, can be done.

You can actually do it this way, you could do it that way, you could do it that way, but if you're in this situation, do it that way. These are the laws. This recipe book is, are the laws, and the laws of probate. And the surrogates court are going to dictate who gets what and how you actually go through it.

So that's one option. You pass away without a will. You pass away without a trust. You pass away without any planning. You have basically said, Hey, family, executor, not executor, administrator. When I'm no longer here, go look at the recipe book. Go look at all the laws here. And figure out the stuff that I have, and if you figure out the stuff that I have, I want you to figure out who should get it and how they're going to get it, okay?

Passing away without a will is called dying intestate, and intestate means you go to the laws, you go to the recipe book. Now, what if you said, I don't want somebody to go to the recipe book and figure out what should be done, I'd like to leave behind a specific recipe. And that specific recipe is going to dictate who's going to get what I get and how they're going to get it.

A will. A will is a recipe. And a will is a recipe that says, Look, this is the exact brownie I want you to make. Follow this recipe. If you follow this recipe to a T, you will actually get what I want you to get. Alright? So, that basically is what a will is. You pass away with a will. Somebody is going to take this will to the surrogate's court in your county.

And basically say, Hey, court, take a look at this. Does this meet the requirements of a will? If it does, why don't you name me, whoever you've appointed, as an executor. And I am now going to execute on these wishes. This then becomes a document that usually is circulated among your next of kin, even if they're not named in the will.

If there are spouses, if there are children, if there are maybe stepchildren, depending on what your state laws are, it may be distributed to people. And this is going to dictate what happens to things like your checking account, your savings account, things like your brokerage accounts, if there's a retire, if there's a beneficiary designation.

The will's not going to dictate what happens to that. If there's life insurance, annuities, 401ks, IRAs, things where there's beneficiary designations, the will may not dictate that.  Unless you named your estate as a beneficiary, and I don't recommend doing that. That's, why would you do that? Don't do that.

 And that might be a topic for another video. So, what did we talk about so far? We got all these laws, which is the recipe book, and then we got the actual recipe. In both instances, what you're saying is, look, when I'm no longer here, somebody else do the work. I want somebody else to do the running around and actually go through the entire probate process, whether it's intestate, if I died without a will, or whether it's, testating, or whether it's with the will, which is actually going through the entire probate process.

The person who does the work in a non, will or an intestate case is called an administrator. The person who does the work with, when there is a will, is called an executor. So really high level. Now, how long does that whole probates process take? It depends. It depends on how long,  how many, how complicated your assets are.

It depends on the state in which you're in. It depends on whether or not it's disputed. And this is generally when disputes start happening, when there's going to be a probate dispute. Now, what if your idea is, look, I don't want somebody to do more work after I passed away. And I don't want them to have to rely on the laws.

And I'd rather decide what's going to happen. Also, I want this to be private. I'm not looking for copies of my wills to be circulated among all of my next of kin. And I'd rather not they deal with all the various institutions. Let me do the work now. Hello gorgeous. So you're seeing this mug right now.

This mug right now says hello gorgeous because I just thought it'd be fun to use for this video. So this mug represents one way that you can do more work today and therefore leave less work for the next step later. So imagine taking something like this and making your brownie today. You are actually doing the work today.

So you will put your checking account, your savings account, your brokerage account in here. You will put your home in here, you'll put your, you may make this the beneficiary of certain accounts like your life insurance and your checking, I'm sorry, and your brokerage accounts and your retirement accounts.

But it's open. So doing this today basically means, look, if I want a piece of my brownie, I can take a piece of my brownie during my lifetime. I can add more brownies if I want to. I can add ice cream on here and chocolate syrup and there's a really good chance I'm eating this right after this video is over.

But this is essentially... Doing more work today, having it all in one vehicle so that I can access it during my lifetime. If I become disabled, I'm going to decide who's going to manage it on my behalf. And when I've passed away, rather than somebody dealing with all of these sort of things, it's all aggregated in one place.

This will now just pour into a vehicle for my kids. Split it up. It can go for my charities. It can continue to go, it can continue to stay in here, asset protected. This is a trust because it's open up here, it's a re vocable trust. It can be modified. It can change. It can be revoked at any time. This is an example of doing more work today.

You create more to you create this today. You actually put your stuff in here today. It's revocable. In this instance, you could take things out. There are irrevocable trust that we have another video on that. If you go to our YouTube channel, you can actually see where that irrevocable trust video is. But this revocable trust allows people to put things in, take things out.

But when you pass away, There is no public display. You don't know whether I've got five brownies in here or whether I've got, you know, lucky charms in here. You don't know what I have in here. So this is basically going to be a way to do more work now so that there's less work for people to do later.

You avoid the probate process. Is this right for everybody? It's a solid maybe right? You can't, you can't ask an attorney a question and get anything other than a solid maybe right? Or it depends, but it's worth having the conversation. Do you want to do more work today? So there's less work for people later again.

I know it's not one of the most pleasant topics, but hey, it's important. And if we don't bring it up, I don't know if you're having a conversation. So I hope this is helpful. I hope you're safe and warm. There's a chance that we might be taking a few weeks off coming up on Shah Plan-it, or we might actually have some some content out there from it.

remote locations. Okay. So kind of leave the mystery there. So you'll just have to keep checking back here and look for posts for it too. But either way, I hope you're finding this summer safe, enjoyable. I hope you're cool. I hope you're staying dry. We've had some weird weather in the Northeast and I look forward to seeing you back soon on Shah Plan-it.

Bye everybody.