Ep. 31 - Establishing Control: The Power of Estate Planning

 Welcome to our enlightening conversation with Wendy Strayer, client services coordinator at Mannor Law Group. Wendy's expertise in estate planning helps us unravel the often misunderstood world of trusts and the peace of mind they can offer. She emphasizes that estate planning isn't reserved for the ultra-wealthy—it's a must for everyone, regardless of financial stature. 

Wendy keenly explains how establishing a trust is like creating your personal rulebook. A trust not only provides flexibility in asset transfers but also empowers you to anticipate and prepare for life's inevitable changes. She also highlights the significance of a power of attorney —a crucial element that can make a world of difference during emergencies. As we debunk the myth that estate planning is a luxury only for the rich, we find it's a necessity that offers valuable security and control. 

But setting up an estate plan isn't enough; understanding it is equally critical. As Wendy guides us through the process at Mannor Law Group, we discuss the various legal options to suit individual circumstances. She stresses the importance of education in estate planning—apprehending the benefits and potential impacts of your decisions is key to ensuring your loved ones' future protection.  Join us on this informative journey to ensure your future is secure and your legacy lives on your terms.

Host: Attorney Bob Mannor
Executive Producer: Savannah Meksto

Transcript

Bob Mannor: 0:00

Welcome to Advice From your Advocates. I'm Bob Mannor, a certified elder law attorney in Michigan, and today our guest is Wendy Strayer, the client services coordinator for Mannor Law Group. Welcome, Wendy. (Thanks, Bob.) So Wendy is a very important element here at Mannor Law Group. She is, as the client services coordinator, often the face of the firm as much as any of the attorneys. So, Wendy, can you describe what a client services coordinator is at Mannor Law Group?

Wendy Strayer: 0:26

Well, like you said, often I have first contact with potential clients, whether it's working out in the community doing workshops or taking phone calls in from the clients or potential clients. I kind of walk them through what the process looks like and then we have them in for an appointment.

Bob Mannor: 0:48

So Wendy's been with Mannor Law Group for a long time and has done most of the jobs here, which is cool and so it has a great depth of knowledge regarding our services, and one of the things that you focus on is the estate planning department. So let's talk about why, what is an estate plan and why should someone want one.

Wendy Strayer: 1:11

Well, estate plan can be a lot of different things, whether you're just making sure you have powers of attorney documents in place or you're doing a will, or if a trust or any type of asset protection is what you're looking for. So, it can be whatever you want it to be really.

Bob Mannor: 1:30

Right, and we're big believers in planning. So the idea of an estate plan is because you're planning. So sometimes people have this in their head that they can just kind of piecemeal things and they'll say, well, I've got a beneficiary on this and I've got a deed for this, but there's no real cohesive plan. And when push comes to shove and crisis comes, you're gonna wanna have that plan. And a plan involves what if things aren't the way they are today? In other words, what if things are? There's been life changes. People have moved away, people have died, new people have been born, you've purchased new properties. You know there's all these different things that many times you're not thinking through when you're just thinking about well, I put a beneficiary on it. Well, it's not going to be comprehensive enough to deal with all of life's ins and outs, right, exactly? So tell us about how the state planning process starts at Mannor Law Group. What does that look like?

Wendy Strayer: 2:37

Well, first, typically it's a phone call to our office or someone stops in or we meet someone at a workshop. When we're in the community and we do a triage process, like you often refer to a new go to the ER we determine what the crisis is.

Wendy Strayer: 2:54

if there is a crisis and you know obviously that's going to take a different path. But for just a state planning purposes, we often just want to get basic information initially, so we aren't walking into these appointments blind and we have some concept of what the potential clients goals and wishes are, whether it's a blended family, or they're just retiring, or they have new grandchildren or you know whatever.

Bob Mannor: 3:22

Medical diagnosis, anything like that. You know, it's really interesting, the triage process that you talk about. I was with a group of very talented attorneys in Chicago a couple of weeks ago and they didn't have most of them there didn't have a triage process. I'm not sure how we could operate without it?

Wendy Strayer: 3:41

No, absolutely not. We would just be aimlessly wandering into appointments without any idea what these people want.

Bob Mannor: 3:49

I don't know about you, but for me it's important that I get myself mentally prepared before I do a consultation. I want to know a little bit about it, Just like you've gone to the doctor. Doctor doesn't walk in and say what's wrong with you. You know, if they did, then you'd be kind of nervous about it. I want to know a little bit about you before we walk into the appointment, because we don't have just fill in the blank plans.

Wendy Strayer: 4:15

Everything is tailored to what they need and what they're trying to accomplish. We're not going to recommend a will if they have a house and a cabin and lots of retirement accounts, yeah, so why waste their time talking about something that's not appropriate for them?

Bob Mannor: 4:32

Excellent. That's a good point. We're going to come back to that question because some of the people just listen to that and they say why wouldn't I have a will for that? We'll get into that in a second. But yeah, I really do think that triage process and the process of gathering some information it's like when the nurse comes in or the medical assistant comes in and takes your blood pressure, finds out what medications you're taking, all those types of things. We wouldn't expect to have a doctor's appointment without having that information provided to the doctor in advance. The same thing with the state plan. It's so important with the state planning. This is your entire life. It's everything you work for your whole life. Why would you think that it's a fill in the blank? It just doesn't make any sense. It should be tailored to your circumstances. You mentioned will, so we'll get into that a little deeper, wendy, one of the things Wendy does is you actually meet with clients to help explain the different legal options, right?

Wendy Strayer: 5:30

I do.

Bob Mannor: 5:31

I do that kind of sounds like a lawyer. Are you a lawyer? I'm not.

Wendy Strayer: 5:35

I'm not. I play one on TV, I'm just kidding.

Bob Mannor: 5:38

But you don't really need a lawyer.

Wendy Strayer: 5:43

There's no legal advice involved, it's planning for the things you have and the steps of the appointments. We have the legal stuff is taken care of. First and foremost, these people need to decide what is an appropriate plan for them.

Bob Mannor: 6:01

It's going to bring them peace and know that their stuff is being handled without all the pitfalls of potentially probate or families fighting that's a good way to say it, and the point is, of course, the lawyer is going to give the legal advice and make the recommendations, but a lot of the initial process is learning, and one of the things we found is sometimes lawyers tend to be lawyerly and speak like lawyers and use Latin phrases and all this other stuff, and I've been I've been training lawyers for 20 years now, whether it be associates or through the Institute for Continuing Legal Education.

Bob Mannor: 6:43

One of the things I realized is lawyers love to talk like a lawyer and so, in order to really get a good estate plan, you have to understand and you have to make good decisions based on your understanding of what it is that you're doing. That's one of the things Wendy is and just excels at is taking sometimes complicated concepts and making them clear, and so that they're clear, we're not getting too far into the weeds or using Latin terms. Very often it is you're explaining these things in a way that to make sure that everybody's on the same page, exactly.

Wendy Strayer: 7:17

Yeah, often just simplifying and use pictures to kind of identify the different types of planning and really just hitting the highlights of what these plans can do for our clients.

Bob Mannor: 7:32

I always say that I'm a visual learner, so I can read a book. That's fine. I can. You know, I can listen to a lecture, but if you really want me to understand something, I need to see it. And we have it's kind of a joke in our office. We have these what I call whiteboard meetings. Every time we stumble with something, I say, okay, let's have a whiteboard meeting. In other words, we need to draw it out on the whiteboard and just kind of have some visual flow of it. And that's the way I learned, and I think that's what a lot of people learn and that's what we try to do in those initial meetings. Right, Exactly. So one of the things that you discussed earlier was the difference between a will and a trust. So, before we get into that, what would you say most people choose between a will and a trust, and why?

Wendy Strayer: 8:18

Well, often, when clients come in, they just assume they want a will. That's what their parents did. It's what their grandparents did. I don't have billions of dollars or sluts of misconceptions about a trust, but after learning really the process of probate and how their family could potentially be exposed to having their information out there, they often end up wanting a trust instead. It really is just a cleaner, neater way of going through the state administration process after they pass. But if they have unique situations, the trust can accommodate that.

Wendy Strayer: 8:59

So, while people come in for a will. They are most folks, so I'm ended up wanting going with the trust.

Bob Mannor: 9:06

The trust is just so much more flexible. So you said this, but I'll repeat it If you have a will and we need to look at the will when you die, then it means it's going to go through probate. Some people don't understand that because they say, well, I'm sure my mom had a will and we didn't go through probate. Well then, she probably didn't use the will. The will was not the legal document that was binding on the situation. Maybe there was a beneficiary designation or there were other ways that things got transferred. But if you need to use the will to transfer an asset to the next generation, it will go through probate. And so then a trust. Often I hear you describe a trust as just an agreement between the family, where you're empowering the people that you love and trust to be able to take care of things when you're incapacitated and settle the estate after you're deceased, without having to go through a court or involving outsiders. So tell us some more of the advantages of the trust.

Wendy Strayer: 10:10

Really the flexibility of it. The fact is, you get to make your own rules, so it's not assumed that if your children get something and something happens, then their children get it. You get to put those rules in. So often we're getting a lot of potential clients these days that are keeping the inheritance at the next generation, not the generation after.

Bob Mannor: 10:39

Grandkids right Exactly.

Wendy Strayer: 10:41

So they get to write that in there where, if a court were to decide it, they automatically look at that natural bloodline, as far as if something happens to the initial beneficiaries, Right, so it's the flexibility really.

Bob Mannor: 10:57

I remember the story that we used to tell about the actor James Dean and how he had a terrible relationship with his father. Now, if you remember the movie star James Dean from the 50s or 60s, I think it was he died young. I mean, that's the whole thing that James Dean died young. Well, he didn't hell. Well, he didn't have a trust, he didn't have anything in place, and guess where? Everything went? To the father, who abandoned him basically, Even though he had other people he loved and would wanted his millions to go to. He went to the wrong person because he didn't do planning. So what are some of the other misconceptions about having an estate plan?

Wendy Strayer: 11:40

The first one that really comes to my mind almost everybody I meet with. You know, I don't have a lot of money, you don't have to, but you have to stop. You have a house. Often even people say, well, I have a cabin or hunting property, but I don't have anything. It's you know you have just the right things. That will have to go through a probate. Well you know, the idea is we want to keep that out and make sure that the majority of the stuff goes to who you want it to.

Bob Mannor: 12:10

I think there's this misconception that if you have, if you're not a millionaire, you're not going to end up having to go through a probate. Well, in Michigan it changes every year, but I think it's about under $25,000. If your total estate is under $25,000, you might be able to do a what I used to call a small estate. It's not really called that anymore, but basically it's a process that is a shorter process, still involves probate, but anything more than that. If you don't have a plan in place, if there's no mechanism of transfer, it's going to go through in a probably five, six month year long probate, depending on. You know how quickly all the paperwork gets done. So you kind of alluded to this. But how old should you be? I mean, do you have to be a certain age before you need a state planning? You have to be 18.

Wendy Strayer: 13:00

18, exactly, and those are young clients We've got some very equipped college students out there right now with some estate planning, even something simple as powers of attorney documents and a well. So if they get in trouble, their parents can help them.

Bob Mannor: 13:18

We've got other podcasts on this, so we're not going to get it too extensively, but we'll just say, you know, if you sign a power of attorney, are you giving up your authority, are you giving up your right to make your own decisions?

Wendy Strayer: 13:32

Not at all. Just have people waiting there when you need help.

Bob Mannor: 13:36

It's one of those things we talk about. You mentioned 18 year olds and you think about your typical 18 year old. You know they, you have, yours is 20. 20. Yeah, and so, but you're familiar with the concept that it's. You know, you think you're ready for the world, but you also don't have experience.

Bob Mannor: 13:53

And so there's this combination of, like the person on one shoulder that's saying you don't need help and the other one on this I was saying mom, yeah, mom, can you set up a doctor's appointment for me? I don't know how to call the doctor, you know. And so the thing is, if something happened, they're 18. You can't. Parents don't have the authority to even get information from the school or the hospital unless we have documents in place that would allow that. So if somebody was unconscious in a car accident, arrested for some, you know, party they went to, or something like that, you'd probably want your parents to be able to help, and they might not be able to, you know, step in and get the information they need without those documents in place. So, you know, extrapolate that out 40 years, and now you're 58.

Bob Mannor: 14:43

And all right, yeah, so, and you have a car accident. Isn't that just as important that your spouse or your children or somebody you love and trust can step in without having to run into court or something like that. So you alluded to this earlier, but I want to make sure we spend a little bit of time on it. Do you have to have a certain amount of money before it's appropriate? Actually, I'm going to make it a more specific question Do you have to have a certain amount of money before it's appropriate to do a trust?

Wendy Strayer: 15:14

I don't think so. Right, you know, and often it's not really about the money because, well, you said you could put beneficiary designations on different accounts and policies and stuff like that. But honestly, if you have a house or any type of real property, that should be your first trigger that I need a trust.

Bob Mannor: 15:33

Right.

Wendy Strayer: 15:35

It really does just take on all the mess of probate and time consuming and the cost I mean the probate cost alone just outweighs the cost of the trust itself yeah.

Bob Mannor: 15:48

And remember, trust is just an agreement between you and your loved ones. It's an understanding and an agreement, a contract, and so the reason I asked the question that way is that there used to be a standard line out there that I heard people say and I don't hear it as often anymore, but it comes around every once in a while that people say, oh, you don't need a trust unless you have $600,000 or more. You probably have not heard that, because that's kind of a really kind of a bit of an old fashioned kind of a thing. It was never correct. The idea of the $600,000 was that was based on the federal estate tax as of like 20 years ago, right, and?

Bob Mannor: 16:28

But people got that stuck in their head because it was $600,000 for many years, for a couple of decades before that, and they thought, well, trust are only about taxes. They are partly about taxes, but it's not just about taxes. It's about convenience for the family but saving money. It's about keeping family matters in the family and not having to use, you know, judges or having to go through a court system for family matters, right? So this is a good one. Why not just add the kids names to assets or use beneficiary designations?

Wendy Strayer: 17:02

That's just a disaster waiting to happen. So you know, if you have, if you're a co-owner on your parents' account or your kids' accounts and you know something happens, you get into debt. You know, either garnishing your wages, or report order that's considered your asset and they can take. You know, if it's your mom's bank account, you're the co-owner. They can take that money to pay off the debt that you have.

Wendy Strayer: 17:33

It also causes problems for long-term care often If your spouse needs long-term care, they're going to consider the bank account. You're a co owner on of your parents as your asset.

Bob Mannor: 17:46

Right.

Wendy Strayer: 17:46

And we all know, you know Medicaid benefits. It's an asset, you know based program, so that's going to be exposed to that.

Bob Mannor: 17:55

I wrote this down the other day. I was just thinking through this and I wrote down DDBB, divorced, debt, bankruptcy and Bad Decisions. And so so your kids are on your account and they get divorced, that could be considered part of their merit list their money, their merit list. They run up some debt, their money could be garnished or your money could be garnished to pay their debt Bankruptcy. Obviously that's going to be a big problem. And then bad decisions. That's a big one, and you know when I say bad decisions, it could be.

Bob Mannor: 18:28

You know things that weren't really bad decisions, but it was bad life experiences, like someone got very sick, or they had a stroke, or they had lots of medical expenses. Now parents' money could be exposed to the kids' medical expenses, or even their spouse's medical expenses or their son-in-law's medical expenses, because you put your daughter on your bank account. So it's just really a bad idea and you know it makes me think about the different. You know things that change in life and so the idea, what we're always trying to do is make sure that we have a plan and we've thought through things that might occur, like if people die in the wrong order, if people get sick, if there's some financial stress, that we've thought through options to protect our clients and their families and their kids and their spouses, and all of that. But when something actually does change and you want to change your estate plan, how do you change an estate plan once you've already created it?

Wendy Strayer: 19:29

Well, it's it's. That's the nice thing about the trust it is flexible. You know, often my clients, all you know, say well, what if I had to change something? It's as simple as we schedule a phone call with the attorney, of course, they're going to make sure that you know that these people are making changes, you know, with their own free will. There's no, you know there's nobody's holding the gun to your head and honestly just make sure the changes make sense, Right and are consistent with the rest of the plan.

Bob Mannor: 20:02

So sometimes people think I've seen and I really discourage people from doing this where they have a legal document and they just like cross out a section or they initial it. That's a really bad idea. It's likely to get misinterpreted. But the other problem is if we just change that section, it may reference that section somewhere else in your legal document. So it's really important to do it formally and legally, because we got to make sure everything lines up and we don't have contradictory terms somewhere in that document.

Bob Mannor: 20:33

Well, I was thinking about the flexibility of it and the sort of the difference between, you know, using deeds or using beneficiaries and and doing a trust, which is a more comprehensive plan. I was thinking about some folks we met with recently where they had very clear, you know, thoughts about what they wanted to happen. They had property that had been in their family for three generations and they said it's just really, really important. It's not even worth a lot of money, but it's just really important that this property stays in the family. And so they had this big plan that it was going to go to the son and then from the son to some some his nephews right and then from there on to the next generation, and they wanted to do it with you know deeds. That's a terrible mistake, right?

Bob Mannor: 21:25

But you can do that with a trust that's the whole point, as a trust can go through multiple generations. There was a big story out of Saginaw, Michigan a few, probably 10 years ago and the story was that got picked up by the national news that there was this lumber baron. So if you're not familiar with Saginaw, Michigan, it used to many, many years ago 150 years ago be one of the richest areas because it was a lumber area and that was people made their money on that and so he had this rich lumber baron and they the news kind of misinterpreted the story, which they said that he was this old miser who didn't want anybody he knew to get any money and that he had left it to four generations or something like that, or two generations in the future. And now those people were getting their money from 150 years ago or whatever, and they presented it as if it was this old miser that didn't like anybody and only wanted to leave it to his great, great-grandchildren., . And that was actually a strategy that people used to say you know, if you think of some of the famous families that we have in America that they left it to multiple generations.

Bob Mannor: 22:45

So what the real story was, if they would have dived a little deeper was he provided for everybody in his family and then set aside money for the next generation and the next generation and each generation got it through and then at some point it just terminated, but it was a. It's an interesting story. Now that's not something that all of us can do, but it shows you the flexibility of a trust that, in the family that we were, we met with. It was over a property that wasn't worth the whole lot, but it was very important to the family that it stayed in the family. They had this legacy. Now it wasn't like the rich lumber baron, but it was important to this family. So I think that's a great you know great advantage of trust. All right, so if there's someone starting the estate playing process and they call us up about how long does this process take?

Wendy Strayer: 23:37

From the initial phone call to signing the documents Usually runs about six weeks. Okay, we don't rush through it. It's very important we're. You know we pick every single detail. It goes through a double, triple check system and there's just a lot involved, you know, and on our side of things to you know, put these plans in place. So, and these are important documents, right. We're not gonna rush through it. Often We've had clients from the time the initial meeting to you know the time they meet with you guys for Designing their plan.

Bob Mannor: 24:16

They've Sometimes done a 180 and what they change their mind, because they really got a chance to put some thought into it.

Bob Mannor: 24:23

Well, you mentioned. That's a very good point, because once you know, you may come in with a certain idea, and then, once you, it's explained to you that you have options. So sometimes people come up with their plan because they don't realize how many options that they have. So they, they, you know. I could give examples, but that's the bottom line is that this is about education. It's about making sure that you know what you're doing and that you get exactly what you're wishing.

Bob Mannor: 24:50

You know that you're planning on, and that's why we try to slow down that process just a little bit, because we don't want to have Spelling errors, we don't want to have names wrong. We don't want to have you where you don't understand what the trust says or what the will says. It's just really important that we have that education process and that we're very thorough about making sure that your goals are accomplished. Well, do you have any kind of the closing Statements here? Do you have any? What's your best advice with regard to making an estate plan, or what do you want the listeners to remember from this?

Wendy Strayer: 25:26

Probably just be open to it. You know, be open to coming in and talking about it with us. You know we're not gonna pressure you into making you do a trust. It really is about education. Yeah, and we do that on all aspects of what we do here at Mannor Law. You know we'd rather you take the time to be educated about it, to know what your options are. Often, you know, like we said, those myths are debunked. You don't have to have a lot of money.

Bob Mannor: 25:56

I

Wendy Strayer: 25:57

Iclient I met with a client ye sterday, she has has two bank accounts, but the protection and the peace of mind that it brought to her, making sure that if something happened to her, her kids would be taken care of, and the right people would be in place to help them. So often it's it's just about the peace of mind at the end of the day.

Bob Mannor: 26:20

You make a good point about that that a lot of times we're talking about these documents as if you know they're just about what happens after you die. But a lot of times it's also making sure that we have a plan in place in case you become incapacitated, and no one likes to think that's ever gonna happen to them. You know, we see, it might have happened to our parents, might have happened to our neighbor, but the statistics tell us that all of it or not all of us, but of Large percentage of us, the majority of us are going to have some period of our life, whether it be short or long, where we're gonna need the help of other people Because of an illness or because of the capacity or memory loss or things like that. And that's what this plant, this is about to. This planning, is about that as much as it is about what happens after you die.

Bob Mannor: 27:05

The phrase I often say is you know it's. You got to do planning for what if you don't die? And obviously we're all gonna die eventually. But so many people focus so much on what happens after I die and really, if not more, at least as much a focus should be on what happens before that To make sure we have a plan in place for that.

Wendy Strayer: 27:28

So the big thing is, it's like you say, it's never too late, right? You know? Yes, our typical client is, you know, 70 and up, but, honestly, we've been seeing a lot of younger families too. But, yeah, it's never too late.

Bob Mannor: 27:43

It's right. We have people come in in their late 90s that have never done a state planning and you know that we get it, you know. So one of those things that people put off and they don't want to have to go see a lawyer, and but we're friendly lawyers, yeah, you know we're nice lawyers. So so well, thanks, wendy, this has been great and I appreciate you coming on the podcast and educating folks. So don't forget to subscribe to the Podcast. You can subscribe to advice from your advocates on any of the places that you listen to podcasts. Thanks.