TRANSCRIPT:
Welcome back to Financial Foundations, brought to you by Base Wealth Management, where we are the foundation to your financial plan. I’m your host, Dustin Taylor. I’m your co-host, Alex Wolfe, certified financial planner. And today we have with us Pat Barnes from Spinner Law. Thanks for joining us, Pat. Absolutely. Thanks for having me. So Pat, can you tell us who you are and what you do? My name’s Patrick Barnes. I’m an attorney with Spinner Law Firm. We’re based in Wesley Chapel, just north of Tampa, and we have an office in Lakewood Ranch. We cover that whole stretch between Tampa and Lakewood Ranch. We do personal injury, business development and formation, and estate planning. And how did you become an attorney? What was the process like, and why did you choose to become an attorney? I became an attorney to help people and to do public speaking. I really wanted to be in a courtroom.
So I get that with the personal injury and the helping kind of problem solving I get through the estate planning. People come in, they have goals, they’ve got maybe some hurdles, some objectives, and then I help them figure out the best way to solve those. So I really, that’s my favorite part about being a lawyer is helping people interact with them. You touched on it a bit there. Today’s episode, we want to, we want to speak about estate planning and how that affects retirement planning as well. Can we start with what are some common concerns when it comes to estate planning and what you help clients do? I think more than anything, people want assurance that what they want have happened to their stuff actually does. And there’s lots of ways to do that, but also people want to keep it simple. They want the people that are going to be in charge to make sure that their stuff goes where they want it to. They don’t have like a giant project in front of them. And they try to avoid the probate process, which is the actual court administration of your estate. T
hey want to avoid that as much as possible. And so those are the three things that I think just generally people have an interest in is why they call people will literally call and say, I don’t want everything tied up in the court system forever. How do I go about avoiding that, right? And that’s a lot of estate planning. Yeah, that’s definitely a good point that you make about making things simple, that after their passing, they want things to be distributed according to their wishes and avoid any additional court fees, the cost and the time and headache of dealing with probate. When you’re working with a couple or a family, are you traditionally setting up trust accounts, titling accounts appropriately? What’s the process you go through with a client that comes in and wants to start some estate planning? I think the first thing I’m looking at is their assets. Where are they? First of all, are they in Florida? Do you have stuff that’s outside of Florida? How many properties do you own? How many different accounts do you have? Where are they? What’s in them? Because all those change my decision making on what I think is the best route for them to go.
Some people can do a will, or what we call a simple will, and as long as they have what’s called a contingent beneficiary set up on all their accounts, and there are some types of deeds that are specific to Florida, maybe you’ve heard of like a Lady Bird deed or an Enhanced Life Estate deed, they can automate a lot of the process without needing a trust. You get into out-of-state assets where Florida kind of loses jurisdictional control of those assets, or you’ve got a fleet of properties that you wanna have kind of one container where they’re gonna go, then you get into the trust, we call a living revocable trust situation, and then to go even further, if you have a specific family situation, like maybe you come from a blended family, and the parents who have gotten married, but they’ve got children from prior marriages, they may want each other to enjoy their properties, but upon when they’re done, when they’ve both passed on, they kind of want their own stuff to go back to their.
Like there are there are trusts for that right so it it’s a like broadly it’s about your assets and then making sure that they are simplified getting to where they need to go and then it can get as complex as you want it to right yeah there can definitely be some complex needs out there blended families special needs children couples that maybe don’t even have children and so they’ve got a lot of decisions to make about what’s gonna happen to their stuff when both of them have passed things like that what are some common estate planning misconceptions the biggest misconception that I deal with is people misunderstanding what trusts do so for instance a lot of people think that a living revocable trust is a liability barrier between them and their things and it’s not for the most part right a living revocable trust is something in which you create and while you’re alive and well you manage it so you’re the trustee of it and you can also enjoy anything that you put in it so
You’re also the beneficiary, you play all three roles. So you are in essence that trust. So sometimes people that are like in high risk jobs, maybe a police officer or a doctor will say, well, I want to create a trust so that if I got sued, nobody can come get my things. I want to put my house in the trust, I want to put my cars in the trust, and that’s not what a living revocable trust does. It’s really a vessel that once you die or you become incapacitated, it’s a way to make sure that things get where they need to go without the need for probate. But it doesn’t really protect you from a liability perspective. I think that’s one thing I, and I will say, going back to wanting to help people, educating people on estate planning, people call and sometimes they’ll say, I need an estate plan and that is literally all they know about it. They just know like the word, blank slate. And that’s perfect. So I educate, this is what this does, this is what this does, this is why this might be right for you. So I’d say kind of fixing what people believe about trust.
There are protective trusts, but it’s not the one that generally the living revocable trust to point. How does a typical first meeting go these days? It’s usually a phone call I’m happy to meet with people in person love meeting people, but I’d say most often it’s a phone call and it’s me Getting their general understanding right tell me why you called me, right? And they may say something very specific and that helps me understand where they want to go with it And again, they may just call and say I don’t have anything in place and I want something and that’s the experience And what they know and are prepared for and then it’s me Somewhat barraging them with questions and then helping them understand why I asked those questions and what they mean. Yeah, that’s important We deal with some of that too when you’re doing that discovery phase and you want them to be forthcoming with as much information as possible because just like With a financial plan the plan is only as good as what you’re giving me, right? The stuff that we’re talking about the assets and things like that.
Yeah. And I’ll usually say something like, I’m going to ask you a bunch of questions. They may seem random, but I’m going to help make sense of it. Right. And some of them can be very personal, but you got to get that baseline. There’s no reason to talk about simple will package if I know based on what they’re telling me that they need to trust, right? We may go over it briefly, but we might as well focus on the thing that they actually probably need. Right. And, you know, we offer free consultation. So it may be something they go, okay, well, I need to chew on that. Right. I’m going to set up a second call. I have a questionnaire that I have them fill out that gives me all the details. I usually reserve that for after the first call. That way they kind of, because it has a lot of stuff in it that they, without having talked to me ago, I don’t know what any of this is. So we do the first call to kind of do a baseline understanding of the process, fill out the questionnaire once you got a little bit of knowledge on it. And then, and then we either set up more calls to kind of figure things out more indepthly. But the goal eventually is to get to a point where we’re reviewing documents, making sure they look exactly right?
And then executing them. I’ve heard other attorneys talk about floridizing existing estate documents. Is that something you do or you review if they move here from another state? You review their existing documents and is it often you make changes or what’s that process? I’m always happy to review them. I’m not one to sell people into things they don’t need. So if they have a valid will from out of state, that can still be probated in Florida. But obviously my recommendation is always if you’re going to be living in a new state, you may want to consider getting an actual Florida specific will. But will an out of state will work if you move to Florida? Yes. And I tell people that. But a lot of people still are like, well, I live here now. I’d rather get it up to speed with Florida. Because a lot of times it’ll cite statutes from Colorado or from wherever people come from. You just want to make sure it’s accurate and up to date, but that doesn’t mean you can’t use an out-of-state will in Florida. Cause you can’t or trust, right?
If you’ve created a trust, that trust is probably still good. You may need to just restate it to say, I’m a Florida resident. So that’s another thing that I come across is people that have trust and estate planning documents that are from like the eighties, you know, they had them done decades ago and could sure use a refresh there may be people they’ve put in there that are no longer alive, or there’s new additions to the family and things like that, or some of the language may cover like next of living kin or certain types of language, but it’s definitely good to get it brought up to speed. A lot of what we put in our wills are categories like, so to my descendants, which could be my kids, my kids, kids, my kids, kids, kids. And I tell people, look, we’re going to build this so that if you were to pass away tomorrow, it’s good. And also if you forget about it, it should hopefully still be good in 30 years. The reality is you should.
be looking at it annually, like with your financial plan right? You don’t want to just set it and forget it. Do I need to change the personal representative? Is this trustee still appropriate? When I created my documents and I put someone in place, that might be a completely different person in 20 years. So if I haven’t looked at my documents, you may want to say, are my parents still the appropriate age to be the guardians of my children if something happens to me? If you’re not looking at it, maybe not every year, but at least every couple years you should go back. Do I have new accounts that need to have new contingent beneficiaries put on them? We moved from Chase to whatever, but we didn’t, we forgot to change the contingent beneficiary. Well that then, if you don’t have a trust, could potentially need to be probated. Looking at it and call me. Call me back. Say hey, it’s been three years, I just want to make sure I’m still good. Can we set a call? Sure. And we offer free consultation, so what’s the harm? Yeah, exactly. Good point.
Which do you need in an estate plan, would you say? Personal preference, I would say the younger the better. People think you have to be wealthy to have an estate plan. That’s not true. I’d say if you’re … Any life changes, big ones, you bought a house, you got a new job, you just opened a new … You just maybe hired a financial advisor, you just had kids. There are documents that are appropriate for all of those different life changes, so you don’t have to have millions of dollars. You just need something to have changed that you need to make sure that that is secured for if something should happen to you. And then so much so that even when you turn 18, and we do this a lot for kids that go off to college, so they don’t have any money, they still live with their parents, it’s still their primary residence, but once you turn 18, when you go to college, the college won’t even talk to you, talk to your parents, even if they’re paying the bill. We do powers of attorney, durable powers of attorney for 18 year olds for their parents because they don’t want to be dealing with the billing portion of the college.
So you got to give your parents that ability or give them a medical surrogate form so that if you are in the ER in college, the parents have the ability to talk with the doctors, talk with the billing department. So like that would be the, you know, 18 would be the youngest and you don’t necessarily need like a trusted 18, but you should definitely have a power of attorney and a medical surrogate for your parents. I’m glad you brought that up. I was going to ask you about kind of those ancillary documents and legal things that you should have like power of attorney, healthcare surrogate, and the importance of those where even if you’ve not passed away, someone can make healthcare decisions and financial decisions for you if you are not able to do so for yourself. I mean, the reality is that it’s a pretty morbid topic. And so you’re sitting there talking about the inevitability, right? We all die and hopefully it’s a long, long time down the road and we have to amend these documents five times because you live a long, prosperous life.
But the reality is incapacity, which means the inability to make decisions for yourself can come on quick right and so you said well I don’t need a durable power of attorney right now I’m good and healthy if you were to be struck by a car tomorrow and put in a coma you need someone to continue to carry your life forward for you even if you come back out and everything is fine and it is really hard for family or friends to go get that ability you don’t have one once you’re incapacitated you need the court to approve it guardianships put in place that is a really really big project versus a quick document that you have that hopefully you never need to use but if you do it’s there for you so yeah that it’s understated how important having a power of attorney isn’t you know is is to have one other thing that I come across is a lot of young parents that don’t have any guardianship set up and I feel like that’s a big issue where they need to talk about who they want to care for the children if something happens to them and that’s why I think young people are so hesitant to do it because nobody wants to sit at the coffee table with your spouse and say, where are our kids going to go if something happens to us? So they avoid it. Right?
I know when I did that with my wife, it was like looking into a kind of a morbid topic and we were just like, let’s do that next week. Let’s do that next week. You got to just, you just got to do it because you’ll feel so much better having it. But so the wills, the trusts all address a permanent guardian. Who do you want to be the permanent guardian? But there is a document called a pre-need guardianship affidavit that is a short term guardianship because it takes a while for the court to finalize formal guardianship. So the pre-need guardian affidavit, a pre-need guardianship affidavit takes effect immediately.
So we always like to have our young parents with minor children do one of those so that, you know, they can jump, the person can jump in and be the guardian while the court is doing the formal proceeding. The other one is, you know, like if you and your spouse are going out of town and you’re leaving your kids with your grandparents, you probably should do some sort of a limited power of attorney for that child, for whoever’s watching them. Because even if you’re gone for a week to a different state on vacation and the child needs to go to urgent care, urgent cares can be finicky about who’s bringing that kid in, even if it’s a grandparent. So there are a lot of, estate planning is such a broad term, it’s really, it needs a new name, you know, just more like life management documents, because there’s so much more than just, well, I don’t have a ton of money and I don’t plan on dying anytime soon. So much other stuff that goes into it. Sure. Yeah. I think you’ve highlighted a lot of important things there. So this is a question that can, it’s probably for both of you, I want to hear kind of both sides of it. How important is it for your financial advisor and your attorney to work together on an estate plan? I don’t think it’s important to have both. I get a ton of questions that would be better served or for a financial advisor.
I like to think of myself as like the architect of a trust. And when I give people the illustration, I say, look, I’m like a potter. I’m building you a bowl, and then I’m gonna hand you the bowl. And in the situation of a living revocable trust, the bowl doesn’t have a lid on it. You can put stuff in it. You can take stuff out of it. You can smash it against the wall and destroy it. You can paint it a different color and amend it. But at the end of the day, it’s your bowl. And then you give that bowl to your other professionals in your life, your CPA, your CFPs, your advisors, and they tell you strategically how to use that. Does that make sense? And so I don’t fill that bowl for you. I mean, I can help you draft documents to put stuff in it, but really you have to make that strategy with your other professionals. So whether they need to work in tandem hand in hand, I don’t know, that’s just personal preference, but you should definitely at least consult with them.
Yeah, from my side, when I think about like a complete comprehensive financial plan, estate planning is a very critical piece of the puzzle in working directly with those other professionals, the CPA, the attorneys, to make sure everything is cohesive, the accounts are titled correctly, especially when you talk about filling the bowl, just because you’ve created a trust doesn’t mean there’s anything in it. You wanna make sure that if you have a trust that the account is retitled, you’ve changed the contingent beneficiaries on retirement accounts to the trust or whatever it is. So it is definitely important that we work together. Also, when a client may be interviewing or like trying to find an attorney, we can be kind of the guide and help them with questions to ask, even if we’re not in a meeting, but we can say, these are important things to ask an attorney that you may be wanting to meet with. So that way they are maybe comfortable with some of the terminology or just general things about estate planning and all those other topics that go along with it.
And I will say, I breathe a sigh of relief when I do my initial call, knowing that someone has a financial advisor, because somebody is guiding that next step, right? Like I said, I can build these documents for you, but it’s gonna be up to you to some extent to make sure they are cohesive. So when I hear that somebody has a financial advisor, I’m happy to hear that, right? Because I mean, somebody else is looking at the other end of it. I also get a lot of questions about, well, if I do a contingent beneficiary on an IRA or a Roth or something like that, well, how long does it have to be till I pull out of it? And I always say, do you have a financial advisor? And if you don’t, get one, and then they will be best served to answer those kinds of questions. Because those things move, that’s a moving target, right? It changes. And I just feel like that’s a good question to have someone else that is there with your actual finances, making sure you understand how it works.
Right, there’s so many overlapping topics; the financial plan, the estate plan, and you just can’t be that professional that knows and does it all well. Some people may overstep or maybe they know a little bit, but it’s definitely better to direct them to the professional that can answer the question better. Enough to be dangerous, right? You can answer it, but really that needs to be deferred to that, you know, CPA with the tax questions, financial questions about the accounts and how to manage them, you know, CFPs or advisors, and then the legal documents to the attorney. That’s how I see the triangle. It’s definitely good to have everyone that knows each other or can at least work well together and ask questions. Okay, so that pretty much sums up our topic for today on estate planning. If you’d like to reach out to Pat with your needs of an estate plan, you can contact him at… You can reach me by email at P, like Patrick, Barnes, B-A-R-N-E-S, at Spinner Law Firm.
You can call us at 813-991-5099 or check out our website out spinnerlawfirm.com. And if you’d like to find more free resources on this topic and more, you can visit our website at basewealthmanagement.com. You can subscribe to this YouTube channel or podcast. You can also send us future content requests if you have any questions or things you’d like to see addressed on the podcast or in videos. Send those to us at question at basewealthmanagement.com. And also, just one quick thing, free consultations don’t bite. So if you do just want to reach out and you just got a quick question, I’m not going to snag you into making you buy a whole package of estate planning documents. I’m happy to just chat if you want to call and have some brief questions. All right. Thanks for joining us. Absolutely. Thanks for having me. Yeah. Thanks for being here. I’m Dustin Taylor. I’m Alex Wolfe. We’ll see you next time.
