Transcript
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Welcome to the Think Generation of Wealth podcast, and this is episode number 119.
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I am your host, amir Estimo.
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Thank you for tuning in in today's podcast episode, because today's podcast episode is brought to you by Starville Talent Group.
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So thank you very much for tuning in in today's podcast episode.
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We have a very interesting podcast episode.
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Now.
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The last two podcasts I've been talking about the when it comes to Jackie Chan and his wealth and how he's not leaving it for his children.
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Now today's podcast we're going to talk about.
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We're going to talk about a will and we're going to talk about trust.
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Now that I have two video clips that will be playing throughout the podcast, so to kind of give you more context, more information of suggestions of what to put in into your will and trust, if you don't already have one, or if you do have one, maybe you can probably have a.
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It's basically a revise, revise on your will and trust.
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And then, also in today's podcast episode, I will share the pitfalls of why you should have a will and trust, the pitfalls of why you should have a will and trust from celebrities who passed away that did not have one.
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Now, if you hear any clicking in the background, please, that's just me.
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I'm doing this podcast because I'm recording it and I'm doing it on a split screen, so if you hear some clicking, please I apologize in advance.
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Anyways, let's jump into today's podcast episode, but before we do that, also I would like to say I appreciate you taking the time to listen to this podcast episode, because you could be doing anything in this world, but the fact that you are listening to this podcast episode is much appreciated and thank you very much.
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Ok, so now let's go ahead and jump in into the podcast episode.
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Now, today's podcast.
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As I said, we're going to talk about the will and trust, and the first thing I would like to mention is to kind of give some context of why is it important to have a will and trust.
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As you know, we've had celebrities passed away and did not leave a will and trust, and what happened.
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So I'll give you a few.
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These are notable celebrities that passed away that did not have a will or a trust.
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One, prince Prince passed away in 2016 and he didn't have a will, so his um, his estate, was basically left to a legal dispute, and for the state of minnesota, I think.
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Second was, uh, aretha franklin remember the queen of souls.
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She passed away in 2018 didn't have a formal will, leaving her 80 million estate subject to michigan's, michigan's intestacy laws and family disagreements.
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Jimi Hendrix was another one.
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He died in 1970, didn't have a will, and this caused decades-long battle over his estate and music rights.
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The most famous one here, in my opinion, bob Marley, the reggae legend, passed away in 1981 without a will, which led to ongoing disputes among his heirs, which is his children or whoever, and his estate in intellectual property.
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Now, pablo Picasso, the renowned artist, died in 1973 without a will, resulting in a six-year legal battle among his heirs and significant legal peace.
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These are cases where, if having a will or trust, would have probably saved all this from or even going to probate.
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Now it's really inspired because Haitian music artist, michael Benjamin.
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He passed away in 2022.
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And when he passed away in 2022, now, to this day, there is his estate.
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Granted, he was a musician and it looks like his wife was pretty much the breadwinner.
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You know, musicians, they make money here and there, but the thing is is that he still generated some type of net worth and right now his estate and financials in question?
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His wife has been on social media, so she still can't even, I guess, even access anything because he didn't have a will and he didn't have a trust.
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So that's what inspired this episode today.
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Okay Now, if you, if you don't or do have a will, if you do, if you feel like, hey, this is not anything I need, I don't need to be educated about this, this is not something I need to worry about, hey, maybe you can bypass this episode or you can just see what information is shared on here and you can learn something, because it's always good to learn something.
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Right, like even me, I didn't.
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There was a few things I didn't, I didn't know.
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And, like I always thought, you can put your life insurance, put your, put your cars or something in your trust and they come to find out that's not something you need to do Now.
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According to a survey taken in 2024 by Caringcom, only 32% of Americans have a will or estate planning document, indicating that 68% do not.
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And here's all the reasons for not having a will or trust.
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One perceived lack of assets, which 40% of respondents without a will believe they did not have enough assets to justify one.
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Two procrastination Many individuals acknowledge that importance of estate planning, but they delayed the process, often due to discomfort with discussing end-of-life matters, because no one likes to talk about death.
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You know, I know this is something is very sensitive topic, but at the end of the day, is something that must be done.
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To cause concerns, a will and trust is way too expensive and it gets complicated.
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Now here's, here's our implications of why not having a will of trust to the state gets to determine the asset distribution without a will or state.
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In intestacy, laws indicate how assets are distributed, so and which may not align with your personal wishes, which means that if you didn't have a will or you know you don't have a trust, the state now becomes the one who gets to make a decision and that's called, probably, the probate process, and that process can get very expensive, it can get very complicated and it's just something that you don't want to do do.
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So, basically, point number two extending the probate process.
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Estates without wills often undergo longer and more costly probate proceedings.
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So you can see from point one, if you don't have that, point two then becomes a very lengthy process for your family.
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Now I can tell you I again, I I'm in the land business and I flip land and I remember there was a property.
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Uh, this lady reached out to me and she wanted I you know we do some marketing, we send some mailers and this lady reached out to me and she said that she just finally was able, she was able, to finally get her mom's situation figured out.
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And then they come and find out that her mom had land that she owned they didn't know about.
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But the thing was is that she said it took them about two years to go through the probate process, so which was very time consuming, and by the end she was fed up because she was like it was so expensive, so complicated, it took so much time because her mom didn't have a will when she passed away.
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Now, point number three potential family disputes.
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Lack of clear directives can lead to conflicts among surviving family members.
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So meaning that, hey, if Joe, smoe or Johnny was supposed to get the home, he didn't get it.
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And now we got a home and we don't know who's belong to.
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Is it to Johnny, is it to Sarah, is it to Lee?
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We don't know.
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And now Sarah, john and Lee all have attitude issues because they don't know who gets what.
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So we keep those in mind and that's why it's important to have a will or a trust, or both.
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It depends on what you know.
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What, what, how do you feel?
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It's not solely for the wealthy, get that out of your mind.
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It's your personal wishes and honor.
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So, upon your death, and loved ones are protected.
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So this, then, does not get relegated to the state.
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Does not get relegated to the state.
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So once upon your passing, as you can see, I'm going to say that.
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So today's, so, seeing that I'm going to play a clip of the will and trust, and so I'm going to play that clip throughout the episode.
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So as remaining here, these next two clips, one is going to be the importance to having a will and trust, and what's the difference between the two, and then the last clip is going to be the five things that you don't need to put into your trust.
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That's not recommended.
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So these were from YouTube and I was on look, as I was putting this content, this on content, together, and I feel for me, you know, here's, um, here's gonna be various reasons.
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Number one okay.
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So this, this matters to us because the more it protects your loved ones, it avoids probate, it provides that, if you have pets, it provides clear direction.
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So, upon you pass away, you need clear directions of what goes to what.
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Who does what in a situation.
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So this only creates peace of mind, because, could you imagine?
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It's already.
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It's already terrible that you passed away and now you're not.
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You're not amongst the.
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But the thing too now is now it's like the living now has to be paying for your negligence Even me, not just you, but even me also.
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So now, if you're listening to this podcast in other countries I don't know how that works Maybe you should look into the laws of your country wherever you listen to this podcast.
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But here in the US, I believe you should make it a priority.
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Even if you don't get a trust, you should have a will, because that makes it easier for everyone involved who now already now mourning your death because you're not amongst us anymore, but then, on top of that, to have to deal with all the issues and intricacies that they have to deal with, because now you passed away, we don't know what assets you have, we don't know what you did, we don't know, and it's a form of asset protection too.
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Now there is two different type of trust.
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Now, if you decide to do a trust, there's two different type.
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There's revocable and irrevocable.
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So revocable.
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So basically is you can go in there in your trust and what you?
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You can go in there and say if you had your asset going to Johnny.
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But then now you say you know what Johnny?
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Let's say Johnny is no.
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Let's say something happens to Johnny.
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Maybe you and Johnny got some beef, maybe Johnny's no longer alive.
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Whatever the situation is, you can go and change that and say OK, you know what?
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I want Sarah now to be in charge.
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I want Sarah now to have the house, no longer Johnny Right now.
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Irrevocable meanings whatever is there is set in stone cannot be changed.
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So those are the two things you guys got to keep in mind now.
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I'm pretty sure there's more to it, but that's just the gist of it.
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Uh, when it comes to your trust, okay, so I'm going to leave you guys with these last two episodes and just remember this is for informational purposes only.
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I am not a CPA, I am not a tax accountant.
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Please get this information from someone who's qualified than I am to be able to help you set up all this stuff.
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But at the end of the day, if you're someone who's let's say, whatever age 30, 30 going 40s this is something you should be thinking of, because it doesn't matter.
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You just don't know when that time or day is going to happen that you will no longer live here again on this earth.
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So, because tomorrow is not promised to us and I know it's I know this is a topic that not a lot of us want to discuss, but it's very important.
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It's very important to have this and have your matters and your affairs lined up so, if something ever were to happen to you now, your family, your whoever doesn't have to now also deal with the stress of financial situations.
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So just keep that in mind as you listen to these two clips the importance, take some information and hopefully, if you don't go online, find some free resources If, again, you don't decide to do a trust the most leaving this episode today.
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What you should have in mind is I should at least have a will.
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That is even the most important document, so keep that in mind.
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Like I said, there's there's Bible information in these two clips and then we'll next week's episode, we'll dive in to another topic.
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So I know, I know again, this is not a very comfortable topic for everyone, even for me, but this is an important one to have to have that discussion.
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Ok, whether you're someone who's probably getting married, fiance already married, this is something that you and your significant other should be discussing.
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If you like to, we would like.
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If you would like to leave, we would like to hear you, as this podcast for me is this podcast.
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2025 needs to have growth and I would like to hear certain topics you guys would like to talk about.
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What can I improve?
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Is my sound equipment, whatever that is.
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Much love.
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Okay, tune into next week.
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Much love, peace.
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You've probably heard of both living trusts and wills, but have you ever contemplated what makes them unique?
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As you can imagine, there are plenty of nuance in the two common vehicles for transferring property and assets to an heir, and each has its own specific advantages to those who use them.
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In fact, understanding the distinctions between each and their common uses can be a valuable token of knowledge for you and your family.
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So which might be best suited for you and your family's future?
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Let's review a few key differences between a will and a trust.
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First, what is a will?
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A will is a legal document that outlines your wishes in the event of your death.
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It can declare everything from whom you wish to care for your children to how your assets will be distributed among family and friends.
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A will can declare how you wish to be cared for if you are incapacitated.
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The purpose of a will is to organize a person's estate so that it can be passed on to predetermined heirs most often family and not the state or just automatically to the next of kin.
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In essence, it gives you control over your belongings, your property, finances and more once you have passed away.
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2.
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What is a trust.
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What is a trust?
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A trust is another vehicle used for transferring property or assets.
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Only this time, the trust is used to declare a person or institution, known as a trustee, who is employed to hold the property in place for the beneficiary over a determined amount of time.
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For example, a person decides he would like to pass on an inheritance to his grandson, who is still a child.
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By establishing a trust, he can employ the parents as trustees who will maintain and secure whatever assets are being inherited until his grandson is an adult.
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The key differences between wills and trusts Wills and trusts each have their own benefits to those who employ them, but there are some key differences for each that can make one more preferred than the other, depending on your individual needs.
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For example, a will passes through probate.
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Wills typically pass through a process known as probate, a procedure in which a court ultimately gives permission for the assets in a will to be passed on to their heirs.
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There are, however, ways in which probate can be avoided with some planning and preparation or, depending on state law, wills only go into effect after death.
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Since a will's primary purpose is to declare how a person's wishes will be carried out after their death.
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The document obviously doesn't take into effect until then or until the owner of the will is incapacitated.
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A will is a document that directs who will receive your property at your death and appoints a legal representative to carry out your wishes.
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Trusts take effect immediately.
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Property can be distributed before death, at death or afterward, as determined in the trust itself.
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Each covers different types of properties.
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A will only covers the specific property a person owns in their name only at the time of their death.
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A trust, on the other hand, governs all property it's been funded with, such as insurance policies, for example.
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Now how about some of the direct comparisons between both?
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For example, wills can be used to appoint a guardian for a minor, while a trust can't be used to appoint guardians for minors.
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A conservatorship may be avoided in a will with a durable power of attorney which allows you to appoint a person of preference to handle your finances in the event that you become incapacitated.
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A trust, however, automatically avoids a conservatorship.
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The successor trustee that you appoint will be responsible for transferring your property.
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Wirtiform is the biggest online database of legal documents.
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We've got even more information about wills and trusts at the link below this video, so click the link and don't forget to subscribe for more weekly videos.
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Hey, there's a lot of videos out there talking about funding your living trust, and I have a few myself but no one talks about what types of assets you should not put into your living trust.
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Well, in this video, I'm going to break that down for you.
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All right, let's get started.
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All right, so, as I stated, when it comes to funding the living trust, we have this preconceived notion that we have to put all of our assets into our trust so they can bypass probate.
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However, there are some specific assets you definitely do not want to try to place in your living trust, because it can cause negative tax ramifications or, worse yet, it could bring liability to you.
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So what is the first asset that you should not be placing into your living trust?
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Well, that is vehicles, and I mean things like cars, boats, equipment, mules.
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I don't know, I'm joking there, but the fact of the matter is, is that anything that's a titable asset that is a vehicle, there's no point in putting it into a living trust, because when you pass away, it's very simple to transfer those assets to a beneficiary, meaning that all you need, typically, is a copy of a death certificate in order to transfer that item to another individual.
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So maybe you put it in your final instructions in your trust that you want your vehicle, your truck, for instance, to go to your son when you pass away.
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Just write it down there and then your successor trustee would then see that and then contact the DMV, get a copy of your death certificate and then transfer that asset or that vehicle over to the beneficiary.
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So that's the main reason why we're not putting vehicles in the trust, or the number one reason why is that you don't need to?
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Because you can transfer them without having to go through probate.
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Number one reason why is that you don't need to?
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Because you can transfer them without having to go through probate.
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Now, the second reason why I would not put my vehicles into the living trust is basically lawsuits, asset protection.
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You see, when you retitle your vehicle into the name of your living trust, you're just exposing the fact that you have a trust to a potential creditor.
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So let's assume that there's a car accident and the vehicle is titled in the trust name, that there's a car accident and the vehicle is titled in the trust name, I can guarantee you the plaintiff's attorney, if you're the one that's at fault or the person driving your car is the one at fault.
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They are going to name your trust as a defendant in a potential lawsuit.
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So if you want to keep your trust out of lawsuits that are related to vehicle type accidents or boating accidents, do not put those types of vehicles in the name of your living trust.
00:22:16.549 --> 00:22:17.744
Keep them in your own name.
00:22:18.267 --> 00:22:23.309
Now, the other reason, third reason why you don't want to put vehicles into a living trust has to do with insurance.
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You know it just comes down to this Insurance companies.
00:22:26.121 --> 00:22:41.005
They seem to get really confused when it comes to figuring out how do you insure a vehicle that's in a trust name, and so I tend to avoid placing vehicles of any sort into a trust, because people just can't figure it out.
00:22:41.005 --> 00:22:47.377
Now there are certain instances where, hey, you have to go around, you have to shop for insurer and you want to definitely put it into a trust.
00:22:47.377 --> 00:22:55.546
If you're looking for anonymity because you've had problems with people in the past and you just don't want that vehicle in your name, I get it.
00:22:55.546 --> 00:23:03.433
That would make sense, but keep in mind that insurance can be problematic when you're putting a vehicle into a trust.
00:23:03.694 --> 00:23:07.464
Okay, now what other types of assets should not go into a living trust?
00:23:07.464 --> 00:23:09.269
Well, annuities, all right.
00:23:09.269 --> 00:23:16.112
So annuities are like 401ks or IRAs these types of assets stay outside of your living trust.
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In fact, they are trust agreements themselves.
00:23:18.944 --> 00:23:40.934
Most people are not aware of this, and so if you were to try to take that asset and change it over to your living trust and make that the owner of these assets, what you could be doing is creating a taxable event for yourself, basically a liquidation of the asset, and then, all of a sudden, you would have immediate tax consequences or you would invalidate the special nature of that particular investment that you're holding.
00:23:40.934 --> 00:23:45.307
So you want to keep your IRAs, your 401ks, your annuities.
00:23:45.307 --> 00:23:48.173
Do not place them in a living trust.
00:23:48.173 --> 00:24:07.028
What you'll do with those types of assets, though, is you'll list your trust as the beneficiary, so when you pass away, then those assets would automatically be paid over to the trustee of your trust, or they'll continue on, under the control of your trustee, to be paid over to the beneficiaries of the trust.
00:24:07.450 --> 00:24:32.144
Now, when it comes to 401ks and IRAs and holding those in your trust after you've passed away, it's very important that you set up your trust with explicit provisions on how you can stretch out the control of those assets after you've passed through your trust, and this comes into play when you have younger beneficiaries, for instance, and you don't intend to leave them the asset outright.
00:24:32.144 --> 00:24:55.229
So this is a huge mistake that I find with a lot of individuals that we work with on the estate planning side is that they have their 401k or their IRA and when they opened up the account they were asked to designate a beneficiary, and many times what they'll do is you'll list your spouse as your initial beneficiary and then there'll be another line for you to list an alternative or contingent beneficiary if your spouse is no longer living.
00:24:55.229 --> 00:25:18.821
So people will think, all right, well, I want it to go to my kids, and so they'll list their children's name down as the contingent beneficiaries, not thinking about the fact that maybe in your estate plan your kids are not going to receive your estate assets until they hit 45 years of age or some age of maturity years of age or some age of maturity.
00:25:18.821 --> 00:25:28.587
But if you were to pass away and your children were 23 and 24 and you have IRAs and 401ks with $600,000 in total value, the children would receive those assets outright if your spouse was no longer living.
00:25:28.587 --> 00:25:41.305
Maybe you and your spouse are both killed in a car accident, for example, then these assets would pass outside of your estate plan example, then these assets would pass outside of your estate plan.
00:25:41.305 --> 00:25:54.390
So, with IRAs and 401k plans and annuities, yes, they operate outside of the estate plan, but we make the estate plan, the living trust, the beneficiary, and we give that control over to the trustee to ensure that those assets get distributed out in a responsible manner per the terms of your trust.
00:25:54.931 --> 00:25:58.663
Now, another asset that I would keep outside of my living trust is my life insurance.
00:25:58.663 --> 00:26:19.684
So this is another example where life insurance you can name a beneficiary does not have to go through probate, and so that's one of the things that we always look at when we're thinking of assets that we either place or not place into a living trust is that if you can bypass probate, then there's no need to put that life insurance into the trust.
00:26:19.684 --> 00:26:40.501
What you could do, of course, is name your spouse, just like you did with your 401k as your primary beneficiary If you're married and then have your trust named as the contingent beneficiary, so then it would receive the life insurance proceeds if your spouse was no longer living, and so I think that's a preferable way to do it, or, if you might want to consider this.
00:26:40.501 --> 00:27:11.305
If you have life insurance and it's of considerable value and you live in a state that has a very low estate tax meaning that if the value of your state maybe is over $2 million and you have a $2 million life insurance policy, maybe you ought to consider setting up an irrevocable life insurance trust, actually putting that life insurance policy into a trust to make sure it's not included in your estate, so it would not go into your living trust, but it would go into its own separate trust.
00:27:11.305 --> 00:27:17.185
That is, to avoid being included in your estate for estate tax purposes.
00:27:17.861 --> 00:27:22.432
So those are the main assets when it comes to funding the living trust that you should keep out of your living trust.
00:27:22.432 --> 00:27:23.766
Put everything else in, of course.
00:27:23.766 --> 00:27:29.248
It's important you get your trust fully funded, otherwise you will, or your estate will, end up in probate.
00:27:29.248 --> 00:27:41.651
For those assets that are not in there but the ones that I went through easily pass outside of probate you just want to make sure you have the proper beneficiary designation so that your estate plan goals are carried out appropriately.
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