Ep. 17: Nailing the Essentials: 10 Must-Discuss Topics for Married Couples Before Meeting an Estate Planning Attorney
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Have you yet found yourselves discussing estate planning and elder law basics as a couple? It's time to get serious about these critical topics, and Attorney Ted Gudorf is here to guide you through it all. He covers everything from having a conversation about your estate plan goals, to sharing information about assets, income, and debt, and even deciding whether to own assets separately or jointly. He also dives into planning for incapacity, long-term care insurance, and the many options available to couples looking to protect themselves and their assets.
In the latter half of the discussion, Ted uncovers the often-overlooked topic of tangible personal property and its sentimental value. Did you know that family disputes over these items are often more intense than those over money? Ted shares tips on having a plan for these items, avoiding family disputes, and making important decisions about beneficiaries, trusts, and end-of-life care.
Our host reminds us of the importance of having an estate plan in place sooner rather than later, and shares resources to get started with the process. After all, the time to repair the roof is when the sun is shining!
- Having the Estate Planning Conversation with Your Partner (1:17)
- “How do we want to own assets?" (3:52)
- How to Handle Incapacity (4:13)
- The Conversation Around Long-term Care (6:54)
- How to Handle Your Personal Property after Passing (8:55)
- Assigning Beneficiaries (11:18)
- Charitable Contributions Upon Death (16:59)
- Wrap-up (17:36)
- Gudorf Law Group
- The Ohio Estate Planning Guide - Free Book
- Gudorf Law: What We Do and How We Help Webinar
- Don't Go Broke in Nursing Home Workshop
- When a Loved One Dies: A Legal Guide - Free Book
- Subscribe on YouTube
Transcript: Prefer to Read — Click to Open
Hello everyone, my name is Attorney Ted Gudorf. Welcome to the Repair The Roof podcast. This name comes from President Kennedy’s famous quote, “The time to repair the roof is when the sun is shining.” In this show, we help individuals and families learn more about all things estate planning and elder law. Today, I have the good fortune of being able to talk to you from beautiful Siesta Key. We are down here for some rest and relaxation. I tried to spend a couple of months at the beach, but while I am here, I also like to record some podcasts and get some more information out to all of you.
Today’s topic is critically important. Before I get into this specific 10 topics that couples have to discuss, want to talk about just from a big picture standpoint, what I see most couples really needing to focus on. You know, I have met with 1000s of married couples, and have helped them plan their estate. Here are just a few tips. First of all, it is extremely important that the two of you get together and have at least a brief conversation about what your goals are for an estate plan. What are you really trying to accomplish? Do you simply want to make sure that you have a plan in place so that if one of you becomes incapacitated or dies, that there is some plan in place?
Number two, do we want to make sure we avoid probate? Do we want to save taxes? Do we want to provide for some long-term care? Where do we want to live in our retirement years? If we need to go to a facility? What does that look like? What are those arrangements? So overall, we should have a brief conversation about what are our goals number one. Also, to follow up on that it is important for a married couple to share information with each other to make sure that both the husband and wife are on the same page with some real basic things. What is your balance sheet look like? What assets do you owe? How are they currently titled? What is your income look like? What does your debt look like? Have you had that conversation?
Now let’s get into some specifics. Some of my couples, in fact, I would say most of my couples have assets titled multiple ways before they come to see me and they really do not have a whole lot of understanding about the significance of what that means. So have you taken the time, watch your inventory, what you own. To figure out whose name is it in? Is it in the husband’s name? Is it in the wife’s name? Is it in your joint names? And that is how you’ve handled things in the past and most couples come to me and they will hold things individually, they will hold things jointly. Well, what is your plan? Does it make some sense for you to continue to hold your assets separately? Perhaps in, say separate trusts for different reasons? Or are you at a point now where it makes some sense to make sure that everything is held jointly, perhaps in a joint trust?
So issue number one that I think you need to discuss is how do we want to own assets? Do we want to own them separately or do we want to own them jointly with the understanding that certain assets have to be owned individually that may include a retirement account, that may include a life insurance policy.
Issue number two, once we discuss how we want to own it, we want to talk about incapacity planning. We should at least have some common understanding, some common ground that says if one or both of you become incapacitated, who is going to manage our affairs, number one? Number two and probably more importantly, who is going to provide the care? Are we going to have care provided at home? What about assisted living? What about a nursing home? What are our overall goals and what are our overall expectations? Are we expecting each other to care for the other during any period of incapacity? Are we planning on there being any help? How are we going to pay for it? Should we be exploring long-term care insurance. It’s one of my favorite topics to talk to married couples about, my average couple does not buy long-term care insurance until they are over 65 years old and that may come as a surprise to many of you, it does to folks I talked to, to realize that you can get to a point where you can be 65, 68, 72 and still have some viable long-term care insurance options. I will give you one example that I recently had, with a 60-year-old couple. They thought they had missed the opportunity to buy long-term care and I showed them an opportunity that they could use one of their IRAs to cover both of them in a single policy and if they never used the policy, all the money that they paid in premiums plus some earnings would go to their children if they never used the policy. On the other hand, because they were 60 years old and in reasonably good health, if they put $100,000 into the policy, they would receive in excess of $300,000 worth of long-term care benefits and of course, they thought that was not possible. So do you have a long-term care plan? Is it to stay home as long as possible? Is it to provide care at home and if so how are we going to pay for it? Do we need to consider doing Medicaid planning either because we are not healthy or perhaps we don’t have the money to invest in a long-term care policy, but topic number two is have a general discussion about incapacity planning.
Topic number three just delves right back into that long-term carry issue that we have to have that conversation about. So it’s not only who is going to be in charge, but how are we going to pay for it and is it going to be out of pocket, are we going to insure the risk, are we going to rely upon government benefits, whether it be Medicaid or VA benefits to pay for our care. Also have some conversation about whether we are comfortable with a will based plan where we know in the event of incapacity or death, we’re likely to end up in the probate court process, but it is fairly easy to me at least during our lifetime and it pretty well leaves the major work to the executor of the estate to handle once one of us or both of us pass away? Or do we want to be a little bit more proactive and have a trust based plan and perhaps include multiple trusts, maybe both a revocable and an irrevocable trust and what should frame that conversation? Well, I just tell all my clients if one of your overall goals that you discuss is to keep matters out of the public limelight, that is you don’t want your estate to be public if you become incapacitated or die, if you want to minimize the time period you have to spend down at probate court and if you want to minimize the cost once you get the plan set up, you are far better off doing a trust based plan than you are a will based plan.
On the other hand, a will based plan is pretty simple to set up, it’s pretty easy to do and that’s because it leaves all of the hard work to be done once somebody becomes incapacitated or dies. Obviously, the costs increase because a typical probate after somebody dies can take up to say two years for it to be handled. So have a conversation of where you are at with will versus trust, have some general understanding of what that topic means.
Let’s talk a little bit about once one of you passes away, how do you want your personal effects taken care of and in particular, let’s talk about sentimental value personal effects. All of us have tangible personal property and oftentimes during the course of estate planning, it’s overlooked and we focus more on the brokerage account or the bank accounts, but we don’t deal with that tangible personal property. It can include anything from a car or a boat or a jet ski, but it can also include some sentimental things, perhaps a baseball card collection, perhaps a wedding ring, a diamond ring, a family heirloom that was passed down from your great grandmother. These items of tangible personal property have to have a plan in and of themselves. I tell everybody I have seen more family fights over tangible personal property than I have over money and it is in large part because folks ignore them when they are going through the planning process. My advice, don’t ignore them. If you got a gun collection, if you got a coin collection, if you have wedding rings, if you have family heirlooms, let’s make sure we understand what your expectations are when you pass away. So, a lot of couples come to me and say, “Well, you know, having this conversation has really encouraged us to start giving things away now” and that is certainly fine, but if you don’t get that accomplished, do you want your wedding ring to go to your spouse, in other words, does everything you own go to your spouse, and then your spouse can do whatever they want with it or if at the time you pass away, you want your wedding ring or your collection to go to a particular son, or daughter or grandchild or friend, then we need to specify where those tangible personal property items are going to go. Spend some time talking about debt? What do you want to go into whom and when, that is critically important, because these tangible personal property items oftentimes have an awful lot of sentimental value. Well, in addition to talking about tangible personal property, then we should have a conversation with each other to discuss who our beneficiaries are and once we identify who they are, I mean, it might be as simple as we’re going to give everything in equal shares to our children, and that’s fine, but oftentimes, couples are coming in and wanting to make gifts to someone other than their children, or perhaps in unequal shares to their children. Maybe you want to include your grandchildren, have you considered giving a specific gift to them? What if they’re minors? How are we going to give them that gift? Also, we want to have a conversation about whether we do or don’t want to continue on with any charitable gifts. So who are our beneficiaries? What percent of our overall estate do we want them to have? Are there other beneficiaries where we want to make a specific request of an item to or a specific dollar amount? And lastly, do we want to give our beneficiaries what they are going to get in trust, or simply give it to them outright? Just remember, we encourage folks, if they’re going to give a significant amount to a beneficiary, that they consider doing it in trust that is they do some multigenerational planning. What are the advantages of giving somebody something in trust versus outright? Well, if it’s given to them in trust, and it stays in trust, yet they have access to it, then just remember, it is protected. It is protected if they get divorced, if they get sued, or have a creditor claim, if they go bankrupt, if they themselves need to go on Medicaid in any inheritances in trust, it will not be counted against them and also should they die, it will pass to their descendants more likely than not, rather than to any spouse and generally, that’s what folks want. Well, if you give assets that you have upon your death, to your beneficiaries in trust, it will continue to be protected. On the other hand, you may want to just give it to him outright. Just understand that if you give it to him outright, then there will be no protection.
You should also have a conversation about end-of-life. That’s critically important that the two of you be on the same page. In particular, you want to talk about whether you do or don’t need to have a living will. What’s the difference between a living will and then we want to talk a little bit about a health care power of attorney? Well, the living will simply states what your wishes are in advance of whether you do or don’t want extraordinary measures used to keep you alive in the event that you are terminal, or permanently unconscious. If you state this in advance through a living will, you are giving your physician, your attending doctors the ability to terminate any of these extraordinary measures that have begun or to not initiate them because you have said if I am in one of these two conditions, I don’t want anything further to be done. Typically will also include authorizing them to withdraw intravenously provided nutrition and hydration. Have a general conversation. Do you want a living will and you want to put that in the hands of your physicians. On the other hand if you decide you don’t want to put it in the hands of the physicians, you can put it that end-of-life decision along with other medical decisions in the name of your health care agent, by creating a healthcare power of attorney who is going to serve as your agent under your health care power, presumably, if you are a married couple, it is going to be each other. But once you have identified each other, who’s going to be next, and we would ask you to identify at least three if not four additional individuals by name, address, phone number, on the health care power of attorney, so there is a clear line of individuals who are selected so that we know who you want to make those medical decisions for you.
Just like our medical decisions, if we set up a will, we would have an executor, or if we have a trust, we are going to have what is called a successor trustee, you should have some understanding of what each other is thinking with respect to your finances, should you become either incapacitated, or when you die? Are you in a situation where you are simply going to need each other in the event one of you becomes incapacitated or dies, the other will simply be in charge. That’s pretty typical, pretty standard, but what happens if the surviving spouse either does not want to or is not capable of managing any of your affairs? Who do you want to designate under your power of attorney as your agent, and typically, we will want that same person to be your successor trustee under your revocable trust, or under your irrevocable trust and we are also going to want that person to be your executor under your will. Bottom line is have a conversation about who each of you trust to be in charge, critically important!
Lastly, I think the topic of making charitable contributions upon your death is oftentimes ignored and not talked enough about by couples. Many of my clients do make charitable contributions, even if it’s a small amount. Sometimes those charitable contributions can be contingent. In other words, if one of the beneficiaries passes away, then a charity will receive funds, but have a general conversation about who your charitable beneficiaries are. I think that’s critically important. I can’t tell you how important it is, you are on the right path, I want to really encourage you to have this conversation with each other. It will help you develop some clarity that will help you develop some confidence, it will eliminate any consternation or frustration with the process, it will make the process go much smoother if you have had this prior conversation, particularly if you have done a client organizer, and shared that basic information about your assets and your income with each other, you have an overall conversation about what are your goals and then once again, you go through these 10 topics.
Do you want to maintain your assets separate or jointly? Do you want to develop an incapacity plan and in particular, identify who is going to be in charge in the event of your incapacity? How you are going to pay for it and if you need to go to a facility, what does that look like? Talk briefly about long-term care and whether you want to explore those opportunities assuming you are in, and have funds to do so. Do you want a will or a trust? What about your personal effects? How are we going to plan for those personal effects? What about those sentimental items? Who is going to get them and when? Let’s talk a little bit about your beneficiaries? Who are they? What percent are they going to get and is it going to be outright or in trust? Then move on, let’s talk about do we want a living will? If not, are we going to do a healthcare power of attorney and if we are, who is going to make medical decisions for us if we can’t make them for ourselves? Lastly, we want to talk about who is going to be our successor trustee. In the event both of you become incapacitated or die, who are we going to put in charge of your finances? Not only will they serve as successor trustee, but typically they are going to be the agent under our general power of attorney, and then lastly, let’s talk about some charitable beneficiaries and do we want to give something back at the time that we pass away?
Well, I hope you find this discussion to be meaningful. I hope you find it to be helpful. I really want to encourage you don’t procrastinate on your estate planning, come together, go see an estate planning attorney and let’s get this work done before it’s too late because just remember what I always say. The time to repair the roof is certainly when the sun is shining. We learn that every single day in our practice. Well, I hope you have a great weekend and a great week upcoming. I look forward to seeing you in the near future. Thank you so much.
Until our next session, just remember the time to repair the roof is when the sun is shining. To get started with your estate plan, you can go to gudorflaw.com/getting started for a free copy of our recently published book called The Ohio Estate Planning Guide, go to gudorflaw.com/book.