BiggerPockets Money Podcast - 532: Building Generational Wealth? Don’t Lose It with This ONE Critical Mistake

Episode Date: May 28, 2024

You’re working hard to build wealth, but without estate planning, your assets could easily land in the wrong hands, causing your family a great deal of trouble. No one likes thinking about their death, but you NEED to tackle this issue head-on if you hope to preserve your legacy! Welcome back to the BiggerPockets Money podcast! Today, we’re tackling two of the most taboo topics—death and money—with estate and elder attorney Jenny Rozelle. If you’re nearly ready to retire, you MUST develop an estate plan. Otherwise, intestate succession laws will determine your fortune’s fate. Even if you’re young and have little to your name, there are basic steps you can take today to ensure that your current and future assets don’t go to the wrong person. In this episode, you’ll learn how to find the BEST estate planning attorney and prepare for your first meeting. Jenny also shares the truth behind probate and why it isn’t nearly as painful as it sounds! Stick around for part two, where we rapid-fire estate planning questions at Jenny as she shares information even we didn't know about! In This Episode We Cover Basic estate planning documents every person needs (regardless of age) What really happens in probate court (and why it’s NOT as scary as it sounds) Intestacy explained, and how to stop your assets from landing in the wrong hands How to make sorting out your estate as easy as possible for your loved ones And So Much More! Links from the Show BiggerPockets Money Facebook Group Network with Other Investors on The Path to FIRE Through the BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Scott on BiggePockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Find an Investor-Friendly Agent in Your Area Find Investor-Friendly Lenders Property Manager Finder BiggerPockets Money 397 - Estate Planning, Wills, and What to Do NOW to Protect Your Heirs BiggerPockets Money 401 - The Post-Passing Plan: 3 Steps to Protect Your Family’s Financial Future BiggerPockets Money 503 - How to Keep MORE of Your Inheritance From the IRS (Avoid These Tax Mistakes!) 00:00 Intro 01:27 Why You NEED an Estate Plan 07:52 Finding an Attorney & Probate 101 18:10 First Steps for Early Retirees 24:56 Getting Organized & Estate Planning Costs 37:00 Connect with Jenny! 37:29 Start Planning Today! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-532 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

You've worked hard or are working hard towards building your retirement and generational wealth. So how will your financial legacy carry on after you're gone? Do you have a plan? Who will carry it out? Hello, hello, hello, and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen. And with me, as always, is my four informational and educational purposes only co-host, Scott Trench. Hey, Mindy, great to be here.

And forward to seeing you get into a state of flow talking about your favorite subject today. As always, Bigger Pockets has a goal to make one million millionaires, and that starts right here with us in a strong financial foundation because we truly believe financial freedom is attainable for everyone, near either when or where you're starting or where you plan to finish. Today, we have an estate and elder attorney Jenny Roselle, who has a decade of working in this type of law, here to share with some levity how important estate planning can be for your financial legacy. Jenny Roselle, welcome to the Bigger Pockets Money podcast. I am so excited to talk to you today. I know. I'm excited to have people that actually have this, like, same energy as I do. So it's very refreshing to be on the same screen with you guys. This is going to be awesome. Even though we're talking about end of life and plans for what happens with your money afterwards,

this is something that I think everybody needs to be thinking of, even though nobody wants to think of it. So, yay, this is going to be a great show, though, I promise. You should really, really, really, really, really listen to this because we're going to teach you a lot. Jenny, we've had guests of it. our show, tell stories about the consequences of not having a will or an estate plan. Can you share a cautionary tale that's ingrained in your memory so that we can paint a picture for our listeners of why having a plan in place is so important? My goodness.

I have so many. So I'm going to kick a question back and say, do you guys want one that is not like, that doesn't happen like hardly ever? or do you want like a more like, okay, this is more of like a real life one that happens all the time? We're going to have to do both. Yeah, I was going to say, I want both. Yeah, let's go. What happens when someone passes away, if you do not have an estate plan,

there's these really funky rules and laws that apply that are called intestacy rules, which sounds like something from anatomy class, but it's intestacy rules are part of the, all of our state laws. So it's just a fancy word for when people, die without a will. And what I always tell people is intestacy laws are really, like, not intuitive. And so the amount of cases I've seen where someone has passed away, and here in Indiana, if someone passes away without a will and you're married and have kids, half of the estate goes to your spouse and half goes to your kids. Things change when you are a subsequent spouse. So like this is like

your second or third or fourth spouse. So that really surprises a lot of people. You think that, just everything would go to your spouse, but it doesn't. It would go 50%. If it's your first spouse, 50% to your spouse, 50% to your kids, which surprises a lot of people. We talk about pre-nubs and post-nups on BP money. I think it was Aaron Lowry who said, you have a pre-nup or a post-nup. Yeah. It's the laws of the state that govern what happens to assets in the event of divorce, for example. And it sounds like the same thing applies here. You have an estate plan. It's the law, this inter... Intestacy.

Intestacy. It's these intestacy laws of your state that are going to govern what happens to it. That's your state plan if you don't go through this exercise, right? And if you don't know what those are, you don't know what your state plan is. Yeah. So it's either do you want to be in the driver's seat or the passenger seat? Decision's yours. That's a great way.

I found this out in Colorado. A friend's husband passed away unexpectedly with. no will. And in Colorado, it is the first 300,000 of the estate goes to the spouse. And the remainder of the estate is 75% the spouse, 25% the decedent's parents if there are no children. Yep. There's some funkiness there. Yeah. And that's like the takeaway there is everyone would think it would just, oh, go to your spouse. That's usually not the case without a will. And every States different. We are only the United States for some things. And we're not the United States when it comes to intestacy. So, okay, Jenny, you alluded to a juicy story. The juicy one.

So I have worked on a case where there was a couple. My dad had, I don't want to say the number of kids, so it's not identifying, but a few different, a few kids. One of the kids was a bit of a troublemaker, that child ended up murdering his parents, both of them. Had there been an estate plate in place, they could have, you know, disinherited him or put some provisions around maybe even how he inherits. There's also some weird laws called Slayer statutes where they also prevent someone from murdering and inheriting as well. But I use that as kind of a juicy example, more from a place of like, clearly there's a strange relationship there between parents, and this child. And there are so many different types of planning mechanisms in my world to support

even those strained relationships, whether we disinherit someone or even if we just like provide maybe like a staggered distribution to them. Yeah, people think my estate world is boring. But my goodness, I have seen and worked on a lot. Wow. That is not what I was expecting from Juicy. That's terrible. Well, let's get into like who and when you should begin worrying about. estate planning. When I'm zooming back, I'm 23 years old, have no assets, and I'm just getting started in life. Do I still need to be thinking about estate planning then? What's your take on that? Yeah, I think that, of course, there's different levels and types of estate plans. And I think that that's kind of the confusing part of my world is, you know, people say estate planning so

freely and loosely. I would consider it very important for an 18-year-old to 18-plus, because That's when, you know, people are considered an adult. They should absolutely have very basic documents like health care power of attorney, health care directives, and a financial power of attorney. I have done so many of those very basic documents for, I'm going to call them kids because they're kids at that age still, for kids that are going to study abroad or going to college and maybe they want mom or dad to be able to make health care decision, decisions for them, if something happens to them, say, for example. A lot of people don't think about

estate planning that young. Technically, that's a state planning. But by far, like what you just said, Scott, I think a big trigger usually comes when we've got minor kids. And then definitely another big trigger at retiring and as we age as well. And of course, those planning just become more complex and as we age, of course. But yeah, it's kind of for anyone above the age. of 18, a lot of people don't realize that, but they'll sure realize it if something happens. They don't have people in a position to, you know, make decisions for them if something happens. All right. I want to get more into this estate planning process and what it's like for early retirees specifically and hear more about the process of doing this. But first, we need to hear

a quick word from our show sponsors who make this show possible. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one

dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all in one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year. That's 50% off at Monarch.com code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun, calculating quarterly estimated taxes, but somehow every small business owner ends up

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Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leaner Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful as its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive.

back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP Money. All right, welcome back. We are here with Jenny Elder Law and Estate Planning Attorney. Let's dig in to the process of estate planning.

Jenny, how does one start? and let's specifically talk about somebody who's an early retiree or on the cusp of early retirement hasn't thought about this before. What do we do? What are the very first steps to begin going down this rabbit hole? So if I start from the very, very first step, you have to find someone, right? You have to find an estate attorney. Kind of a, I'm going to call it an annoying thing about the legal profession is that we're only allowed to help people within our whatever states that were licensed in. So if you have like a, best friend Sally that, you know, is an attorney that practices in, say, the state of New York, but you live in the state of California, best friend Sally is not going to be able to help you.

So step one is to find someone that is licensed in your state. A big bugaboo of mine is that law school just kind of cranks out these attorneys without requiring any kind of specialty. When you go to investigate someone to work with, you should find someone that this is what they do day in and day out. If you go to their website or their bio and you see that they dabble in a little this, little that, little this, little that, they may not be the best resource to help you because that's not the world that they live in every single day.

So I think the first step is trying to find someone that is qualified to help you, but also that you like. Estate planning is usually a relationship. It's not usually a transaction. So it's really important to find someone that you, in terms of. working with. And then really from there, I mean, attorneys really vary from a, from a process standpoint. There's always a going to be kind of an introductory, like, blind date. Like, who are you, who am I? What are you trying to accomplish sort of thing? From there, you know,

it's gathering the data and the facts to incorporate into these documents and ultimately get them signed. I don't know if that's what you were looking for, Scott, but that's kind of where my head went when you asked that. I want to reframe the question a little bit because I think that that's helpful, but it's just, far down the pipeline, I guess, like, what am I looking to accomplish within a state? You mentioned power of attorney over various things. So I'm not thinking just about what happens to my assets when I die. I'm thinking about other things there. So like, can you maybe give us like a checklist of things that are that are good outcomes of an estate plan? What decisions are made? For sure. So

a good estate plan is going to help someone in the event something happens while they're alive. may not be able to make their own health care decisions or make their own financial decisions. And then in addition to that, after we pass away. So a really robust estate plan is going to address not only after we pass away, which is a lot of what people think that they're, you know, just going to get their will in place in case something happens to them, where estate planning is really about what if something happens while you're alive, you're still living, but maybe not in a position to manage your own affairs, make your own decisions. And so these documents health care, power of attorney, financial power of attorney, those are documents that really govern while we're

living and support us in the event something happens. And we're still living, but we need someone to step in and help us. I think that folks are interested in those, but probably listening and are watching with the intent of understanding how to disperse their assets. At least for me, things that come to mind there are, one, yes, making sure that they go to the right places. But I think also, like, let's say that I'm fortunate enough to have several children over the few years, like, making sure that like, oh, my passing does not create a huge conflict among future, like, adult children. Like, I don't know if that's what other people are thinking, but like that's like top of mind for me is like making that clear. And so I'm wondering,

like, how does one do that good? And, you know, what decisions do we make? And I think also in the context of that question, I think a lot of people, perhaps like me, are thinking, I may, I don't plan to pass away anytime soon. So I may have a large estate in 50 years if things go well, because I'm, you know, arrogant and talk about money all the time. I think I'll probably accumulate a lot of it over my lifetime. So do I pass that all this large potential theoretical future pile of money to my children? Or do I say, no, I'm going to give you enough to do anything, but what was it Warren Buffett says? I'm going to give each of my children enough to do anything they want,

but not enough for them to do nothing. What are some general frameworks of advice that you would help give people to guide this discussion and then the process to spit out that outcome? Yeah, I think that the most fun part of my job is every single person that sits in front of me comes with different family dynamics, family setups, different types of assets, different types of goals. But if I really kind of take all of them and sort of, you know, bring them up to a 50,000 foot overview,

hands down, every single client, every single person wants to make it easy on their family. The difficult thing from my seat is people define easy for their family in different ways. And what I mean by that is, you know, I have sometimes clients will come to me and say, Jenny, I want to make sure I avoid the probate court process after I pass away. What I find, a lot of people say that, and they don't even understand what the process is,

but their uncle Bob told them that that probate court was the worst thing, you know, the worst nightmare come true. And so I consider it my responsibility to really kind of peel back that onion of like what's prompting the client, the person to say that. And from there, really guide them into what they're, the options are to satisfy those goals that they're kind of spitting out to me. Because sometimes people will say, I just want to make it easy on my family and they follow up with that.

Maybe I can accomplish with a very simple basic plan that does not involve any kind of trust planning, that maybe we're just using a very basic last one testament, maybe some beneficiary designations. Sometimes people will say, Jenny, I want to make it really easy on my family. and I want to avoid the probate court process because I want to, you know, alleviate the fees that that's going to occur on my family. That may be looking at trust planning. So it's a hard question for me because it usually,

that's usually what people are saying that they want to make it easy, but people mean different things when they say that. And so from there, it's just a matter of what options on the table make sense, for them, depending on their age, depending on their assets, and depending on how much of the elephant they want to eat all at the, you know, all at one time. So can you clarify what probate court is for us? Because I kind of know and I kind of don't know. Yeah. It cracks me up when people like, bulldoze their way into my conference and then they're like, I want to avoid probate. And I'm like, tell me what you think probate is. And they don't know. The probate court process happens when someone

passes away and if they, if their assets are being governed by their last one testament, or their assets are being governed by those funky intestacy rules that we were talking about earlier, then probate court process has to happen if those assets exceed a very certain amount. Every state has a different amount. So I don't want to say a certain amount and, you know, someone misconstru. But every state has a different threshold. If the person exceeds that threshold when they die, we have to go through the probate court process to get the assets from the deceased person to their beneficiaries. I always tell people, probate is not that scary. People will, a lot of professionals will try to make it seem like it's like the most, the worst thing, you know,

ever. It's just more annoying than anything. There's three non-negotiables. There's three non-negotiables. about probate that I always tell people that if you don't care about these three things, then probate's not going to be a big deal. But if any of them are, you know, concerns or, you know, keeping you up at night, then maybe we need to talk about how we avoid probate. So the three non-negotiables just to kind of quickly spout them off. One is it takes time. It varies by state, but I can tell you that you're going to be hard pressed to get through a

probate process in less than a year in Indiana. I know some states are much longer. I know some states are shorter. But nonetheless, there's always going to be a delay on getting assets from the deceased person to the beneficiaries if we're going through that probate process. So that first one is delay or time. The second one is that it's public record. So if you have someone that may be very private in nature, that doesn't want their nosy neighbor Nancy to see what's going. through the probate process, then maybe we need to look at how we avoid the probate court process.

The third one is, and by far is what warrants the most concern are the legal fees. I promise I won't go on this soapbox. But long story short, with probate, you have to have an attorney to go through that process. And it's kind of like textbook monopoly. My only competition are other estate attorneys. And so a lot of times lawyers can kind of get away with charging a pretty penny to go through that probate process. So those are the three non-negotiables, time, public record, and cost. If none of those are causing you to lose any sleep at night,

then it is what it is, and we can go through probate, and it won't be that, it won't be scary. It'll just be kind of annoying for them to go through. But otherwise, if any of them, you have concerns around, then we need to look how to perhaps avoid that. I think that's really good to hear those concepts about avoiding probate. I'm still kind of stuck on like what what does good look like in the context of making it easy for my family here? And like I'm the kind of person, maybe some people listening are too, who's like, I don't want to just like show up in a state attorney's office and like say, tell me how let's let's begin. Tell me, let's start from the beginning. You tell me drive.

I want to drive the conversation or at least have a hypothesis coming in that then I can bounce off that person and get feedback on. And so, like, to me, for example, good includes things like, okay, I have decisions made around all of this, a lengthy checklist of like, what's going to happen if I become disabled or not capable of making decisions? What is going to happen in the event if I pass away? Like, what's the funeral arrangement going to look like? I don't want, like, other people having to worry about figuring that out when I pass, right? So checking off a long list of those things. Then it's about what happens with assets and where do they go. Do they go directly where I want?

How does that compare with the law and people's expectations? that are around me, what are, like, decisions that I should come in with a good framework around prior to meeting with my estate attorney? I think first you need to identify people around you that you are perhaps going to put in some estate planning roles. So, you know, doing your due diligence of, you know, before you walk into that attorney's office, look at kind of the people around you that are close and who you would trust to make health care decisions for you if you weren't unable to make them for yourself or who you would trust to pay your bills and make financial decisions if you were unable to do so. So I think one thing that, you know,

listeners can take away is to really kind of look at the people around you and look at them very honestly. One thing I, that it kind of makes me squirm when when clients will say, oh, I'm going to put Susie in that role because she's the oldest. And in reality, Susie may be not great with money or whatever. She's maybe not a great fit for that role, but because she's the oldest, people will think that they need to put them in these roles. And so I think, you know, just making sure you look at the people around you to see who you feel comfortable putting in some of these roles.

Because the thing you have to understand is none of these are kicking in. really until something's happened, whether that something has happened and you are living, but unable to take care of your, you know, affairs or after you've passed away. So it's a, it's a high amount of trust and confidence that you're putting in this person. So once you kind of look at the who, a second thing that I think you could go into the conversation with or kind of considering is, you know, whether or not you want to do any kind of customized distributions. So, you know, as you were talking earlier, Scott, you have some kids. I work with a lot of families that want to put provisions in place for kids to inherit

at various ages. So I think, you know, what I always tell people that the nice thing about an estate plan is it's kind of a blank canvas. And whatever they want, whatever they being the client, being the, you know, person that's doing this estate plan wants to have happen, someone like me can make happen. There's very, very, very few things that we cannot do because case law tells us we can't do them. But otherwise, like, 99% of things I can make happen. So it's, I think it's really just an analysis of who around you, you feel comfortable in these roles as well as like, okay, when I pass away, who do I want to inherit?

And how do I want them inherit? And really from there, it's, it's, I mean, that's what I look at it from a conversational standpoint. If I am hearing you correctly, I need to contact an estate attorney licensed in my specific state that I live in now to craft, help me craft my estate plan, which is not just a will. It is a series of documents that will help direct my end of life treatment, my end of life if I'm not able to make decisions, or if I am suddenly passed away, it will dictate where my assets go. Do I just need an attorney?

Do I need an attorney working in tandem with a CPA or a tax professional? Or is this something that an attorney can do all by themselves? An attorney can do them all by themselves. Though, if someone has a CPA or a financial advisor, the three of us are very used to collaborating for someone's estate plan. And in fact, I'm a firm believer that the three of us need to stay in our own lanes. And so, you know, I think it's really important that we stay in our own lanes from a place of like our lane is what we know best.

And so if I have, you know, say the CPA is saying, oh, Jenny, you know, the client wants to do that. But, you know, the tax strategy around that, you know, maybe less than desirable. But then the financial advisor may pop up and say, okay, I hear you CPA and I hear you, Jenny. And what I can do on my side of the table is I can minimize those taxes to accomplish both of what you're saying. So it's very much a collaborative effort. But I said that at the beginning, too, of, you know, an attorney can do it by themselves too.

Because a lot of people don't have an advisor in their life. A lot of people don't have an accountant in their life. I think there's definitely benefits of having a team of professionals around you. But I would be, you know, I'd be remiss if I'd be. it and recognize the people that don't have those professionals. And if that's the case, then I am, someone like me is very used to just kind of being all of those people for the client. Okay. And I think that's fair. I think some of our listeners, a lot of our listeners, me consider cost as a big factor when they're going into this estate plan. And I don't know

that that's really the right thing to be concerned about at this time. Although if it should cost me a thousand and somebody wants to charge me 50,000, you know, then I'm going to be a little bit concerned. Yeah. Yeah. Okay. What documents do we need and more challenges we may face is what we'll get into next after this quick word from our sponsors.

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Marvel Television's Wonder Man, an eight-episode series, now streaming on Disney Plus. A superhero remake. Not exactly what we'd expect from an Oscar winning director. Action! Simon Williams. audition for Wonder Man. I'm going to need you to sign this, assuming you don't have superpowers. I'll never work again if anyone found out.

My lips are sealed. Marvel Television's Wonder Man. All eight episodes now streaming, only on Disney Plus. Welcome back. We covered the process and some of the considerations and who you need. We're financially savvy, but there are things that we don't know

about protecting our financial legacy. Are there any tools you would recommend or some sort of filing system to be used so that we can get organized as we're going through the process and even before we reach out to the attorney? Oh, my goodness. Yeah. The more organized you can be in heading into that conversation or letting the estate attorney conversation be an, you know, inspiration for getting organized. You know, I can kind of stumble my way through. I don't enjoy it, but I can stumble my way through and get an estate plan put in place when someone is still very disorganized. You know, I'm very used to having people come in with like, I always call them like their Mary Poppins purse or like, you know, the big like box of, you know, it's like a banker's box

full of stuff. But I will say it will make my job and life significantly easier and able to focus. on way more important things if someone is nice and organized. And what I specifically need is not only up-to-date names and contact information for everyone, I say that because the amount of people that get like data births wrong for their own kids is kind of hysterical. But as well as assets, where those assets are, like I'm not talking about just I have bank accounts at Chase, okay, tell me what kind of bank accounts they are. Are they checking? Are they money market?

Is it a CD? Who's on the, who's on the assets? Is it one? Is it just one of you? Is it jointly held? As well as debts. And so I will take as much information as someone is willing to give me, because that's, like I said, going to make my job significantly easier, which that sounds self-serving and I don't mean for it to, but what that allows me to do is really get to what I really should be doing and talking with a client and, you know, helping them get this plan put together, not rummaging through a banker's box or the Mary Poppins purse looking for things. That honestly, sometimes people, when they're that disorganized, they lose track of things. And when you lose track of things, and when I say things, I mean asset.

The amount of assets that I have after someone has passed away that we flat didn't know about. It's often life insurance for whatever reason. And those will surface when we pass away and we have to kind of deal with them at that point. And sometimes dealing with them is not ideal because sometimes we're working with outdated beneficiary designations and things like that. So the more organized that you can get, it will just the bleed over of that will be. really, really good things. I feel, I think there's two kind of important considerations left to cover in a state planning, at least as I see it.

Maybe you have plenty more here. One is the price of this, of this exercise, right? And like, I just don't think it makes sense for like 23-year-old Scott to spend $2,500 on an estate plan. And I don't think it makes sense for someone worth millions of dollars not to spend a few thousand dollars on a great estate plan. What are the, can you give us a frame? work for how much to spend on this at different stages in life and how to go about it?

What I will say generally to specifically answer your question is that, you know, a very basic estate plan, which I consider to be the following documents, health care documents. So, health care power of attorney, advanced directives, a financial power of attorney, and a last one testament. That's always going to be more affordable and, you know, quote, cheaper than and when you start talking about trust planning. Now, trust planning comes into play when you start wanting to talk about, you know, customizing distributions to beneficiaries

or doing any kind of advanced tax planning or asset protection planning. That's always going to be trust planning. You're never, I shouldn't say never. I don't like to use the words always and never. I almost said you're not going to find an attorney that's going to do any kind of trust planning for less than a thousand,

know, less than, you know, in the three digits. I'm sure there's some out there. I don't know how they're keeping their business afloat, but nonetheless, I'll say it. You get what you pay for. Yes, totally. So trust planning is definitely, it's always going to be in the thousands of dollars. Of course, you know, someone like me here in Indiana, you know, I charge for, we have a flat fee schedule. We don't do anything hourly. Usually in the revocable trust land, that's going to be about three to four thousand. You start talking about asset protection trust planning, tax planning. That's usually in the five, six, seven thousand. And so usually you can find the more basic plans that I referenced before I started talking about trusts. Those aren't usually,

I mean, any, at least in Indiana, granted I have Midwest cost a living. I mean, less than $2,000. I would say in California or New York, you know, those states that have high, cost of living, those numbers that I just threw out there are going to be hard pressed to find. But do know that the more basic planning is always going to be cheaper than when you start talking about trust planning for sure. Who needs a trust and who doesn't need a trust or need to start thinking about a trust? Yeah. I am a firm believer in that not every single person needs a trust.

I'll never forget when I was in law school. my, one of my trust in estates professors used to always say every basic estate plan consists of a trust, consists of a trust singular. And I always think back to that because I'm like, I just really disagree with that. Like, you know, us talking about what, you know, Scott and I were just talking you know, someone 23 that, you know, was just trying to like survive and like, you know, buy diapers and not file bankruptcy. Like, I'm not going to, I'm not going to convince them to do a trust. I think if I, if I, if someone, you know, made me say who needs a trust, I think it really is more fact dependent. And so I look, it's not even asset dependent.

When people, a lot of people like, how much money, you know, do I need to have? And before I start looking at trust planning, I've done trust planning for someone that has $40,000. The fact of that case was that she really wanted to protect her $40,000 from the nursing home. to be able to leave to her kids. That is going to involve a trust, and it was that important to her to protect her assets that she was willing to do a trust, even though she had very modest assets.

I'm not a believer that it's asset dependent, it's more fact dependent. So kind of some flags that I look for are anyone that wants to do anything customized, like from a distribution standpoint. So you think minor kids, if they want to, you know, make staggered distribution based on age.

Or you think of beneficiaries that may be special needs or may have some personal issues going on. You know, think addictions or maybe we secretly don't love our in-laws and we want to protect it against a divorce. Or maybe we have a beneficiary that is a spinthrift and cannot hold a dollar to save their life. Any of those are usually going to warrant some very custom distribution language and that's going to be best served through a trust. Beyond that, a couple other facts that I look for is people that have properties in multiple states that is going to usually warrant a trust most days of the week.

Business owners usually are going to be best served by utilizing a trust. Those are probably good examples of what I mean by that it's fact dependent. And those are the kind of little things I am listening for while we're talking, you know, the client and I talking to identify if any of those things exist. and whether or not we want to be looking at any more additional planning. So I wish I could give like a crystal clear like it is when you cross over X, Y, Z, net worth, it doesn't really exist, though. I heard when you're over $40,000 and want to direct where your money goes more clearly,

that's what I heard you say, Jenny. That was a pretty extreme example. I was actually kind of trying to talk her out of it. I was like, man, I don't feel really great. about doing that. I think I gave her a heck of a deal too because she was so concerned about the nursing home taking her $40,000 that she, you know, worked her tail off for. And at the end of the day, what did I say earlier? Estate planning puts you in the driver's seat. And that's what it allowed her to do. I'm reading between the lines, but it sounds like you're saying I need to get an estate

attorney to help me with my estate plan. So I want to say yes to you, Mindy, but at the same time, Like, at the end of the day, I just want more people to have these documents in place. Whether you use an attorney or not, there's risks of not doing, you know, not utilizing an attorney. But I just want more people to have these estate plans in place. I think the latest statistic I heard was like 50 or 60 percent of people die without an estate plan. That's ridiculous. That's silly. And that's way too many people.

So if online platforms can help bring that number down in a way that, that does so in an okay way, then I'll be a fan of it. I have one last question here before we wrap up. Timelines. You told us that it varies by state. If you haven't figured all your stuff out and you decide to go with your state-sponsored estate plan. But if you've done this correctly, set up a trust or working with someone like yourself, how long does it usually take to get a state sorted out in the event of one's passing?

It will go as fast or as slow as the executor or trustee is going to work. I have worked on cases where the executor trustee deserves a little smiley face sticker because they are Johnny on, you know, Johnny on the spot of everything I need, everything I ask, and those things are very quick. Through a will, if we're going through probate, you know, of course, we're dealing with whatever the, you know, routine average probate cases. But I've settled a trust in, like, literally in my conference room in a single meeting where we can just transfer through online bank accounts, and it was incredible.

Conversely, like, if you think of, you know, a client that may have a lot going on, maybe there's beneficiaries in a lot of different states, we may have some unique assets, or maybe we're just kind of going through a good old normal, you know, administration process. That is going to go as fast or as slow as that executor trustee is going to work. So if you imagine someone that's going to drag their feet, that's going to take longer than someone that's Johnny on the spot. Okay. That's, well, that's fair. I think that it is unrealistic to expect this one meeting and done unless you use Jenny and have all the same circumstances that everybody else had. But that is, that's valid. It's going to take a little bit of

time. So don't go to the reading of the will thinking, okay, where's my big fat pile of cash? Yeah. Do you guys want to hear something? This will be a great way to end it. I always want to hear stories. Yes. The reading of the will is not a thing. It happens in movies and books. It doesn't happen in real life. Oh, man. I know. I know. I guess my John Grisham law degree isn't worth as much as your actual law degree. Granted, I've had where families have asked me to, you know, read the will, but it is not, it is definitely not standard procedure to do a so-called reading of the will. It does not, it does not exist in the real world. Thank you, Jenny, so much.

for your time today. This was so much fun. And we will link Jenny's information in our show notes. We invite you to post your follow-up questions in the Bigger Pockets forums, which can be found at BiggerPockets.com slash forums. Don't forget to tag Scott or me or both of us. And we will jump right in and give you the best John Grisham-esque answer we can find. For entertainment and informational purposes only. Thank you, Jenny. Thank you guys so much. It was a blast. All right, Scott. That was Jenny Roselle. and I learned so much from her, like I knew I would. I mean, I'm not really an attorney, even though I've got that John Grisham degree.

I learned that there's a lot of gray areas in estate planning and that DIY is probably not going to serve me best. I really liked that she shared health care power of attorney, financial power of attorney, trust planning. I think this is something that my estate plan needs, and I'm now going to go back and revisit my estate plan. How about two? What do you learn from this show? I think it was a great deep dive, and I learned so much about the ins and outs of this process here. It is a, look, we said at the beginning, you have an estate plan. It's the laws of the state where you pass away, right?

So it's either that or when you build custom. And there's like no right answer is what I learned to all of this. The right answer is to have a plan and make a decision about many different things and conditional scenarios that might happen between now and your passing about how you want your state to be distributed. But it's a, it's just a process you have to go through and think through and no substitute for a professional to walk you through all that. Yeah, absolutely. All right, Scott, should we get out of here? Let's do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench. And I am Mindy Jensen saying, show me out, Rainbow Trout. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Hajar Eldos,

editing by Exodus Media, copywriting by Nate Weintraub, and lastly, a big thank you to the Bigger Pockets team for making this show possible.