Business Innovators Radio - Interview with Ron Roberts Founder and CEO of Roberts Retirement Group Discussing Estate Planning for Retirement

Episode Date: December 13, 2024

Ron was born in Burbank California and grew up in the Mojave Desert. Being the first of six children born to deaf parents, he learned responsibility at an early age. His commitment to family and faith is unwavering. It’s the essence of who he is and the foundation of his business success. Living for a higher purpose and caring for others has always been Ron’s focus.After high school, he joined the United States Coast Guard where he learned about hard work, discipline, and duty. He enjoyed serving his country and helping to keep people safe. He grew in experience through training, education, and travel. He developed a love for the sea and enjoys boating and sailing with friends and family.After completing his time with the Coast Guard, Ron served on a mission for the deaf in Chicago for his church. While there, he formed the first deaf scout troop in Chicago for the Boy Scouts of America. Returning from Chicago, Ron attended college in Stockton, California where he met his wife, Julie. They were married in the spring of 1984. In 1991, Ron and Julie moved to Amador County where they enjoyed raising their four daughters in a close knit community. Ron’s hobbies include reading, boating, sports, and traveling with his family. Ron also volunteered at a private school where he taught history and American Sign Language. Family, faith, and community are the most important things that define Ron.Ron’s chosen vocation as a Retirement Planning Professional allows him to use his experience, his gifts, and his love for family to help people in a very special way. Ron has been in the retirement planning industry since 1990. Founded in 2002, Roberts Retirement has grown over the years to serve families in northern California and around the country.Ron has served as President of the California Estate Planning Counsel and continues to mentor other retirement planning professionals all across the United States. He is constantly educating himself on the most up-to-date investment strategies and changes in the financial industry. Ron is recognized as a leader in the industry, is a sought-after speaker, and has been featured in Senior Market Advisor MagazineLearn more: https://www.robertsretirement.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-ron-roberts-founder-and-ceo-of-roberts-retirement-group-discussing-estate-planning-for-retirement-2

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us Ron Roberts, who's the founder and CEO of Robert's Retirement Group, and we'll be talking about estate planning for retirement. Ron, welcome back to the program. Thank you, Mike. Hey, so I'm excited to talk with you about this because I feel like this is something that a lot of times people don't pay as much attention to because their mindset is focused so much on what day am I going to retire.

And then they need to focus on, is my money going to last through retirement? But then there's the other element of what's left over and how can I pass the remainder of my assets or money or property? to my heirs in the right possible way. So there's so many of these segments that people really don't figure out or pay attention to. Where do you start with estate planning for retirement in working with your clients? What's the first step? So it would be through our series of questions. So as an example, I do run across occasionally where the individual or couple have no children. And so the question I ask is in their scenario, they both exit life, they're not here any longer, or do they want their assets to go to?

And so they'll tell us, I've heard charities, I've heard nephews, nieces, I've heard siblings, even if they have surviving parents, they talk about their parents. And so the key question is, where do you want your, you know, where you want your assets, your state go to when you both exit life? And if they come back and they say, we have children, and then I ask about their relationship with their children, you'll find out that at times, occasionally they're not speaking to a child. or they'll say, yeah, we love our kids. We're very close to them. I gather their information about their relationship with their kids, where their kids live, what they do for a living. We talk about their grandchildren.

We talk about their grandkids. We get their names, what their ages are at the present time. I ask questions like, are you supporting any of your kids or grandkids at this time? Are you providing financial aid for your grandkids college education? Those type of questions, you know, we ask. So what is important is their relationships they have with their existing family that determines what I'm going to share with them. And also, we talk things like, is your wish for your state to go to your loved ones immediately?

or is your wish to have the money held for them for a period of time over time for distributions? So I need to ask those key questions to get that feel of what I would recommend what they need to do to achieve those goals. So I give you an idea what we do. Yeah, I think that there's, you've mentioned this several times with, it starts with the questions. you know, and there's so much power in knowing the right question to ask and then knowing what to do with the interest to those questions. So that's kind of where you're starting there. I think that is just huge. And there's so many aspects of estate planning. Talk a little bit about what all goes into the estate. Is it just the cash? Is it just your investments? Is it the property house, cars? What are some of the ways that you're guiding your clients to treat the

assets in the estate? So what I do, I mention assets that have what they call beneficiaries. Beneficiary would include their retirement accounts. They would also include they have life insurance. It would also include that they have annuities. And so they have beneficiaries. So under the beneficiaries, one of the things that we provide as a service is to examine their existing beneficiaries on these type of documents.

I just had this experience where a man brought his life insurance policy and there was about a half a million dollars of death benefits. And I read out his beneficiary's name and it was his ex-wife. And I said, okay, if something happened to you today, your wife, your ex-wife will get a half a million dollars and tax-free. Are you okay with that? And he looked at me, you said, are you kidding? No, I'm not, I'm not fine with this. I said, well, this can be corrected. If you want to correct it, he goes, can you help me with this?

Absolutely. We made a phone call through the insurance company. We got to change a beneficiary form, and we corrected it. But there is a lot of beneficiaries out there that maybe a few years ago was the right thing, but maybe things have changed or there's been a death, or maybe the relationships have changed, that they need those beneficiaries updated. But the benefit of a beneficiary is it doesn't get held in probate. It goes directly to them as a lump sum.

And so it bypasses probate and the asset that's held in that life insurance policy or that annuity or that retirement account. It goes immediately to those beneficiaries. Now, if they have real estate, real estate, real estate typically. is owned by the individual and their spouse, like joint tenants in common. And so the title of that property is held in their names. So if one spouse passes, the surviving spouse just basically takes over the title of that property. So there's no problem with that.

Where the problem begins is when the second spouse passes. Then there's the owners. I have now been deceased. So where will this property go to? And that's what happens. They call probate. And probate is made, it defines proving a will to be true. Or if they have no will, it's in test state.

So that means they have children. The children would have to hire a lawyer. And the lawyer will assist them. They get the house, but they have to go through the probate process. process. So you have probate court, you have a probate judge, and it will go through a and the probate courts are held in the county that you reside at, I should say, where the property resides at. And then they have to go through the, depending on about the back, how much work they have. But a probate can be three months, six months a year.

It could be longer. If you have anyone that contest anything, then it can go on. on and on, and that's where the lawyer fees go really, really up. And that's where time and stress goes way up. So that's why people are trying to avoid that. And one of the better ways of doing it is doing a trust. And basically, your transfer to the title of that property from your name to the name of your trust. So now the trust owns the property and you and your spouse are the trustee.

so you have complete control of the property. And when you both are deceased, the trust is still held in trust. That's why it's called a living trust. And then the instruction in the trust document states how we want the property distributed and say when you want to go to your kids, then the transfer of title go from the living trust to the kids title, their names, but they avoid probate. There's no judge. There's no attorneys.

It's just a smooth transition in a trust. And so those things are very important. I just had, again, another experience recently where she brought her trust documents, and I read the name of her trustee. And she was, oh, my goodness, this person passed away a couple of years ago. And she forgot to update her trust because it's easy to forget these things. It's called life. You get visited with life, and then you don't think about these things.

So we helped correct it. But I encourage her to have successions. You know, if that one person can't act as a trustee, then you have another one in succession after that person. And we recommend to have three people in succession. So we corrected her situation, but she didn't know. She forgot about this. But it was corrected and was amended, and we moved on with life.

So anyway, there are certain items that you want to put in trust. One is definitely properties. Another one would be assets. Assets like a brokerage account. You may have a brokerage account, but you can do two ways avoiding probate. One would be the trust would be the owner of the brokerage account, or you can do what they call a P-O-D account. It's called Transfer on Death.

and it basically instructs the brokerage account in case of my demise, I pass away. I want these accounts to be transferred to. And you can have many people as you wish as transfer on death beneficiaries. It's like a beneficiary. You can do trusts or you can do POD called Payable on Death. It operates the very same way. When you pass, you appoint these people to be your beneficiaries on your bank. accounts. So there's ways to avoid probate. There's ways of transferring assets to your loved ones or

charity or whoever you appoint as your beneficiary by doing these type of documents. You know, as with anything that we've said in our conversations, there's never one solution that fits every single person. So every state is different. Some are probate state. Some people can get by with just a will and that's great. Some people need a trust. Some people need several trusts. So I think that the big thing that people need to realize is it should be looked at. It should be updated. And guess what? In your annual review of your retirement plan, the estate plan is part of it. And check those beneficiaries and designations and trustees and all of those things like the two landmines you just uncovered, which I'm sure you have many more. But let's talk a little bit about more of the

documentation like Power of Attorney and Healthcare directives, what should people realize how that impacts their estate plan? Yeah, healthcare is an issue that could happen. It's something you hope you never happens, but can happen. And also, the other issues I come up is if I'm not consonant where I can make, you know, healthcare decisions for myself, where I can't make financial decisions on my behalf for various reasons. I can't file my tax returns. I can't make financial decisions or I can't write my checks. So if you don't have a plan in place and you can't handle your financials or your health care decisions, then your family would have to hire a lawyer and it's called conservatorship. And so again, that's another purpose of probate court is appointing a

conservator. So your family will hire an attorney, go to court, and request conservorship for you. And that will take a little bit of money. They'll take a little bit of time. But this can be completely avoided. And it's a powerful document. Again, you hope that this document never needs to be used. But if you do need it, you're glad you have it in place. And it's called a power of attorney, and there's two types, one for financial and the other one's for health care. But on the financial side, you appoint in an agent that you trust to make financial decisions for you. So typically, if you're married, your spouse would be that person.

And typically after that spouse, if you don't have a spouse, it could be your children. I would suggest to put it in line. you can have co. You can have two people making decisions for you as co-agents, or you can have them in succession. But again, it's someone you trust and that is going to take care of your financial affairs. And it's the same thing with health care. Again, if you're in a situation, you can't make health care decisions on your behalf. You have appointed this agent to make health care decisions for you.

There's also a directive. It's called a directive to physician, basically stating this is my wish. If I'm in a vegetative state and the only thing is keeping me alive is artificially. I don't want to cause undue stress to my family. I want you to unplug the machine. Let me go naturally. Let me go. And that decision is not made on the family.

It's a decision that you've made yourself. Now, you can also elect that you want to be kept alive. even you're in a vegetative state because you may say, I may, I may come to. I may have a recovery. Who knows? And you can have that wish as well if you wish. But that directive to physician, you're directing the physician. And you can also ask a, based on a decision of two physicians or three physicians, they all agree that you're in a vegetated state. It looks like there's no recourse. There looks like there's not going to be a recovery upon their professional, a patient, opinion, unplug the machine. So again, these are important documents that you're not going to stretch

your family over. It's a decision that you only, you made that decision. And so I would encourage have those documents in place or you do have those documents in place to be sure that you, because like we do a manual review, is to be sure those people that you have selected are still around and you still want these people. Or if you want to make a change, it's easy to amend it and change it, put another person in place. But you need to have those updated as well. Yeah. Know what documents you need.

Stay updated to make sure they're still in effect and the right people are named. That's excellent. And I know that one thing with estate planning is the plan the taxes. And I know we've talked about taxes before and you're not a CPA, but we can speak about some concepts and strategies. what about some of the ways that you can help minimize estate taxes so that when your estate passes to heirs, they get as much as possible without having to, you know, take the taxes on the chin? I know there's things like gifting before, you know, you pass and charitable donations, you know, through the estate.

How does some of those things work? Yes. Well, with the current Tax Reform Act of 2017, the reform, the reform, the reform. the federal tax estate tax is pretty high at the moment. I think it's about $14 million. So meaning that when you pass and your family has to file a tax return, it's called an estate tax return, and everything is itemized. and if your state falls below that $14 million, there's no taxes due to the federal government.

Now, state, it could be different. Each state has a different. They may have a state inheritance tax. I'm in the state of California. There's no state inheritance tax. But if you're in a state that is a state inheritance tax, those have to be addressed. And so ways to do some. estate planning to avoid or reduce estate taxes is, for example, in a trust, there is you can set up

and they call it an A-B trust. An A-B trust is basically you have two trusts that are available, but as long as you both are alive, you just deal with one trust. And then when one spouse is now deceased, then you can now split your. trust to two trust. And we call it an A-B-Trust, but easy to define it is A means above-ground and B means below-ground. So B is for the deceased spouse and A is for the surviving spouse. And then what we do is we start moving assets into the B trust because we want to maximize

our exemption. So we could actually shelter $28 million. just using an A-B trust in this example. Now, we have a tax reform coming up on January 1, 2026. They can change it. We don't know what it is. Sure. But based on today, between now and 2026, we know what the rules are.

So most people will never be there and never have to worry about paying estate taxes. It's those who are going to be over $14 million. or over $28 million. And there are, of course, people out that they have those type of assets. They have that net worth. Then we can do what they call advance estate planning. And you're talking about gifting. Yes, you can gift.

They give you so much you can gift per year without reporting the gift. If you exceed that number, you have to report the gift. However, when you file your tax returns, you can use your lifetime exemption of $14 million and deducted from that exemption. And then you wouldn't have to pay those gift taxes. So some people might want to gift and see their kids using the money, their grandkids using the money while they're still alive. So they don't have to wait until they pass and not see how the money is used.

You can do that. You can gift. As long as they're a 511C3 charity, you can gift. you can gift to churches to other type of charitable organizations. So that would be more towards advanced estate planning. But what we come across mostly is they just do a simple plan. It's a trust. There's a will.

There's a power of attorney for health. There's a power attorney for financial. There's a director to the physician. And that's adequate. It's adequate. But the other thing I want to mention is how you want the money distributed. Because most people's plans are when I pass, when we pass, we just want the money to go to our kids. And statistically, 80% of those receive an inheritance will spend it within a few years.

And it's gone. And then so we had this conversation. with our clients and say, are you okay with that? Where they can spend it. Are you kids known for being spend-thrift? They go, yeah, our kids are spend-thrift. They spend their money. They spend our money.

They spend everybody's money. And so I said, well, maybe you want to have that money distribute over time. I use a classic example with my wife and I. We have four daughters. We have eight grandkids. And we say we love our daughters, we love our grandkids. However, they're spent threats. So what we do is upon our passing, their money will be distributed, but it'll be held in trust for them.

And then every year on their birthdays, they get a 7% distribution out of their inheritance. And it goes directly into their personal checking account. And the trustee that we appointed is a fiduciary will say, send them a birthday card. From mom and dad, we're the other side. We're the other side of the veil. But it just reminds them that mom and dad are there,

even though they were not here with you, but we love you. And they get a birthday card every year, as long as they live, and a check deposit in their personal checking account. So some people like that concept. Other people like the idea, well, I don't mind them getting all the money.

That's great. And then we do that plan. But they're options that they're available. They can have the money distributed immediately, or they can have spread out five years, ten years, lifetime. Our trust in California is three generations. So our trust is going to be a perpetual trust. A trust can continue for three additional generations after we pass. So, you know, again, those are the questions we ask during our interview, what their thoughts about their loved ones, and how to that. how their money won't be distributed. And like you said, everybody's different. And we set the plan.

And like you said, every year we do a review. We have a short discussion. They go, yeah, everything's the same. Ron, we're going great. Or they'll go, yeah, there's been some changes. And say, no problem. Let's amend your trust and keep it current with your changes this year. So anyway, that's what we do for estate planning. And you're going to know when you have those annual reviews, if something changed in your mind, you're going to go, okay, if this change, then I need to check this and make sure of this and update that. And it could be a myriad of things that needs to be done from beneficiaries to trustees to changing part of the retirement plan, you know, allocation. So the whole bottom line is this is something when you think about retirement planning as it relates to your state.

You can't just go out and Google it. You need a team. You need someone like Iran to sit down with you and ask the right questions and check each year to make sure. that you're on track. So I think that's just been such great advice here. Ron, we went in depth on this estate plan. If someone is interested in learning a little bit more in reaching out and connecting with you, what's the best way they can do that? Yeah, they can reach out to us by email. It's Roberts, R-O-B-E-R-T-S at Roberts. Again, R-O-B-R-T-S retirement.com. Or they can reach us by website, which is Robertsretirement.com, or they can call us at 209, 223, 7870. Excellent. Well, Ron, thank you so much for coming back on. It's been a real pleasure

talking with you. Likewise, Mike. Thank you. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.com.com. EntrepreneursRadio.com.