Hi guys.
Clint Coons here and in this video I'm going to be walking you through
what is estate planning and why it is important to you.
You know, I get these questions a lot.
People call in, they say, do I really need an estate plan?
When should I set one up? Why is it important?
Because I think LLCs
are more important as a real estate investor, small business owner,
I can tell you the estate plan
is the most important aspect of anything you're ever going to create for yourself.
Think of it like a house.
It is your foundation upon which you will build your house.
That is what an estate plan is.
It's designed to support
everything that you own and everything that you're going to be building.
Now, when I say it's designed to support it, what is its purpose?
Why do you need an estate plan?
Well, the estate plan is set up
to ensure that
the assets that you're acquiring during your lifetime,
if something were to happen to you, that those assets, number one,
are going to be preserved for your benefit, I'm incapacitated.
I don't want somebody coming in and spending all my assets and and start
distributing out to my beneficiaries
if I'm still alive, I'm just can't make decisions for myself.
So I want to have a plan that's going to ensure that if I can't make decisions,
I've nominated someone to make those decisions for me.
The other thing about why estate plan or what is an estate
plan makes it so important is that,
hey, if you've got children in something were to happen to you,
what's going to happen with those children?
Who's going to be taking care of them when you're no longer here
to be providing the necessary resources to raise them?
And have you appointed someone
that you want to be what we call a guardian for your children?
And the other aspect
of what goes into estate planning is it's designed to ensure that
your assets, the things that you have, will be distributed
to your intended beneficiaries.
Maybe it's children, maybe you don't have kids, maybe it's other
individuals in a manner in which you've
determined is in their best interest.
You see, that's just it.
So many people fail to plan when it comes for estate planning.
I mean, if you watch the news, you hear it every day.
This famous person passed away at the age of 62.
This person died at the age of 40.
This one died at the age of 27.
Reporting on this.
And what typically ends up happening is it's just chaos left in their wake
because all of their assets are just going to be in limbo.
You're somebody going to have to go to court.
They're going to have to petition a judge.
Of course, that means hire an attorney to have them appointed executor
in that, to explain to the judge why
they should be the executor of this state and be controlling it
and be distributing out these assets to the court appointed beneficiaries.
That's right.
The law will determine who your assets go to.
So an estate plan is important because it's going to ensure
that the people you want to receive your funds will receive your funds.
And a lot of times, you know, we think about estate planning, too.
It's about ensuring that our loved ones, our spouses are protected
and cared for when we're no longer here.
And an easy way to to, to visualize this
is that when you have two spouses, all right,
and the first spouse passes away, you want to ensure
that these spouses taking care of so all of your assets transfer over here.
Now, you might be thinking, well, wait a minute,
I don't want to give her all my assets
because this is my second or third whatever wife.
You put the number in there and you got a few kids out there
that are floating around from the prior marriages.
You want to make sure they're protected, but you still love this person.
Well, if you're planning properly for your estate, you can make sure that
this person is protected.
And at the same time, these children are protected as well,
because you never know this person could remarry.
And then what you left here goes to this union right here,
and then it never makes it down to these individuals over here.
And so what an estate plan is designed to do is ensure that your wishes
will be carried out and that all of your beneficiaries will be taken care of.
And so when we're planning for something
like this, there's many different tools out there that you can use.
You've heard of a will, you could definitely use a will to set this up.
But the problem with using a will is that you're going to be stuck in probate.
And when you go through the probate process, that's an unnecessary expense.
You don't have to pay an expense
to go through probate, hire an attorney to go to the judge
to get letters of testamentary in order already so that your executor
can hold up all the assets and then distribute them out upon
the executors timetable.
I don't like that idea.
I'd like to set up a plan where I have somebody pre appointed that I know
is going to be in control of my affairs when I no longer
can can control them myself because I'm no longer here.
And that person that I've appointed will be able to step in without the necessary
need to go to the probate judge, without the need to hire an attorney
and be able to start distributing the assets right away
so I can get those assets to the people who are most in need that I've left behind
that have relied upon me maybe during my lifetime.
So the way you accomplish that is with that living trust.
A living trust is a great tool to to bypass probate.
And I have a few videos on my channel discussing the benefits of a living trust.
And so a great estate plan that you're setting up should do this.
It should provide for the people that you care about.
It should make sure that the assets are distributed to them as quickly
as possible or per the time frame that you've laid out inside of your plan.
Let's say you have some real estate right here.
That's some investment.
Real estate,
you know, an option
might be in a situation like this with your estate plan is,
hey, I want to have my real estate held in a trust
and then that real estate is going to throw off income to my spouse,
my surviving spouse, during my spouse's lifetime.
And then when my spouse is no longer here,
that income is going to go to my children, but it's still going to be held in trust
because by holding it in trust, I'm preserving the cash flow
that comes from that.
And I know that cash flow can help out many different people
during their lifetime rather than the mistake that you see a lot of people make.
They inherit assets, and the first thing they do
is they sell those assets, go down and buy a mercedes S-Class
and start driving around thinking, Man, I've hit the big time.
Now look at me.
I've got this Mercedes.
Always wanted to have one,
but you had two ATM's and you traded those ATMs in for depreciating asset.
That's not going to be worth anything in about 15 years.
That was not the wisest decision.
But there's people that make those decisions.
So an estate plan is designed to protect people from their own immaturity.
So if you created an estate plan the right way
and you put the proper provisions in there, you can ensure that
your assets, the things that you've done
while you're alive, can pass on for multiple generations.
And there's ways to set this up.
I mean, you can even, like take cash, maybe you just sprinkle some cash here
and you can sprinkle cash over here with those assets.
It just you have to look at what you have.
In my personal estate plan, I have real estate and I have, you know,
liquid assets as well.
What I'm looking to do is hold all the real estate in a trust
to keep income going to multiple generations.
But all the other stuff can be distributed out right away.
The cash, the brokerage account, the sell, the personal residence.
If you want to convert it to cash, I don't care.
But the the assets that I've built up is on the real estate side.
I know what that can do for people that can help out a lot of individuals,
you know, our beneficiaries for many years to come.
And so it's best to preserve that.
So estate planning should be thinking about
that, thinking about how to provide for for people when you're no longer around.
And then it should also make sure that your estate plan is looking at
what happens if you get sick.
If we see anything out of out of COVID, it's been that
you need to have medical powers of attorney living wills to ensure that
when tough decisions need to be made, it's not a hospital making those decisions.
It's loved ones who know what you want if you're ever
in a position where you can no longer make decisions for yourself.
And that's why a lot of people
miss this opportunity when it comes for their estate planning.
They think of, Well, I just got to pass these assets on when
I've died, and that's when it's going to get handled.
Well, what happens when you're alive and you still have you haven't passed on yet.
Do you really want to be in a position where rather than realist like real estate
to an ATM, to you, your body's an ATM to a hospital.
That can happen if you don't have the proper plan in place
to prevent someone from using you in that manner.
So a state plan is more holistic.
You're looking at, what do I have, how do I get it to my loved ones
and how do I protect myself while I'm here and after I've gone?
You want to learn more about how to create an estate plan?
I would encourage you to set up a strategy session
with one of our attorneys where we can discuss the estate
planning benefits for your individual situation
and look for some of the solutions that I have discussed
to ensure that everything that you're working on that you've accumulated today
can pass on to your loved ones tomorrow in the most seamless and
efficient way possible.