Now or Never: Long-Term Care Strategy with Kosta Yepifantsev

What No One Told You About Estate Planning with Christopher Small

May 30, 2023 Kosta Yepifantsev Season 1 Episode 38
Now or Never: Long-Term Care Strategy with Kosta Yepifantsev
What No One Told You About Estate Planning with Christopher Small
Show Notes Transcript

Join Kosta and his guest: Christopher Small, Estate Planning and Probate Attorney, Educator, Coach and Founder of CMS Law Firm. 

Throughout his career, Christopher has helped thousands of clients and followers reshape their perspective on legacy planning, probate, estate management, and how to protect your family through generational wealth.

Find out more about CMS Law Firm and Christopher Small:
https://www.cmslawfirm.com/

Find out more about Kosta Yepifantsev:
http://kostayepifantsev.com/


Christopher Small:

This is where people get in trouble. It's important, but it's not urgent, right? No one thinks they're gonna die. No one thinks they're going to be involved in an accident or whatever. And you have these things in life that come at you. Kids gotta go to baseball games. You know, you got this big work presentation coming up, looks like all these different things that allow you to push off this process, but it's like going to the gym or eating right? I mean, you got to just make good choices now because you'd never know.

Caroline Moore:

Welcome to Now or Never Long-Term Care Strategy making. themselves. with Kosta Yepifantsev a podcast for all those seeking answers and solutions in the long term care space. This podcast is designed to create resources, start conversations and bring awareness to the industry that will inevitably impact all Americans. Here's your host Kosta Yepifantsev.

Kosta Yepifantsev:

Hey, y'all, this is Kosta and today, I'm here with my guest, Christopher Small estate planning and probate attorney, educator, coach and founder of CMS law firm. Throughout his career, Christopher has helped 1000s of clients and followers reshape their perspective on legacy planning, probate, estate management, and how to protect your family through generational wealth. Today, we're talking about what no one told you about estate planning. So Chris, before we get started, I want to talk about your podcast, the unconventional attorney, and how this mission has shaped your approach on estate planning and law overall.

Christopher Small:

Yeah, so the unconventional attorney, podcast brand, though think it's kind of a long story I create that was all born out of me really just wanting to kind of document my journey of starting and building a law firm. Okay, it's like what it was really around. I didn't think anybody was doing a very good job of, of sort of teaching that, like how to, what do you actually do when I started? They the advice was to get a stack of business cards, and do really good work. And the business will call. I was like, well, it does seem there. I think there's more to it than that. Yeah. And so I just started talking about what you know, what I was, what I was doing, and when what was working and was not working. And the reason it's called the unconventional attorney is because a lot of the the, my approach, if you couldn't tell already, you will be able to tell by the time we're done talking about this is a little unconventional, I'm a little less, much less formal, probably the most attorneys, I really take an approach, in general of let's try to solve the client's problem, let's try to get them where they really need to go. Sure. And not go crazy, just for the sake of making myself a little bit of extra money. And so I think that, that that's where that goes. And part of that honestly, the reason I do the unconventional attorney stuff is we know when it when we talk about legacy, I, I create a lot of content. Part of the reason I do that is I want my kids or my grandkids or whatever, to be able to see that some day and be like, there's Grandpa, you know, when he's just a he was a kid or whatever. And, and that's why that also allows me to talk about things that are less sort of legal, right? You know, with my estate planning podcast and stuff I'm really talking about how do you make a trust and this kind of stuff? The unbundled attorney one is our day to day or, or, you know, like I'm having troubles with this thing. It's more just more personal, really, than then the the law stuff. So that's where all that came from.

Kosta Yepifantsev:

before. Before we get started. Did you always want to be an attorney growing up?

Christopher Small:

No, definitely not. I was a psychology major in undergrad, I took stats, and I was terrible at it. I knew I did not want to go to grad school for psychology, because they was just going to be more stats basically. Right? My best friend was going to be an attorney. I thought attorneys were cool. You know, and you can make a lot of money. So I thought, sure. I'll throw you out there. It's not always a lot of money out there. And, and so I just decided that, you know, that's I was gonna do i It does suit me. Well, I love to read, you know, I love to solve problems. So, but I did not know until maybe my junior year of college is when I decided I was gonna go to law school. So you

Kosta Yepifantsev:

like to solve problems and one of the biggest problems that a lot of people face is planning for retirement. And so you specialize in estate planning. So in my experience, the worst thing that you can do in retirement planning and care planning, or even in financial planning is wait until you actually need the services. So walk us through the fundamentals of estate planning and why it's so important.

Christopher Small:

Yeah, so estate planning is important for a couple of reasons. Reason number one is it protects you, in case something happens to you, or he's number two is it protects your family in case something happens to you raise number three is really, it allows you to make decisions related to both of those things. And if you don't, then somebody else is going to make decisions. And it's usually not people that you want making the decisions. And the people that are chosen and put into places are typically not the people that you that you want. You know, I always say it, I'll go, I'll go, I'll give a quick overview. But what I usually say is, most people have that person in their family that looks normal on the outside, but that you would never let like babysit your kids. Sure, this is why you have estate planning, because you can really eliminate them from potentially being in charge of you or your assets. Right. So very generally, I was estate planning covers June, two circumstances, right. Number one is if you are alive, but incapacitated, this is where your personal sort of planning comes into play a power of attorney, who can manage who can sort of be in charge of your stuff, pay your bills, manage your finances, just do whatever needs to be done. They have a fiduciary duty to, to act on your behalf in in your best interests. So it's not just carte blanche, they can do whatever they want. But if you don't have that person, you have to go to court, and you have to get someone sort of appointed to that position. And in the time between when something happens to you, and when that appointment happens, can be a significant amount of time and your family can be without assets, right? Yeah, I've had people call me and say My husband was in a car accident. We have separate bank accounts. I need to get into his I need some money. What am I supposed to do? And I have to tell them? It's gonna be tricky,

Kosta Yepifantsev:

right? Is that the probate thing that you were talking about earlier? Before we got started? Or how does probate work then?

Christopher Small:

Yeah, so probate super high level is the process of transferring your assets to someone else after you die.

Kosta Yepifantsev:

Okay, so that's different than what we're discussing with somebody being alive and incapacitated.

Christopher Small:

That's right. What we're talking about right now is is so yeah, so power of attorney, medical power of attorney, they cover you while you are alive. Okay. So when you die, those two things, they go away, right, and then the will or trust, if you have something like that, that steps in, just sort of provide authority to who's in charge of sort of acting on on behalf of your state after you're gone.

Kosta Yepifantsev:

But as you're doing this estate planning, you're talking about who's going to be the medical power of attorney who's going to be the financial power of attorney, right. Like those are key. Those are key facets in every single estate planning role.

Christopher Small:

If you have if you have kids that are under 18, we ought to talk about minor power of attorney and minor medical power of attorney, you know, if you're if you're married, or if you're if you're you and your partner, both parents are in a car accident, who's in charge, right? You can sign a field trip slip, who can take him to the dentist to Kin, to just allowed to watch them, you know, you don't think about these things. And and if you don't have the right paperwork, again, it just causes a bunch of problems. And these things are easy to put together.

Kosta Yepifantsev:

We're about to talk about a pretty alarming statistic. But I am curious, before we start on it. Do you know about in terms of Americans like the percentage of Americans that actually have a will trust state planning?

Christopher Small:

I haven't looked at it recently. I think it's under 50%, though, I would Yeah. I would say it's because people think oh, I need to have a lot of assets to do I need to do anything. They don't understand the power of attorney and the medical power of attorney. They are probably they're very form driven for the most part. It's not as if you're creating like bespoke powers of attorney for for most people. Sure. But man, they are important. And they really can do a lot for you if you have them and leave you hanging out to dry if you don't, so people don't think about that side of things.

Kosta Yepifantsev:

How expensive is it to go through in the range, of course, but how expensive is it to go through this estate planning process for typical Americans?

Christopher Small:

Yeah, it depends. It kind of depends on where you are. Right? It also depends on who you hire. My I do flat fees for my stuff. I don't charge by the hour. If you're using an estate planning attorney and they're charging you by the hour, I will go look for somebody else. Because you know, the value that you get from using an estate planning attorney isn't just making sure that you're doing the right thing being able to ask questions, being able to have them tell you, I know you want to do this thing, but there may be some unintended consequences over here, versus it took me six hours to draft your will, you know. So what we do is we do flat fees, you want to do a foundational plan, which has power of attorney medical power of attorney health care directive. Will disposition instructions or like burial instructions. Yeah, if you are single, it's like 1500 bucks. If you're married, it's like 2000 bucks. Nice. If you want to add a trust on, it's just an extra 1000 bucks. And then we have an estate tax here in Washington State. So if you want to do a credit shelter Trust, which is sort of a, I don't know, more complex revocable trust, it's extra 1000. On top of that. So

Kosta Yepifantsev:

if I'm not mistaken, I know that you don't specialize in elder law and not familiar with like long term care aspects. But e revocable trusts are the vehicles that a lot of attorneys, estate planning attorneys elder law attorneys use to be able to access the Medicaid market when while also protecting their assets. So here's this crazy statistic that I was reading in your bio, and I needed to share it with everybody that's listening, you mentioned that 85% of all inheritances are spent within 18 months. How can estate planning help protect future generations from their own financial decisions?

Christopher Small:

Yeah, so with this would come mostly through trust planning, right. So two of the limitations of just having a will, or that that typically you have to go through probate, unless you utilize beneficiary designations and things like that. And you you have no long term control and management oversight of the assets. It's a direct distribution vehicle. So if if I want to give you $1,000, When I die, you just get a check. You do whatever you want it No, no oversight, or revocable trust, though, can give you that oversight can help people make correct or sound or decisions. What we do this mostly comes into play with younger families, you know, so like I have, for example, I have a trust, I have three kids, I have a trust for my kids. They're all under their 10. And under, I'd says basically some admins to me, there's going to be a trustee in place, which is like a manager of the assets for the kids. And until they turned 25, the distributions out of that trust can only be made for health support, education, maintenance, at the discretion of the trustee. The example I always use is, you know, let's say one of my kids goes to college say, hey, trustee, I'm going to college. Obviously, that gets paid for right? Education, right? Hey, trustee, I'm going to college, I need a car, I want a Ferrari, you can have a jeep. Right? So you, right, so you sort of build these things? Yeah. Right. They can be tricky when it comes. You can sort of, I'm not a big proponent of trying to have a like an iron fist over assets, I think people are going to just do what they're going to do at the end of the day, I'm more a proponent of try to raise your your kids or your whoever you are, whoever you're giving your things to, with sound fundamental principles, teach them how to use this money. I think where it happens most often, often is no one talks about money at all. And then the kids just get a bunch of money just laid in their lap versus come to the financial planners meetings with me, or, you know, this is how we use this money here. This is, you know, just so a lot more help in teaching your kids what you what, why you do what you do, and how you do it, then putting restrictions via trust on how the money can be spent?

Kosta Yepifantsev:

Well, and also, you know, when you're older and age, and you've got adult children, I think, you know, people sometimes don't think that they may need a trust because their kids are safe and sound, you know, in their, in their older years, full time jobs, have their own families, what have you. But I think that the same exact thing that you're describing for young children can also apply for older kids as well, like make, have them be a part of the process. And also, you know, just because you have bad habits when you're 18 years old, doesn't mean that those bad habits aren't transferable to when you're 45. Right.

Christopher Small:

For sure. Yeah, you can the the You're right. When it comes to to how restrictive you want to be. It's really personal preference. What i i Don't try to I try not to impose my own personal beliefs on what people want to do. I always tell people look, it's not my family. It's not my money. You know, if you ask me, I will give you some ideas. When you tell me what you want to do, though, you know, some people don't care, they don't care, they just want the money to go, that's fine. I've told them perfect, but I can do that for you. Some people want to know, hey, we want this to last for a long time, I say, okay, I can tell you how to do that as well. So that's kind of how I operate.

Kosta Yepifantsev:

Let's talk about the concept of legacy. How do you help families and business owners incorporate their values and traditions into the estate planning process?

Christopher Small:

So I probably do it less, then. I would like the the hard part is, everybody says that they want to do that, until it's time to do that. Sure. Right. You know, so it's like, if, again, if you really want to have a legacy, if you want to build legacy, you have to incorporate traditions in into your family, you need to teach them about money, like you are not going to be able to create legacy, you know, quotation marks, but the gist of it the trust, like, you know, like you look at these dynastic families, like the Kennedys, you know, things like that. If you read their biographies, like they were brought up a very specific way from birth, all the way through, and those traditions and that family philosophy and those values, they were ingrained, and they continue to build today, right? Do you have a,

Kosta Yepifantsev:

an Bordeaux? Yeah. But and so what you're saying is, is you can't just use estate planning or build or, you know, putting details into a trust to be the only way to build like fundamental trend traditions, and also to set the expectations of what you want your children to do as if you're not there anymore. Right. So it has to happen more internally within the family, not necessarily in the state planning process.

Christopher Small:

Yeah, where I like to use it. What I like to use estate planning for is like, Look, you with this trust, when you're gone, the assets in the trust will have high asset protection, right, there'll be protected from divorce from bankruptcy from, you know, bad choices. Sure. That's really what for in my mind estate planning is for the education, how those assets are used, and it really has to come outside of the plan for to be effective.

Kosta Yepifantsev:

Let's talk about technology. How is technology AI and programs like chat GPT, changing the landscape of estate planning? And can the everyday American utilize these resources to help solidify their end of life wishes?

Christopher Small:

So I think it's too early to tell right now. I think event, the problem, because I've experimented with this. And I've and I've tested it out right now, for live chat GPT. To give you answers, do you have to prompt them? Right? So the biggest limitation is if you don't put the right information in or if you don't ask the right question, you're not going to get the right answer. Right. So it that's the biggest limitation there. There is already software though, there's already places that you can go where you can just answer a specific set of questions, and it will spit out something for you like that already exists and has existed for a long time. It's not even AI driven, right? It's just a decision tree, basically. Yeah. So it will, I think when it comes to estate planning, it will probably be a little less. Invasive is the word that comes to mind. But it's not the right word. Disruptive, maybe contract review, for sure, right? Things like that, where you're going to have the same probably bespoke language coming in every time. That's where it's going to make a difference. There still is this element, though of family values in emotions that are kind of I think hard to get into a prompt.

Kosta Yepifantsev:

So you don't think that the necessity for white collar jobs like an attorney, is something that may be considered a thing of the past when you have these type of chat bots that can interact on a much more significant level.

Christopher Small:

I think eventually, that will it will Okay, I just think it's a ways away right? I say because you're there will be come a time where you can use it will because here's the thing, you have to know what to put in to get out right so for it to be able to say Look, I need all in here's I need all of your financial information. Sure. I need to know about your family. Yeah. And but not just about oh, not just you have two kids. it you need to know that Suzy is bad at money, you know that Rick has a little coke problem that he's dealing with from time to time. So the without that information, right, what what the AI spits out at you is going to be incomplete.

Kosta Yepifantsev:

I see when you say that it may be in the future, I think when everything is more interconnected, and there's these medians, that that AI can pull from to make those types of determinations, then you can actually ask them a question, then they'll have every single social media profile and, you know, pretty much the entire internet consolidated around one person who's been using the internet, since they were, you know, three years old, essentially. And they can actually make a more a more educated decision.

Christopher Small:

Yeah, I think there will come a time to where we're able be able to ask you questions. Oh, no, like, were you? Were you alone? You give it incomplete information? It says, Have you considered this? Or do you? Are you worried about this? And based on how you answer, it will ask for the prompts, potentially. So it will happen eventually, I'm sure it will happen eventually. But for now, I think we're safe. Yeah.

Kosta Yepifantsev:

So let's say that somebody did not go through the estate planning process, they don't have a will, they don't have a trust. They've and they've got, you know, they've got some kids, they're in their late 50s, they have a heart attack. So what happens if someone dies without a will or trust in place, and what are the potential consequences for their loved ones.

Christopher Small:

So, I mean, so contrary to popular belief, or what a lot of people think that your assets do not go to the state, if you die without a will, okay, they will go to your family members, the limitation is you don't get to pick where they go, I say in each state is a little bit different on how those assets are, are transferred, or where they go. Washington state, for example, if you have if you are married, and you have kids, if you have separate property, so property brought into the marriage, half of it goes to the kids, half goes to the spouse, all the community property. So whatever you've accumulated during marriage goes to the spouse, if you don't have a spouse, and you have kids, everything goes to the kids. The limitations are though that that you often don't get to choose how those things are distributed, you often don't get any if you have minors, in particular, you you don't necessarily get to choose how those assets are invested, sometimes they will cash everything out, which is not always the best idea, right? You just don't have the control that you want, you don't get to pick who's in charge of managing the process. You know, you don't get to an often things can get lost in the shuffle. Sure, you know. So what you really lose is just the ability to control where you want everything to go.

Kosta Yepifantsev:

I see what are the most common mistakes that people make when it comes to estate planning? And how can it be avoided?

Christopher Small:

Wow, I mean, there's a bunch of different. I don't know that they're common mistakes, necessarily. There are just a bunch of little tiny things that people don't do. Most of it is they think that the rules are one way when they're not. Right, okay, or they're trying to do something. And the way that they're trying to do it just doesn't work out the way that they want it to work, okay, for the solution really, is to work with someone that can talk to you about what to do help you through it.

Kosta Yepifantsev:

Are there any, like significant errors that people make, or like something that you constantly see happen over and over again, in terms of people are expecting x, but they really can't get x? So they have to settle for why

Christopher Small:

the things that I see are when Pete they're the so there are two big problems that I see. Okay, number one is people do an estate plan on their own, but they don't execute the documents correctly. Right. Okay. So then it doesn't work. For example, I've had some people come they have failed, like, let's say that dad died, okay. He had four biological kids and he have four stepkids. He wanted everything to get split equally amongst all eight kids, but he didn't execute as well properly. So all the step kids are out. Right? Because they're not

Kosta Yepifantsev:

when you say execute the will do you mean like filing the will with the state just signing

Christopher Small:

it properly, having a witness properly, okay? Like, people just make mistakes. They don't know what the requirements are. They're not super hard to figure out, but they just don't know. You know.

Kosta Yepifantsev:

So, what you're saying is if you don't work with an attorney, you can still write your own will and get it notarized and and obviously sign with a witness present. And that will act as a will. Or you if you don't do you have to file it with the state or anything like that.

Christopher Small:

It depends on the state that you're in. I think in Washington State, you don't have to file the will until the person has died

Kosta Yepifantsev:

wild. And I mean, it just seems really risky. It kind of does.

Christopher Small:

The, you know, there's do it yourselfers, though, in everything, right? There's, there's just a spectrum of people in all places, some people want to fix their own cars, and that's fine. Somebody want to make their own wills? That's fine. You just, yeah. It just, you know, you're, you're, it's a risk assessment, right? Are you? Are you okay with doing on your own? Some people are, and that's okay. You know, but they, but the other thing that happens too, is when it comes to trust planning, a lot of times people think like, oh, I don't want to do a distribution until someone goes to college, for example, you're like, Well, anybody can go to college, and just party their way through it and get Ds. And so sometimes it's like, you know, think about what you really want them to do the money as a motivator is often not the best way to approach that.

Kosta Yepifantsev:

So we always like to end the show with a call to action. For our listeners, who are just starting to think about estate planning, what are some actionable steps they can take right now to begin the process?

Christopher Small:

Okay, so this is a, this is, it's gonna sound self serving, but it's actually not, because if you're not in Washington State, I can't help you because I'm not licensed anywhere else. I have a YouTube channel. So if you go to YouTube and search CMS law firm, my youtube channel will come up, I have hundreds and hundreds of videos that are that are up there. Some of them are super short, only a minute long, most, the longer ones are only like five or six minutes long. But I sort of cherry pick almost everything that you could ever think about when it comes to estate planning. i Oh, I sort of go What the what, through what the process looks like what these different documents do, that would probably be a good place to start to sort of take away a little bit of the scariness of the process, give you some background and give you an idea of what you want to do. And then I would call someone and get on the on the calendar, right? The downside real glass thing? The downside to estate planning, this is where people get in trouble. It's important, but it's not urgent, right? No one thinks they're gonna die. No one thinks they're going to be involved in an accident or whatever, you know, in you have these things in life that come at you. Kids gotta go to baseball games, you know, you got this big work presentation coming up. Like it's like all these different things that allow you to push off this process, but it's like, going to the gym, or eating right. I mean, you got to just make good choices now because you'd never know.

Caroline Moore:

Thank you for joining us on this episode of Now or Never Long-Term Care Strategy with Kosta Yepifantsev.If you enjoyed listening and you wanna hear more make sure you subscribe on Apple podcast Spotify or wherever you find your Podcasts, leave us a review or better yet share this episode with a friend. Now or Never Long-Term Care Strategy is a Kosta Yepifantsev production.Today’s episode was written and produced by Morgan Franklin.Want to find out more about Kosta? Visit us at kostayepifantsev.com

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