Welcome to another insightful episode of “Connecting the Community with Chris”. In today’s episode, we have brought together two stalwarts from the fields of Wealth Management and Law, Cara Gardner, and Sam Lebowski, to shed light on the intricate world of estate planning, touching upon essential topics such as wills, trusts, and end-of-life preparations.
As we dive deep, we unravel the nuances that encompass both the financial and legal perspectives, aiming to provide a roadmap for smooth navigation through these often complicated matters. Tune in to discover the steps to secure a seamless future, where your family can tread with clarity and confidence, backed by a well-laid plan.
Chris: Hello! Welcome to another episode of Connecting the Community with Chris. I’m so honored to have two special guests with me today – Cara Gardner, a Wealth Management Advisor at North Coast Wealth Management, and Sam Lebowski is an experienced Attorney from the Lebowski Law Firm.
Cara has over 20 years of experience in the financial services and Sam also specializes in the law pertaining to the Senior Care Community.
Cara guides her clients through difficult economic challenges as well as Sam and his Law Firm, including related issues to Long-Term Care Planning, Nursing Home Planning, Estate Planning, and most important – Trusts.
So, today we wanted you to learn about Cara and also Sam. So, Cara, tell us a little bit about yourself and your experiences of how you got started.
Cara: Sure, absolutely. Well, I have a degree in Business from The Eli Roth School at Michigan State University, and I spent my first 10 years of my career in banking in a variety of roles before becoming an independent advisor, a little over 13 years ago, and so, now, I’m with a great firm here in Farmington Hills.
Thanks for coming to see us here today, and my team has a vast depth of knowledge, between the advisors and our full-time staff. And so, we really have a great group to help our clients with a variety of needs. So, thanks for having me.
Chris: That’s great. Thank you for being here. And Sam, we’d love to learn a little bit more about you and tell us about your history and your family law firm that you have.
Sam: Of course. So, as I like to say sometimes, myself and my family run the Lebowski law firm. As I joke around, it takes two to tackle the one, my father, he’s the boss man, the Lead Attorney and CPA in the office. I went the Attorney route; my brother went with the CPA route. We just manage practices in different floors of the building. I solely specialize in Estates and Trusts, the drafting of those documents, administering those documents, and assisting with long-term care, preservation of assets, placement in nursing homes, issues like that, as we call that our crisis planning in the office. I have a vast experience as well with VA work, dealing with aid and attendance and pension, mainly as we do now. But we’re glad to be here and be able to speak and kind of weave in and out of these different topics that will relate to the estate planning area as well as are so heavily related to your financials and your financial advisor who that may be as well.
Chris: Well, thank you, we appreciate you being here. I know it’s really important for all of us to be a part of the community. What’s really important in the community is that we all come together. I know that with Cara and also Sam, we are part of a group called the Senior Compass Group, and so, what we do is we’re advocates in the community, and we let the community ask us questions, and also we are there to be able to go over specific topics that are important, that are valuable, that we know that our community will face.
So, first question today. I really want to know is, what is important regarding estate planning on both sides, whether the financial side and the attorney side, when our community is preparing for that.
Cara: Well, I think one question I get often before I refer clients to Sam is, do I need an estate plan, right? A lot of people will say, who is necessarily someone who needs that type of planning, and its pretty much most people, right? If you’re an adult, there are a few key things that you should have, but from my client standpoint, especially if you have a little bit more complicated situation, maybe you’ve been through a divorce, maybe you have a blended family now, perhaps you have a child that has special needs, you know, somebody that we have to care for through adulthood, you know, things like that, those types of things maybe. Properties in different states are especially sensitive and something that I would want you to contact someone like Sam to talk about. So, it definitely affects most adults, but some more so importantly than others.
Chris: So, but I’m assuming some of those documents need to be legalized too as well, but also organized in a fashion so that way family members feel comfortable having these important topics to discuss. That’s why I would like know Sam is that, when she is talking with a family, how would you step in and tie in.
Sam: Usually Cara, as a good rule of thumb is to win somebody, may or may not need to seek some counsel on the estate plan, and as she said, which is correct, usually a majority of people need some type of planning. We would like to say at the office, nobody has a crystal ball. I saw clients very young who could have benefited from some planning, and some who are very old who could have benefited from some planning. And it’s just a matter of, if somebody has the assets and the knowledge and the concern, they should certainly seek somebody for that reason alone. Don’t let it be too late and at least see if you need to do something simple like a Power of Attorney, or you need to do something more advanced like a Trust and just kind of be guided and counseled through the different ins and outs of the Estate Planning realm, the beneficiary designation rules, TOD rules, things like that to really ensure that that your assets go to who you want to after death, usually, preferably, without Probate Court interaction.
Chris: Do you have anything to add about?
Cara: Yeah, typically I can help with, kind of what Sam was saying, you know, those transfer on deaths or designated beneficiaries, you know, some things can be a little bit more simple, right? We’ve got an account; I can put a direct beneficiary and a contingent one on an IRA for someone. But it can get more complicated than that. Your property, your home, do you own a home in another state, a vacation home, you know, those kinds of things tend to need more. But really, even besides just the financial assets and making sure all of that goes where it wants, you know, we have problems with it, you know. I have to pay attention to my client’s capacity, right? And are they still capable of making all these important decisions on their own, does somebody else need to be involved, you know, those kinds of things really aren’t just about the finances, but are about their overall well-being. And so, where Sam is always helpful is those Powers of Attorney and other things where family members can come in and kind of help out.
Chris: Yeah, and I see that difficult conversation could happen at both parties, you know. With family members I always see is, on my side, is that they don’t disclose everything, and so, they’re very private about their finances, especially with their kids, depending on the relationship. But I know that when it comes down to, also I want to discuss is Wills. And who should consider to have a Will and when is it, is there a certain demographic, age to have this discussion? We’ll start with Sam with that question.
Sam: You know, we’ll touch on this a little bit as well when we go towards one of the questions later on today, but somebody who should consider a Will kind of falls in that same category who should consider some Estate Planning. Now, as a lot of people aren’t aware of, the Will only gets read through probate court, and probate court is only generally ever used or needed when there’s assets left in somebody’s sole name without a beneficiary, without a joint owner, and / or without it being titled and it being the asset titled into that individual’s Trust. So, as I like to say sometimes, for younger individuals in particular, you take a look at the default rules, who your assets would pay to if you did not have a Will. Because the legislature has surely made up those laws and has ultimately made those decisions for you.
If you passed away, as we say intestate, without a Will or other document indicating where your assets go and sometimes people are completely fine with that and sometimes, they want the exact opposite of that. Now, having said that, that’s not a reason to do or to not do a Will or to do some planning or not do some planning, but at least be aware of what those rules are to start that conversation and to get into the mode of whether you should be doing this planning or not. Usually, if somebody’s dealing with Cara and they’re picking and choosing beneficiaries to where they’re wanting Charities, small percentages, they’re nitpicking it, as we sometimes say, there’s usually a good chance that that person needs a Will, a Trust, some Real Estate Planning documents to make sure that not only my job or the attorney’s job during life and after life is smooth, but that the financial advisor’s job is smooth, so they’re not in a position to where they’re having to go through these various assets and pick multiple different beneficiaries. Whether you have one landing spot, one Will or Trust of where things would go after the end of the day.
Chris: And it helps the children too, you know, most important when your parents pass, you know, obviously, you want a controlled situation, especially, if your parents have assets, to be able to divvy up with each individual child too, you know. That can be very difficult for them to be able to even have control over it without having proper documentation.
But let’s talk about the financial side of the Will side. How is it on your end when speaking with family members about that?
Cara: Yeah, well, like Sam mentioned, you know, I can be helpful to the point of the assets themselves and sometimes we can designate just about everything you have for a beneficiary, or payable on death bank accounts, transfer on death, you know, things like that. But occasionally, there are things outside of that, that would fall into a category where if you’d like to avoid probate and the additional cost of it, you know, that’s where Sam can come in, and help the families have things in order, so that they don’t need to get that far, because there are businesses, right? So, a lot of business owners there needs to be some thought given to Succession Planning, given to you know, is my son going to take over the family business, does he want to, is he capable of, am I going to sell it to him, am I going to do, you know, so, all those kinds of things, you may assume some things, but without any legal documentation or planning put behind it, you know, it can leave things kind of up in the air. And now, if your children are married and you know, something happens to you, and the spouse have a different opinion and not want them to take the biz, you know, I mean you really want to kind of have some of those things put together and that’s where Estate Planning can help a lot.
So, definitely, business owners would be another big category to consider.
Chris: So, what considered plans now are addressed, for example, say, now, we talked about, you just briefly just talked about Medical Planning and Financial Planning, End of Life Care, there’s End of Life Care decisions that we’ve discussed briefly right now, and End of Life Planning, such as, funeral, and burial plans. So, during these times, what I think, what I get from both of you is for the public to understand is that, have the discussion way ahead of time, because they’re going to be very difficult to happen when your mom and dad pass away. These difficult conversations are hard, but also too is, do you have any insight on any other topics that have to do with medical, financial, end-of-life care advice for the public?
Let’s start with Sam.
Sam: So, we kind of segue into that by referencing the various documents that they get included in an Estate Plan, quote unquote, and that being a Trust or not, always a Will, a Power of Attorney for financial matters, a Power of Attorney for Health Care matters, called numerous different things, previously used to be called a Living Will, now it’s called the Patient Advocate under Michigan Law, Medical
Directive, all the same document. You’ll get the HIPPA authorization to be able to speak with the doctors freely. And I never thought that was actually needed with spouses, until you see it with your eyes, them being withheld information like that, and funeral representative documents indicating that if you do not pass away with a prepaid, pre-arranged funeral, that you have some type of document appointing that person or entity to make such a decision for you. Now, within there you have various different plannings. You have the financial planning which usually occurs after or in the midst of the Estate Planning, drafting the documents, and that is dealing with your financial advisor, making sure you have a list of your assets, you’re aware of what they are, what tax status etc. to be able to really give your attorney the best and fullest picture to make it proper advice. Now, if somebody has, you know, a large amount of assets, it’s going to change my opinion versus if they have very consolidated in one or two assets, my advice and opinion changes with regards to the Trust in different Power of Attorneys that might be in there or the powers that would be within those Power of Attorney documents.
That’s more the financial side dealing with the Trust and the Financial Power of Attorneys. You have the health care, so, you’re dealing with end-of-life decisions, whether you’d want DNRs, life support, think things like that, and in the midst of that you always have the conversation of who’s going to be that individual. I know you likely see this, you know, firsthand more than I do, of who is that person who’s going to care for you and whether they’re making that right decision. And that comes into play ever so often as well as that same decision with the financial, and I’m sure Cara sees that as well with a document that’s often confused with, and for Financial Power of Attorney, but that they have in, and I’ll let her speak about this, they have a trusted contact and then that allows you as the account holder to appoint a trusted contact to, you know, ultimately I think, speak on your account. And it’s really to prevent undue influence, fraud, things like that. And Cara will kind of touch on that and some of the ambiguity that she sees with the individuals or clients thought on that document versus Financial Power of Attorney which are completely different in independent documents and ideas.
Cara: Yeah, a lot of people probably are asked when they open accounts for assigning a trusted contact and generally what that’s for is, for myself or advisors to kind of look out for our clients, right. You know, as we age, unfortunately, there are people out there that try to take advantage of your situation, and so, if I am concerned about a client’s well-being, or I’m worried because they didn’t show up for an appointment we had scheduled or something like that, I would have somebody, usually a family member that I could reach out to and say, “Hey, you know, Mom or Dad or whomever was supposed to be here, or I’m a little concerned about this caregiver, all of a sudden they’re, you know, calling me all the time, you know, things that are sort of strange, right, anything I notice, their bank account has this added person now, do we know who that is, etc. So, that’s what a trusted contact is. But that’s not a person that can sign forms for Mom and Dad, that can make distributions, that can make investment decisions. That’s different, that’s a Power of Attorney. You definitely need something separate if you would like someone to be able to help and do actual financial transactions for you. You need to maybe be added to a bank account or perhaps just transfer on debt, depending on what makes sense for you, which is something Sam can help you with.
The other thing that always comes up, I feel like, on the financial side is, estate liquidity, you know. If you’ve drafted a will and you have a trust and we’ve funded all of the assets properly and everything’s set up correctly, we need to know what the plan is right, when something happens we need to pay X dollars to this person, or this person or persons gets the property, or what have you, and you know, I need to be mindful of what types of Investments you’re in, what tax consequences there are depending on the type of investment, to make sure that we can actually fund and fulfill your wishes in here after documents, so, estate liquidity is something we consider as well.
Sam: We’ll often work hand in hand with Cara and other financial advisors that clients may have, to ensure that once their trust is established, that their trust isn’t just established, but it’s funded, and a good analogy I like to use is, it’s a garage, it’s a garage that your lawyers built, that has all the specs and particulars for that fancy door that you wanted, but it’s only protecting the things that you put in that garage. And once a trust is signed and dated and you leave my office, it’s likely not funded with anything other than your property, your personal property. But your bank accounts, IRAs, everything else that you may have is kind of outside of that garage and is not protected yet. Now, the job, as the client with the attorney’s help and generally with your financial advisor’s help, when you have somebody like Cara who’s familiar with these rules, in the ins and outs of Trust, you have them help you park that car in the garage, put those assets in the Trust, or list that Trust is the beneficiary and that makes for a very smooth transition from the lawyer’s office to the financial advisor’s office to home to where you’re happy, and comfortable and you understand your plan as a whole.
Chris: Yeah, that’s great. Thank you both for giving that insight. That’s really important on conversation that a lot of our family members face in the home. So, if anybody has any comments about that, who’s viewing, please leave them below.
Now, I wanted to talk about who would be a good candidate for a Living Trust.
Sam: Cara kind of mentioned earlier and she kind of hit the nail on the head there with regards to people and this is you know that, people will keep, in certain circumstances can deviate from this, but almost 99% of the time, the individuals who have blended families, who have family businesses or minor children or various properties not in this state, almost 100 percent need a trust. There’s really no other way to properly plan, to accomplish your goals without a trust and the most common I see are ….
Chris: What type of Trusts? Another question I’d like to ask is what type of Trusts are out there?
Sam: The most common type of Trust, and we’ll stick to the more basics for this today, the most common type of Trust that we’ll see is a Revocable Trust. So, Trust that somebody like yourself or like Cara is the guarantor of that trust, would be able to change, amend, revoke throughout your life, include additional people, remove additional people, etc. And only after your passing would those assets begin to be distributed, would that trustee who you name begin to take charge, and in certain instances with regards to Medicaid planning, VA planning, or other long-term care planning, we will deal with Irrevocable Trusts. Not to be confused with the Trust that we’re speaking about that Cara and Chris would have, but an Irrevocable Trust is generally if you’re divesting yourself and we’ll likely save that for a different day, but that’s if you’re doing some Advanced Medicaid planning, some Advanced Tax planning etc.
And the big difference from an Irrevocable Trust to a Revocable is, when somebody gives money to an Irrevocable Trust, they’re ultimately giving up control of those funds, generally set in the type of Trust that we deal with.
Cara: And it takes it out of your Estate, you know, your gross Estate after you pass, and that’s something that you know, depending on your assets, it kind of falls onto either outlier, like you mentioned, it may be on the lower side of investable assets or Medicaid planning, but if you have a higher net worth as well we may be doing some, you know, gift tax concerning you know, maybe we work out a plan prior to your death, or we do some Revocable Trust planning to try to help that, you know, those numbers constantly change, right now it’s still a pretty large situation from a gift tax amount that you can you know, you can gift. But that may sunset in 2026 unless congress makes it permanent. So, you know, there are definitely things that change. I know Sam…
Chris: Is there a minimum amount of gift?
Cara: Yeah, so, right now it’s a little over 12 million per person, but it used to be 5 million and you know there’s unlimited spousal deductions and things like that. But you know, if it goes from 12 as a you know, couple, you could be 24, back down to five, and five and ten, that’s a big difference you know. There are some people that could potentially fall in the middle of that, and you know, as assets continue to grow and inflation happens, I know those numbers sound kind of big, but …
Chris: Is that non-taxable gifts? So, if it’s given, no tax on that amount?
Cara: Well, there’s a whole calculation too.
Chris: (Laughing) I think we’ll talk about that in another topic guys!
Sam: To a certain point, so wealthy, the IRS comes in and tax you very heavily. In those situations which the laws is ever so changing, in those situations you do Irrevocable Trust to get those assets out of your estate to ultimately pay the least amount of taxes at the end of the day. And we do a lot of that planning as well.
Chris: That’s why you have a good attorney to be able to handle that type of scenario.
Cara: And I think why you need to revisit your plan, you know. Sam and I talk a lot, I’ll meet with clients, oh yeah, I took care of all of that, well 15 years ago, you know.
Sam: And on that point, 15 years ago that plan might have been proper, and you might have had the certain type of Trust for that plan, but now with the asset level and the tax level being so high, it’s unnecessary and you usually want to have the spouse continue on with the assets with no checks or balances, which is exactly what that type of planning does not allow.
Chris: Now, can you architect the type of each client that you guys typically have for each other, for let’s talk about with Cara now, you’re sitting with somebody, they need financial planning. First is that I have a two-part question, is that what age group are individuals coming to you and talking to you about your services, and then also Architects what each client typically is coming and discussing with you.
Cara: Yeah, I mean my average client is probably somewhere around 50, but I obviously have younger clients and older clients and there are different situations that need to be addressed at different points in your life obviously. So, some of my younger clients it’s things more like, do they have children you know, do we need to create some guardianship situations, what would happen, where does the money go, and then who’s in charge of it on the behalf of our children if something should happen to the two of us, and I know a lot of times people think, you know, well, there’s one of us here and one of us, but if you get in a car with your spouse at any point in time, you know, this is something that needs to be addressed. So, a lot of times with the younger side, do we have life insurance, you know things like that, those early planning type of things.
And then on the older side, it’s more of the conversation, are you having these later in life financial conversations with your adult children you know, if you’re an older client, or your other family members. You know, a lot of my single adult clients who maybe don’t have children, they’re often people I refer to Sam, because there isn’t a clear-cut you know, if they’ve got three brothers and parents and own property in two states and all of a sudden who does that go to, and how. So, those types of, you know, who makes the medical decisions, who do I want, mom or dad to do it, or do I want my brothers to do it, you know, and those types of things come up, especially with some of my clients planning alone. So, I try to you know, be that planning partner.
Chris: Or someone is getting married too, you know, and now they’re gonna …
Cara: That’s the other thing about the timing. If you haven’t checked your stuff in 10-15 years, you know, sometimes maybe your kids have had changes, maybe one of your children is divorced and you know, did you just put your child’s name on there, or was it …
Chris: And how many times we’ve been on meetings together even someone would ask you to revise their plan too for them you know. Something that was in there that they did it 20 years ago.
Cara: And the law has changed too, like Sam was saying. So, you know, it’s just often a good idea to take a look at that every so often.
Chris: Now, what would you architect the type of client that you have, an age group that discuss about you know, these important topics that we’re discussing today.
Sam: I deal with different age individuals, probably the average age of my clients is 45-50 or so, but I deal with clients who are dealing with the loss of their mom or dad, as young as 18-19-20. And I deal with people who are doing Estate Planning as young as 20-21-22. And you know, you’d be amazed at how good these, and I say this varies ever so lightly, because I’m a kid myself, how good these kids are saving, because they’re doing a great job and it’s kind of nice to do that type of planning as well, because just like Cara mentioned, they have no spouse, they have no kids, they maybe have a mom or dad who are well off and they’re not going to provide for them and they’re planning otherwise who they’re going to give money to is interesting. Maybe some Charities, friends, family, and mix of things and I guess it’d be interesting in the inverse with regards to those younger individuals helping or administering Mom or Dad’s estate, it’s nice to see them and kind of advise them to see somebody like Cara, see somebody to make sure that that money does you more benefit than it would be a detriment.
Chris: Yeah, and what is typically included in an estate plan? I guess we’ll start out with Sam, coz you were discussing that. What’s the whole process of that?
Sam: Well, I kind of touched on that a little bit earlier, but you’ll get all the Power of Attorneys, the Will, a Trust if one would be applicable for you. You get the HIPAA authorizations, a document allowing to make funeral decisions, a deed for the property and you know, I think some of the other documents are somewhat ancillary but relate to personal property assignments, allowing you to specifically devise, as we say, personal effects, anything sentimental, and then usually at the end of it, we’ll prefer that a client is dealing with somebody like Cara. They have a nice spreadsheet of assets and at that meeting we give the financial advisor a call. She now has that trust name, she now has that trust date, and that will start being implemented in the person’s plan, and Cara will kind of talk about that when somebody has a Trust.
Chris: Yeah, what is on your side does it look like.
Cara: Yeah, well, like Sam was saying, funding the trust you know, putting something in the garage is kind of the important piece and that’s typically what I can help with you know. Once the Estate Attorney has taken a good care and put together the plan now we have to name things right, so if you’ve got IRAs, or you have non-retirement accounts, or bank accounts or whatever it is, we have to decide, does this, is it best suited to go from one spouse to the other spouse, and then the Trust, or do we just name the kids, does he want the Trust on the contingent, on the non-qualified dollars, not necessarily on the retirement dollars you know, because there are tax implications and benefits for some of these different types of assets, so it may not necessarily be blank it, that the trust goes on everything you know. So, usually Sam and I work together and knowing the client well at this point we’ve all you know, both met with them many times, usually we can say, okay, I think let’s put this in the name of the Trust, this one is spouse to spouse, and then the kids you know, whatever, depending on the client’s situation, capacity of the kids and the age and you know, stuff like that.
Chris: And there’s two type of Financial Power of Attorneys too as well too – there’s health care and then there’s also financials too.
Sam: So, there’s two types of Power of Attorneys, one being a health care, one being a financial. Usually in addition what we’d like to do with HIPAA authorization as well, although inferred in that one document, one of the Power of Attorneys, it’s always good to have that separate independent document for HIPAA release.
Chris: Yeah, I know a lot of people wait to be able to get that document until later on in life, but they can do that at any time I’m assuming.
Sam: They certainly can. It’s usually better too, so you’re not having to send myself and one of the other attorneys down to do, as Cara somewhat alluded to, to do capacity checks to make sure that person is still able and competent and not being unduly influenced, things like that, because that can be a hurdle in and of itself and only opens up possible issues if there’s family animosity and we see that often. We’re seeing that now.
Chris: Yeah, exactly, and so, I really appreciate you guys in your time really so much about discussing these important topics that we face with our family members and in the community. I just wanted to go with both of you guys – any closing statements and advice that you can give to anyone about today’s topic?
Cara: I would just say you know, don’t be afraid to have the conversations with your family right, it doesn’t have to be all doom and gloom. You can just know that you are doing this from a place of love right, and it’s really gonna make things simpler, it will save you money, it can save heart aches you know, all kinds of things to just do a little bit of time and planning ahead can really just you know, improve the situation for everyone.
Chris: Thank you Cara for being on our show.
Cara: Of course, thanks for having me.
Sam: And the advice I would give, and I see this often, do a deep dive and have a conversation with your loved one, your family, your professionals that you deal with, figure out where do you want things to go and what do you have. I often see individuals who aren’t dealing with somebody like Cara and they’re ever so unfamiliar with what they have, what it’s in, where it’s at, and even how to transition it in the midst of this and that’s never a good sign. So, just get a plan and what that plan is, just make sure you have one.
Chris: Get a plan and start early, that’s what really the consensus on this whole podcast show is.
Everybody, if you have any questions or comments, please leave it below. Also too is that they are accessible anytime. If you can go on our Affinity Senior Care website page and we have a resource page, you can go ahead and find information to contact Sam Lebowski and also Cara Gardner as well.
Thank you so much for being on our show, until our next topic, and we’ll see you all again.