Mario Godoy: Well, welcome to this video. This is the three common mistakes in a state planning. This is Mario Godoy and Steven Novak with the estate and probate legal group. Uh, Steve, you just want to say a quick hello. And so today we’re going to be talking about what we see in probate courts. Uh, so for those of you who are unfamiliar with the process, um, you know, we represent folks in both estate planning. Uh, we also represent folks, uh, that need guardianships and we represent folks that are in probate court. And so probate is where we are all destined to go to. If we don’t do a good job of transferring title of all our property, uh, at our death or before deaths. So these are all things that we can help you with, but even when you do make a plan, uh, there are some common mistakes that we see.

Mario Godoy: And so we’re going to cover that today and help you protect your family. Um, and so with that said, you know, let’s, let’s discuss, you know, do you have an estate? Uh, so this is a common question that we get often from folks, because it sounds like a very fancy word. Uh, and it is, it is a formal term. It’s a formal word that describes all the property that is in your name, only things that you solely own that are not transferred to someone else at your death. And so anything that comprises in that, uh, becomes your estate and that’s what you open up in probate court.

Mario Godoy: So one other thing is that folks often make a mistake and think that, you know, everyone thinks that an estate plan only deals with death, but you know, what we see in guardianship, uh, what we’ve seen happen in instances, uh, where family members become disabled is that at a great estate plan, contemplates both issues that you will deal with in your lifetime and also with after death planning. So it should really comprise of two different things. And this is why you need to revisit your estate plan every couple of years, because you’re, as your life changes as your needs change, your estate plan needs to be updated. So let’s talk about the components as far as lifetime planning. So I mentioned disability a little bit earlier in the thing is disability includes not just the physical incapacity, but it also includes the legal capacity to sign documents.

Mario Godoy: Um, you know, having the mental capacity to execute decisions on your behalf. It’s not always just physical. And so, you know, the us census in the last one that we did identified that one out of five people live with a disability. And so what they also found was that people over the age of 80 or 71%, you know, a higher chance of becoming disabled. And so what that means for you is that we need to look at the lifetime planning in place here. And so you want to provide for your care during any period of disability or incapacity, you want to try and minimize any family conflict that might arise, especially if you haven’t talked about what you would want done. And so you could have different members of the family looking to step into that role to help you in arguing over what your wishes may have been, um, you know, coordinating with tax and other legal planning strategies is another part of lifetime planning.

Mario Godoy: That’s where we look at gifting and how that comes into play with your state plan. You want to provide for smooth transitions to decision-makers in your life. The courts will follow what the legislator legislature has put in place, but that might be different for you. You may want someone else as a key decision maker who may not get to become one, if you haven’t laid this out. And, you know, I think the other big key thing is that, you know, you want to try and avoid court imposed guardianship. You want to try and pick who you would want to make decisions for you. Uh, now Steve deals with the big, you know, the big context of guardianships. I don’t know if Steve, is there anything that you might be able to add to that topic?

Steve Novak: Yeah, absolutely. Um, one of the things that I wanted to bring up is, you know, we, we do certainly have extensive experience in guardianship court and, you know, the, the cases vary and generally speaking, it’s, it’s not a place that you want to be. Um, you know, as Mario said, it’s, you know, an estate plan, you even during your life can give you the opportunity to make certain choices. And more than one of those important choices is who would you want to have making decisions on your behalf? Who would you want to have, you know, paying your bills, would you want to have deciding where you could live, if for whatever reason you weren’t able to make those decisions for yourself. And if you’ve gotten, you know, an estate plan in place that takes care of those issues, then you can make those choices and the people that you’ve chosen that can go ahead and carry out those decisions for you.

Steve Novak: The problem is, is if you haven’t made those decisions, you know, you have informally, um, you know, whether it’s a power of attorney or a trust or whatever the case may be, you haven’t gone ahead and made those choices while you still had the capacity to do so then if there’s some sort of disability, some sort of event, something bad happens to you and now you no longer have that voice, then unfortunately, you know, whether it’s your loved ones, your family members, your friends, you’re going to wind up in, in guardianship court. Um, just, just as a brief example is even in the context of, of spouses, you know, whether, you know, say a husband and wife is that if something happens to the, the husband, then, you know, there, the wife might still be able to make medical decisions and things like that by virtue of being a wife.

Steve Novak: But if husband needs to sign contracts, you know, if, if you’re in the middle of selling, selling a house and husband is on the deed or something like that, you know, you need a husband to do, do legal things, you know, to make decisions for him with, with finances or assets. Now, wife, even though, even though she’s, you know, his spouse, she has to go to guardianship court, she has to pay an attorney. She has to pay a bond. She has to, you know, take all this time and all these expenses when, you know, a relatively simple of state plan that provided for lifetime planning would have taken care of that for

Mario Godoy: It’s like a yearly accounting as well, right. That you would may have to go back year over year.

Steve Novak: Correct. Correct. And, you know, depending on where you’re located, you know, what County you’re in, you know, the, that, that accounting could basically be, you have to present, you know, every single penny of what you’ve done with respect to your spouse’s assets, which, you know, I mean, when most spouses here that, you know, they find themselves in guardianship court, they’re just bewildered. Um, you know, and as we’ll kind of, we’ll talk about, you know, later on in the, in the webinar today, but, you know, there’s the existence of a, there’s something called a bond, which is basically an insurance policy that, you know, courts require guardians to post. Um, and, you know, it’s, you see situations where people are, you know, they’re basically just completely flabbergasted that, you know, why would I, why would I need to post a bond? You know, why would I need to, you know, this is my husband we’re talking about, and it’s just, that’s what the law requires.

Steve Novak: Um, and so one of the other things that I also wanted to add is that, you know, there are situations where if you, you know, that you may find yourself in where even when a light, you know, a person has powers of attorney or has a trust, you know, if you feel that there’s issues, you know, regarding someone who’s vulnerable, a disabled person, an elderly person, then, you know, guardianship court may, you know, is still, is still a forum to kind of address those issues. Um, and you know, and that’s something that we do here at the firm too.

Mario Godoy: Yeah. You know, I think one of the key things that I’ve learned in, in coming to see these cases is that if you can’t have someone, you know, if you don’t pick someone, then there’s a possibility that the court might pick a public entity to represent you financially. And so, you know, it’s not just about going to a judge. Now, you might have like a government employee decision maker involved in the financial decisions. Um,

Steve Novak: Great point. Yeah, no, every, every County has, what’s called a public guardians office. And, you know, if they feel that, you know, there’s, there may be someone out there, um, you know, who needs help, they feel they need help. And if there isn’t anyone in place, you know, like, like you were saying, Mario, to make those decisions, then you know, the public guardian is empowered to go ahead and try and step in and become that decision maker. And now obviously, you know, they, they, you know, they’re, they’re doing it for the person’s, uh, you know, for their wellbeing, they’re split, they’re still supposed to act in their best interests, but, you know, I hardly think that’s a, uh, you know, that’s a position that anyone really wants to find themselves in is, you know, it’s, it’s essentially when people say ward to the state, you know, that’s what they mean.

Mario Godoy: And so these are all issues that we can help you with here at the firm as you’re going through. Um, and I think, you know, the next component that you really want to start looking at is what, how about after death planning? And so this is what everyone thinks about when they think about, you know, estate planning. Um, and so everyone looks at, you know, the avoid, the need, you know, avoid the need for probate court. Um, what I’ll tell you is that, from what I’ve learned, looking through and looking at different cases, sometimes probate court can be a good thing to have a judge overviewing that process, but, you know, for privacy purposes, for the ability of being able to get assets to a family member, family members that survive you quickly, that’s why you might want to avoid probate. Uh, you want to find a way to efficiently handle those after death, you know, the administration of your assets, you want to try and preserve your family harmony.

Mario Godoy: Uh, you don’t want them fighting over your assets after you’ve left this world. And so you can leave a written plan that can then help, you know, heal your family during that time period, as opposed to tearing them apart. The other aspect is maximizing the tax strategy, and we will kind of cover that a little bit, because if you’re married, you may want to look at, you know, where the exemptions are in, you know, in what you might do as far as making any gifts and you know, how you would set up, you know, multiple trusts. If that’s what, what’s the best strategy you want to protect your beneficiaries for as long as possible, you can’t protect them forever, but with the greatest state plan, you can ride that out and provide for them in the longterm. And I think, you know, one of the other benefits of after death planning is if there are minor children or, you know, even a young adult that needs to grow into managing that asset, that’s being given to them. You know, I, if I was 18 and I was, you know, getting a multimillion dollar state, I think I’d probably, you know, in one weekend, eat that up in Vegas. Um, so, you know, this is isn’t, this is a great component to make sure that, you know, someone who needs to grow into managing that asset can also be given that opportunity. Um, Steve, I don’t know if there’s anything you want to kind of add about the after death planning. Yeah.

Steve Novak: I just wanted to touch on one of the, uh, you know, more recent kind of examples of where, where maybe advantageous to avoid probate is. I know we had a lot of frustrated clients this year, uh, when courts were closed due to the pandemic, um, just because, you know, it, it extended kind of the time that everything took to get in the state open to get letters of office issued. Um, and, and, you know, courts handled now via zoom and, uh, you know, it is, it will be for the foreseeable future. And, you know, they’ve worked hard to get procedures in place, but, you know, who’s to say that something might not else might happen in the future where, you know, courts are closed or are access to the courts are somehow restricted, which again, kind of texts on, you know, who knows how much time to, uh, you know, basically getting the assets where they’re supposed to go. Um, so, you know, if you had trust a trust or something like that, um, you know, then something, another plan that you could handle outside of probate court, then you know, that wasn’t a concern for you.

Mario Godoy: Yeah. I think that’s a great point. I think what folks don’t realize is that when you open an estate, it’s not, you know, it’s not as quickly as a law and order episode. Uh, you’re not in and out in 60 minutes, you know, you’ve got six months just for the creditors to come up and say that, Hey, I have a claim against the estate. Um, and so in the midst of COVID, when things are going to be continued, uh, for the public safety and you can’t get the court proceedings, then that’s even longer that your family can’t get into those assets and use them. And so it, you know, Steve brings up a great point on that, but, you know, I think that existed even pre COVID. Um, you throw in anyone who wants to line up and make a claim or something to argue about. And, and now you’re looking at more than six months before you can close out that the state of yours.

Mario Godoy: And so that kind of brings us to the point of today is that we see so much in probate courts, um, not just in our own client list, but also, you know, watching cases and watching other attorneys and seeing the different issues that arise. But there are three mistakes that we see over and over and over again. And so we want to make sure you do not make those mistakes. And so we’re going to cover that today. So with that said, let’s talk about mistake, number one, uh, Steve, if you want to take it through.