Erik Rome: [00:00:00] If you have a will, the will only controls what assets go through probate. So where I'll see this come up is I'll have clients that had set up wills years ago when their kids were young and they had [00:00:15] trusts that were going to be created by the will that says they get the property. Some when they're 25, some when they're 30, some when they're 35, but they designated their kids as contingent beneficiaries on all their accounts.[00:00:30]

Well, that would have just paid to the kids and never gone through probate and that will they signed never would have had anything to do with how the property is distributed. So the best way to think about it is your will doesn't help you avoid probate and it [00:00:45] only controls assets. That have to go through probate.

Voiceover: Welcome to Metcalf Money Moment, the podcast. Unlock financial clarity and confidence with expert insights to achieve your [00:01:00] goals. Hosted by Jep Graham, Ethan Hutcheson, and Eric Wymore. Each episode offers decades of combined expertise in wealth management, retirement planning, and more. Join us for practical strategies to inspire your financial journey.

[00:01:15] Now your hosts.

Jeb Graham: Welcome to Metcalf Money Moment. Podcast. My name is Jeb Graham with Metcalfe Partners Wealth Management. I'm here with co hosts, Ethan Hutcheson and Eric Wymore. And we have a special guest [00:01:30] today, Eric Rome with Sage Law. Uh, Eric is someone that we've worked with for a number of years and also works with a lot of our clients on estate planning issues.

And, uh, we thought it would be a really good opportunity today just to bring him on. And maybe pick his [00:01:45] brain about a few things and hopefully relay some information, uh, to our clients and to anybody that's watching, uh, about stick planning. So, Eric, welcome and thanks for coming.

Erik Rome: Absolutely. Thanks for having me.

Hopefully, I'll be able to share some insight today that'll clear up some of [00:02:00] the confusion that's out there on these topics, so.

Jeb Graham: I think you will, so.

Erik Rome: We've got, we've got

Jeb Graham: two

Erik Rome: Erics

Jeb Graham: today, so bear with us. That's right. One of them ends with a C, one of them with a K, so that's a big differentiation there. Um, no, but, uh, so, so Eric [00:02:15] Rome, what I'll tell you is, uh, you know, we were talking about a few of the things that we get from a lot of our clients and I think we've had a lot of clients that have inherited money as well as ones that just want to start going through, through an estate planning process and probate's always the thing that comes up, right?

Is [00:02:30] everybody wants to make sure that they avoid probate and we thought maybe a great way to start the podcast would just to talk a little bit about what probate is, how do people avoid it. And just maybe start there. Absolutely.

Erik Rome: Yeah. Probate is a court process [00:02:45] that helps transfer ownership of property that you own when you pass away.

And it is, uh, usually best to avoid it for a few reasons. One is. There [00:03:00] are costs that are associated with probate that would not otherwise be incurred and do not bring any added value. You know, for example, court filing costs, attorney's fees, uh, publication costs. There are also delays with probate [00:03:15] where you can, uh, be done with everything.

You sold the house, you're ready to distribute the property, but you have to keep it open for six months in case a creditor comes forward. And then it's a public record, which, uh, is important to some people. Uh, if they [00:03:30] don't want all of their information out there and in the public domain, um, it controls what happens to your property that is in your name alone with no joint owner and no beneficiary designated that survives you.

So there are ways [00:03:45] to avoid it and we get to that here in a moment.

Jeb Graham: Okay. So yeah, so basically what you're saying is it's, it's a process, it's a lengthy process and trying to, is there anybody that completely avoids probate or does everybody have at least A couple of things that go through [00:04:00] there because there's confused because I know people talk about putting together a trust doing stuff like that.

Is it, is there a way to avoid it altogether with everything?

Erik Rome: Absolutely. Yeah. If all of your assets, um, well, let me first talk about how we avoid it. [00:04:15] Um, but it really comes down to kind of doing your homework and making sure everything's properly titled. Um, you know, one way to avoid probate is to have a surviving joint owner.

So this is pretty common between spouses where they have joint bank accounts, they own their house jointly. [00:04:30] One of them passes away and the house, uh, the bank account just go to the surviving spouse with no probate. Another is a beneficiary designation. So you designate a beneficiary, and I'm sure your clients are familiar with that because you're going through that, and you're in an [00:04:45] intake or a review process.

Who are your beneficiaries who, you know, should receive it? And as long as there's a beneficiary that survives you, then there's no probate needed for that account. And, and a third way is a revocable trust, uh, you [00:05:00] either title assets in that revocable trust while you're living or you can designate the trust as the beneficiary.

So I work with my clients to identify all of their assets and then based on the plan that they've set up, we use [00:05:15] one of those three techniques to avoid probate. And when I have clients that have advisors like you, I make sure and provide the instructions To the advisors so they can kind of drive that process with [00:05:30] any accounts that they, you know, control or life insurance policies.

Ethan Hutcheson: So if you have a will, because a lot of a lot of people say, hey, I've got my will, I'm okay. Uh, I think I know the answer, but I'll ask it. If I have a will, I don't have to go through probate, [00:05:45] correct?

Erik Rome: No, that's incorrect. Um, if you have a will, the will only controls What assets go through probate. So where I'll see this come up is I'll have clients that had set up wills years ago when their kids were [00:06:00] young and they had trusts that were going to be created by the will that says they get the property.

Some when they're 25, some when they're 30, some when they're 35, but they designated their kids as. [00:06:15] Contingent beneficiaries on all their accounts. Well, that would have just paid to the kids and never gone through probate and that will they signed never would have had anything to do with how the property is distributed.

So the best way to think about it is your will [00:06:30] doesn't help you avoid probate. And it only controls assets that have to go through probate.

Ethan Hutcheson: Dang, I was wrong about that one.

Jeb Graham: That was a softball there, Ethan.

Ethan Hutcheson: So, looking forward, I mean, you mentioned revocable [00:06:45] trusts and irrevocable trusts. So, after, you know, you've gone through probate.

Or not gone through probate. When is the appropriate time to establish a trust, I think I'd ask?

Erik Rome: Yeah, you know, there's different reasons why we set up trusts. [00:07:00] Some may be because you have very young beneficiaries. You have, uh, you know, minor children and we don't want them to have to. having a conservatorship set up with the court, and then they get all the assets when they turn 18.

You may [00:07:15] have officiaries that are not young, but aren't able to manage their own assets. They are not responsible. They have other. You know, issues with whether it's a cognitive delay, it's a, um, some sort of substance [00:07:30] abuse, maybe they're in a bad marriage. There's any number of reasons. We don't want to just give the assets to them in their name.

Um, one really important thing, um, is centralized management. So let's say you have three kids [00:07:45] and you could just name all the kids as a beneficiary on your house by a transfer on death deed or a beneficiary deed, but. You don't think your kids are going to be able to agree on whether they sell it, whether one of them moves in, if they're going to [00:08:00] sell it, what realtor to hire, what offer to accept.

If instead you have to go through a trust and you have one person who may be one of your children or maybe some independent trustee, then they can just go ahead and, and administer [00:08:15] everything and your kids don't have to agree on anything. So there's a number of reasons. Sometimes we'll set up trust for a state tax.

Reasons. I don't know that that's really the focus of today's. Discussion. But when I'm working with clients, I try to [00:08:30] figure out what are your goals, what are your concerns and then work backwards from there to figure out whether a trust makes sense or whether we can rely on beneficiary designations to accomplish that.

Jeb Graham: And I'll tell you, we get a lot [00:08:45] that question so much from our clients, which is, you know, when is it that I need to set up a trust? And when do I hit that point? And I know, you know, kind of one of the explanations. This is something we actually got from, uh, And, uh, advisor that was a little bit older than us, but he would say that, that [00:09:00] really you can do most things that you can do in a revocable trust just by naming TODs and beneficiaries and all that stuff.

And, and where they can become very helpful is when you want to try to, he called it control things from the grave. Right? So [00:09:15] like if you, to your point earlier, like if you have a, a child or a grandchild, or maybe you just have a grandchild that is only 12 years old and you want, you want to pass them down money, but you don't want them to inherit money when they're 12 years old.

And so you just want to put [00:09:30] stipulations as to when and how they get those dollars. And, um, and you know, that's, that's an explanation. Would you say, is that a pretty, pretty decent? Are we on, on the right track there? Is there some additional things that a trust is going to do that just naming TODs and [00:09:45] beneficiaries won't do?

Erik Rome: Yeah,

I, I think that, uh, what you're touching on there is, is how is this all going to be carried out there? Um, and of course, if you have a minor beneficiary, Uh, just giving them money outright is usually not [00:10:00] efficient with the conservatorship and the fact that the second that they turn 18, it's theirs without any controls.

But I really think it depends on who are, who's going to be carrying this out, the relationships with the beneficiaries, [00:10:15] whether they get along and can work together. You know, I, I have an example where I've got children or clients with one child and they want him to get everything out right. But if he doesn't survive them, then they've got nieces and nephews that are [00:10:30] all minors.

So what we did is we set up a trust, but the beneficiary is the son and the contingent beneficiary is the trust. So in that situation, if the son survives. Then there is no trust administration that's [00:10:45] needed. He just processes, you know, death certificates and everything goes to him in a very efficient manner, but the trust is there is a placekeeper.

If he doesn't survive them, then then we have management for all these younger beneficiaries. [00:11:00] So this is where I get to, uh, the answer that lawyers give to a lot of questions is yeah. It depends, right? I have, I have to figure out who the, um, who the beneficiaries are, who the people that are involved in and [00:11:15] what the client's goals are and what works for one family may not work for another family.

Eric Wymore: All right. Well, um, first of all, congratulations on having a cool way to spell, spell Eric. I always wanted it with a K when I was growing up, but when it was time to, you know, draw out your signature, I [00:11:30] could never make the K well. But anyway, um, we've talked a lot about documents that, uh, Help pass along assets after passing.

Are there any documents that, uh, an individual would need while they're still alive?

Erik Rome: That's a great question. And, [00:11:45] and by the way, you spell in Eric with a K works really well. If you never want anyone to spell your name correctly. So I think you got the right spelling. Um, yeah, a lot of people. So, uh, think about wills and trust and what happens when I [00:12:00] die, but that's a really good point.

Uh, a lot, a lot of people aren't thinking about what happens if I'm alive and I can't make my own decisions or I need help making my decisions. And statistically speaking, that's likely to happen to a lot of us at some point. So, [00:12:15] um, I recommend for everyone to have a durable power of attorney, which primarily covers financial decisions.

And then I prepare what's called a healthcare directive, which is a combination of a living will, which talks about how you don't want to be [00:12:30] kept alive artificially in certain situations, you know, uh, if you have a terminal illness or something. And then a healthcare power of attorney, where you're designating somebody.

To help carry out your decisions if you can. And then I also [00:12:45] throw in a HIPAA authorization. So all of these people are allowed to talk to your, your doctors when needed. Um, and, and I, I think it makes sense for everyone, whether they are, um, you know, somebody who is hosing on a [00:13:00] retirement, uh, near end of death, but also I have a lot of clients who.

Um, have all their kids just turned 18 and they have always been able to help their kids with, um, you know, things with the doctors and with talking to [00:13:15] banks and the second they turn 18, they go, Oh, wait, they won't talk to me anymore. And so that's fairly common that I'll, I'll set this up for, you know, young adults that don't really need a full blown estate plan, but they need somebody, you know, to be able to help them if, if, uh, [00:13:30] If, if they, you know, get in a car wreck or something like that.

Jeb Graham: So I had

a question for you there, Eric, and this is a little bit maybe off script, but, um, you know, can you talk about just the importance of. Or, or your views on someone getting their [00:13:45] children involved in that estate planning process. And I know this is something I've been through, you know, with you actually.

And, um, I just feel like that can be super helpful for like a lot of our clients, you know, that are, that have kids that are going to inherit money. Um, Just kind of getting them all in the [00:14:00] same room and kind of going through that. And is that something you do a lot? And maybe talk about that.

Erik Rome: It is something that, um, I do on occasion.

It depends on the family, the dynamics. Um, I think it, [00:14:15] especially for the kids to have some idea or expectation on that there is an estate plan and what it is. Having expectations, realistic expectations, usually makes the process go better, um, after [00:14:30] people have passed. Also, to the extent that the children, um, there's questions that my clients don't necessarily Care about, but they go, well, let me check with my kids to the extent that we can get their buy in or their feedback.[00:14:45]

Again, that can make the process go better. Now there are families where the dynamics are such that that is cleaning up can of worms or clients are comfortable sharing some of those financial details. So you could kind of do a little bit of that. Hey, we [00:15:00] did our estate plan. We did it with this law firm.

Here's the name of my financial advisor, you know, all the different advisors, Everyone who's involved so they know who to contact if something happens, but maybe not share the full [00:15:15] details of the estate plan with them.

Jeb Graham: I, I think that too. And that's, that's cause we've been through obviously many, many clients that have passed.

Um, it's just, you know, if there's anything you can do to mitigate, like we've, I've just seen clients who are fighting with [00:15:30] brothers and sisters and things like that after. Their parents passed away. It always just seems like such a tough situation and just, I don't know if you have any advice on ways to ways to mitigate that, you know, or avoid it.

And sometimes to your point, depends on the family dynamic and I'm sure it's just completely [00:15:45] unavoidable in some circumstances,

Erik Rome: but

well, sometimes I think that, uh, children's feelings are hurt if they're not appointed. As the executor or as the healthcare agent and one of their siblings is. And, uh, sometimes if they know [00:16:00] why they may know why, well, you live further away or you have a very busy career or you have three young kids at home.

Um, and sometimes if they talk to their kids, they may say, well, you know, I know you want me to be first, but I think it [00:16:15] makes more sense for somebody else. So if you're having those discussions with your kids, they're first of all, not going to be surprised. They have expectations. And they may actually be able to provide some feedback that helps my clients make the right decision.

[00:16:30] Um, I've had times where somebody reaches out to me after their parents have passed and they say, Hey, I'm upset my sibling was appointed as the executor. And I think it should have been me. Well, do you trust your sibling? Are they going to do [00:16:45] a good job? And they go, Oh, they're fantastic. They're going to do a great job.

Like, Oh, your, your parents did you a favor and you should be upset because it's an important job, but it's not always a fun job or a glamorous job. So, um, now there are [00:17:00] families, if they stopped, talked about this at, at the holidays that it would turn into a big fight. So, I mean, that's something that we kind of, uh, we have to.

It has to be the right conversation for the right family

Ethan Hutcheson: . I got a fun one here for you, Eric, and this is [00:17:15] coming out of left field a little bit, but if you had to pick one thing in your profession that you commonly see families mess up or do the wrong thing or in action, what's one thing that you run across oftentimes that just is not done well?

Erik Rome: [00:17:30] I think it's along the lines of what we were just talking about. It is appointing the wrong Person or people for certain jobs. They, they appoint, um, somebody based on birth order or they appoint somebody [00:17:45] based on what their profession is. And they're not thinking critically about is this, does this person have the right temperament?

Do they have built in con, uh, conflict of interest? You know, that the family owns a business, and that's the kid who runs the [00:18:00] business. Now they're. They're doing everything and the other kids are kind of locked out on the information. And so, um, doing a lot of estate and trust, uh, administration. So I help clients after people have passed.

I get to see fact [00:18:15] patterns and scenarios where I can identify things when I'm on the planning side that may seem similar where we want to avoid something. So you can have the best estate plan drafted with the wrong people in charge and it can go really poorly. [00:18:30] To me, it's in, in the answer may be that it's none of the family members.

It may be a family friend. It may be, uh, you know, for a corporate entity or somebody who carries it out. So it's. I think that's the biggest thing is, is who's, [00:18:45] who's in charge and are they the right person or company to do it?

Jeb Graham: You actually took that right into one of the things that I wanted to know is just, you know, the difference between naming one of your children as the trustee versus getting a corporate trustee.

Is [00:19:00] there a, is there a certain other than if it's maybe siblings that don't get along? Is there like a certain net worth figure that that makes sense at a certain complexity figure that that makes sense at or kind of when would you recommend doing that?

Erik Rome: I don't [00:19:15] think dollar amount matters. The one thing I'd say about the net worth is if it's too low, a corporate trustee is probably going to decline to serve because it's uneconomical.

Their fees would eat up the estate. So that that's one [00:19:30] factor. Uh, but once you're above that threshold, you could have a very simple estate that, uh, you know, it's all IRAs and investment accounts, but it's 10, 20 million and you could have a complex estate [00:19:45] that's a million dollars because they've got a bunch of real estate and, you know, a small business.

And so, um, I don't think it's tied to dollar amount necessarily. It really comes down to do we need an independent person, and maybe it's not [00:20:00] that the family doesn't get along, but nobody has the ability to carry this out. They would all, um, not know what to do, and they'd miss filing tax returns, and they would miss, you know, some other deadlines.

[00:20:15] So, or they're all busy, and they all live in different parts of the country, and we don't want to burden them with this task, and so we appoint a corporate trustee. But one thing I will say, whenever I appoint a corporate trustee, I always give the beneficiaries the [00:20:30] power to remove that corporate trustee and appoint a different corporate trustee, because there may be somebody that they have a relationship with now, but the people they know, they'll leave.

Or, uh, that bank gets acquired by some big [00:20:45] national bank and they're no longer the same group that they were before. So, um, I, I do like to make sure we're not stuck with a particular bank. If, if that makes sense,

Eric Wymore: Eric, how often should someone review their, their estate plan?

Erik Rome: That's a great [00:21:00] question. For most families where they're setting up an estate plan and they've kind of got your traditional assets, you know, house, retirement accounts, life insurance, so on.

I would say every three to five years they should at least [00:21:15] look at it. Who did they appoint? Has anything major changed with their asset holdings? Has anything changed with the people they've appointed? Um, and, and if, if there's enough there, then let's, let's get together and talk about it. I have other [00:21:30] families that have just complicated situations because they're constantly Buying and selling businesses, they've got taxable estates.

And so we're maneuvering those laws and we just have probably monthly, if not quarterly touch points. And that, [00:21:45] that's kind of a different thing. But for most families, I think every three to five years, but there could be items that come up. Um, you get a new, you have a new grandchild that. The child gets married, a child gets divorced, you have a large inheritance or [00:22:00] windfall.

So, there's, there's things that come up along the way.

Ethan Hutcheson: So, I think what I heard you say is my parents trust that was notarized in 1995 should probably be looked at.

Erik Rome: Especially if trusts were set up when the tax laws, the estate tax laws, [00:22:15] We're so drastically different than they are to now, uh, today. And right now, the exemption is almost 14 million.

And back in the 90s, it was 600, 000. And so there are a lot of estate plans that were set up for estate tax [00:22:30] planning in the 90s and early 2000s that that's no longer necessary. And it's going to overcomplicate their, their plan.

Jeb Graham: Real quick. So, so on that point, because we do get a lot of clients that come in and say, I have an estate plan, I did a trust, I did this, and their estate [00:22:45] planning attorney either retired, is out of the business, you know, maybe has passed away by now.

Um, is there like, I'm assuming our clients or anybody can come to you and basically what's involved with you taking that estate plan over? Is it [00:23:00] just updating the documents, reading them, getting the norm? Explain that process.

Erik Rome: Yeah, so I'll take a look at their documents. Sometimes I'll do, you know, a lot of times if I, I get a copy of their documents before we meet.

I'll do a really high level overview, you know, how is this [00:23:15] set up? What type of trust is it? And then I will meet with the clients and figure out, Hey, let's, let's not even think about the plan you have now. Let's talk about your current situation and what you want. Then I'm able to go back to their existing documents and see how different.

[00:23:30] What they have right now versus, um, what they want is, and sometimes it might mean a, a minor amendment, we may be making no changes or we may just restate the whole document. So, um, it's, it's different for everybody, but, [00:23:45] uh, and then updating the asset, uh, titling, you know, you asked me earlier, Ethan, about the, the one major mistake.

Uh, this, uh, second on that list would be not keeping up with asset titling. You, you buy and sell a [00:24:00] house, you get different vehicles, move banks, move employers, have a new 401k, and you don't, you're thinking about that when you're doing the estate planning, but five years later, you're not thinking about that.

Those are the assets that sometimes go through probate. [00:24:15] Um, our, our asset that are obtained after we did the planning.

Jeb Graham: Well, very good. Well, Eric, I think this has been awesome. And thanks for coming on. Uh, I think it's a ton of good information. Uh, can you tell the listeners, you know, how they could get ahold of [00:24:30] you?

You know, if you, if they needed to do an estate plan or update their estate plan. website?

Erik Rome: Yeah, absolutely. Um, uh, it's stage law. You can email me at E Rome at sage. law. Uh, my phone number is [00:24:45] 9 1 3 3 8 2 4 1 2 6. So you can also ask us and, you know, we'll get a. Get you guys in touch.

That's right. Eric with a K.

Do that as well. Eric with a K. There's only one of them out there and he's right here on this, uh, on this podcast. [00:25:00] So, well, hey, thanks for coming on. Um, and we'll be talking to you soon. So this is Metcalf Money Moment, the podcast. Thanks for listening and we'll See you soon.

Voiceover: Thanks for [00:25:15] tuning in to Metcalf money moment, the podcast. We hope today's episode provided valuable insights to help you unlock financial clarity, confidence, and peace of mind. For more expert advice and resources, visit metcalfpartners. com until next [00:25:30] time, make every money moment count.

Disclaimer: Jim Graham, Ethan Hutchison, and Eric Wymore are registered representatives with and securities offered through LPL financial member FINRA SIPC investment advice [00:25:45] offered through WCG wealth advisors, a registered investment advisor. WCG Wealth Advisors and Metcalfe Partners Wealth Management is a, are, separate entity, entities, from LPL Financial.

The opinions voiced in this podcast are for general information only, and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, [00:26:00] consult the appropriate qualified professional prior to making a decision.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.