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Estate Planning
352 Plays3 years ago
Thinking through the impacts of our absence in the world seems both a luxury and intangible compared to the problems and opportunities that we face in the present. But as our guest Charles Bottenberg reminds us in this episode, “Whether you have an estate plan or not, you have an estate plan.” The choice is between control or chaos, chance or intention.
This week we’ll talk about all things estate planning, including what decisions go into an estate plan, the tax implications of your estate, and how to think about trusts, guardianships, and protecting those you intend to leave things to. Also, ways to structure your estate plan that allows you to still put boundaries on how money/property is made available to them, letting you still parent/guide them in your physical absence. Plus, some encouragement that all of this is easier than you may think, as long as you have the right help.
To get in touch with Charles:
Email: cbottenberg@ahlerslaw.com
Phone number: 515-246-0335
LinkedIn: LinkedIn
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Transcript
Introduction to the Uncommon Life Project
00:00:02
Speaker
Everyone dreams about living an uncommon life, but how we define that dream is very different for each of us. And for most, it's a lifelong pursuit.
Meet the Hosts: Brian Dewhurst & Philip Ramsey
00:00:11
Speaker
Welcome to the Uncommon Life Project podcast. We're going to introduce you to people who are living that life or enjoying the journey to get there. We're going to also give you some tools, tricks, and tips for starting or accelerating your own efforts to live an uncommon life.
00:00:27
Speaker
A life worth celebrating and savoring.
Guest Introduction: Charles Bottenberg, Estate Planning Attorney
00:00:30
Speaker
Please welcome your hosts, Brian Dewhurst and Philip Ramsey. Hello and welcome, everybody, to The Uncommon Life Project. I am your host, Philip Ramsey with the Aaron Kramer. Oh, man, I can't wait. This is actually a good one. And we've been wanting to get this gentleman on the show for quite some time. This is a topic that everybody knows that you need to do as you an adult. This is like adulting at its finest.
00:00:57
Speaker
We're talking about estate planning. We have a guest on the show. His name is Charles Bottenberg.
Charlie's Unique Journey to Law
00:01:03
Speaker
He is an estate planning extraordinaire attorney that works downtown in Des Moines, Iowa at Allers and Cooney. Thank you so much for being on the show. Welcome to the show, my man Charles. Thank you. Thanks for having me.
00:01:15
Speaker
Yeah. First, um, this is going to be amazing only because you are have like a personality. There's not a lot of lawyers out there that I'm like, let's get them on the show, but you are one of those people. So thank you. Do you want to go by Charles or what do you want to go? Charlie Charles. Hey you. Okay. As long as it's not, you know, that idiot over there, I'm usually pretty, uh, pretty, I don't even go by my first name. My legal first name is Richard. So I got used to just ignoring extraneous data thrown at me. So don't worry about that.
00:01:42
Speaker
Yeah. Okay. Good. All right. My first question is how did you get to where you're at today? And one, can you believe people pay you to do what you do? You love what you're doing. And I think that's probably what attracted me most about you and having on the show is you absolutely love what you do. You love helping people and people pay for it. So that's really the kind of genesis of the show. If you're the first time listener, um, we have a lot other like regular listeners, but if you're just first turning in because it is the one and only Charlie, I get it. Welcome to the show. Uh, so tell us,
00:02:11
Speaker
How did you get to where you're at today currently?
00:02:13
Speaker
Yeah, well, first and foremost, um, I, I am very happy
Entrepreneurship in a Tough Market: Founding a Law Firm
00:02:17
Speaker
that people pay me. So I'm going to start with that. Cause I do have, you know, student loans and a mortgage and all that, but no, my, um, my path to being an attorney is, I'm not going to say it's unique by any means, but I would definitely say it's atypical. Um, so I came down to Drake university in the late nineties for undergrad. Um, I actually have my bachelor's degree in biochemistry, cell and molecular biology, which is, um, amazing.
00:02:43
Speaker
There's more than one attorney out there with that degree. In fact, my, one of my college roommates at one point in time, um, he ended up going to law school. So I know there's at least two of us out there with, uh, biochem degrees from Drake from the late nineties or early twos that better attorneys, but, um,
00:02:58
Speaker
I was not a model student in undergrad. I don't know. I just didn't like it. It wasn't my thing. I didn't try hard. I wasn't invested. I would explain it best as I didn't know what I wanted, and so
Challenges in Digital Estate Planning
00:03:12
Speaker
I didn't try. There was just not a whole lot of understanding of where I needed to go. So I got out of undergrad, got married, got a job actually in IT at Wells Fargo at a help desk.
00:03:26
Speaker
Oh, that was your favorite job. That was my favorite job. Let's just be honest. It was a lot of fun. And it was one of the easiest jobs I've ever had, not because it was like, oh gosh, people are easy. But the tasks that they gave me were not overly strenuous. There was not a whole lot of mental energy used. So I recognized early on that I wasn't going to be happy in that long term.
00:03:52
Speaker
Not there's anything wrong with that but my family kinda has a pretty good case of wanderlust and you can't really sit still so I went back to Iowa State and started my MBA.
Simplifying Estate Planning
00:04:04
Speaker
In my MBA classes, well one of them was taught by a, I call him a reform litigator, he was litigation attorney and then went to be like a
00:04:13
Speaker
strategic business analyst kind of thing. And then also a partner in the law firm up at Ames. And we just got, you know, kind of the chatting and they both said, Hey, you know, your personality and the way you think just kind of, you know, kind of matches law. That's something you should look at. Now, fun fact, the guy up in Ames claims to this day, he told me not to go to law school, which I mean, clearly is not true. I wouldn't have done it had he not pushed me, but
00:04:38
Speaker
But he claims no responsibility for my life decisions, which is fair. That's 100% fair.
Estate Planning for Blended Families
00:04:45
Speaker
So I said, OK, well, I didn't have the greatest undergrad grades ever, and that's a problem. Took the LSAT, which is the law school aptitude test, did pretty well. I didn't ace the thing by any means, but I had well enough to get in for sure. Applied to six, eight law schools, got into three or four.
00:05:05
Speaker
I was about to make my decision and the day before I was going to make my decision, my wife told me she was pregnant with our second kid. That pretty much ended my decision. Not that there's anything wrong with Drake University Law School. I had a great experience at Drake and I'm really glad I went to Drake. Commuting to law school
00:05:23
Speaker
with one small child was going to be a ridiculously difficult task with two. I was like, no, we're not even going to do it. Just going to stay and go to Drake, which has worked out really, really well, because the opportunities that Drake offers, especially being here in Des Moines, being the only law school here in Des Moines, you just get exposed to a lot of things that other people have to travel for. So I went to law school.
00:05:48
Speaker
finished law school, the job market back in 2012, 2013 was not awesome. Sort of said, hey, I bet we can just start a law firm. That can't be that hard, which spoiler alert, it is stupid idea, but we did it anyway. And so two of us graduated, started a law firm, operated that from the beginning of May of 2013 to October of 2020 when we joined Allers and Cooney.
00:06:12
Speaker
So let's talk about that little hiatus there because I remember talking to you remember this like yes, that's good. That's the show I was asking where you on that on that fateful call. Yep. Yeah. Yeah. And we talked to you and the partner at the time and what were you trying to do exactly because I thought it was brilliant idea.
00:06:30
Speaker
So we were trying to essentially develop a mass marketable streamlined, for lack of a better term, uncomplicated estate planning tool that would allow someone from the comforter of their home to log into,
Guardianship vs. Financial Responsibilities
00:06:51
Speaker
we wanted, you know, bank security, very secure website, fill in
00:06:57
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personal details, answers, a series of questions to sort of figure out, you know, what options, if you will, within the estate plan do you need? And then the goal was basically at the end of it, it would kick out a fully formed estate planning packet, which they could then either come into our office for a small fee to have executed or have an email to them and they could go to like a bank or somewhere else that would have a notary and a couple witnesses to effectuate the estate plan with
00:07:26
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you know, with some instructions on how to do that. And it was sad the day that we put the final nail on the coffin on that project. I still think in the grand scheme of things it has, I mean, obviously there's big name companies out there that do those sorts of things. None of their documents are tailored to Iowa law, right? None of their documents understand the nuance and the complexity of the Iowa probate process.
00:07:55
Speaker
Our theory was that there's a market for that and the goal was to go into a company and offer it as an employee benefit.
Common Estate Planning Mistakes
00:08:06
Speaker
We know a lot of first responders or public safety or police individuals go into an entire precinct or entire fire department and just
00:08:16
Speaker
These people need estate planning. They're in high stress, high conflict sometimes, dangerous jobs, and a lot of times they don't have any of those documents in place. The theory was, how can we remove as many barriers to entry for people as possible? The flip side was we were trying to do it.
00:08:36
Speaker
for lack of a better term, as, as, as, as clean on a budget as we could, right? We're trying to make it very inexpensive, cost efficient. Yeah, basically cut the price down by, you know, two thirds compared to normal. What was the final thing that made you put the nail in it? Um,
00:08:53
Speaker
The logistics of how to make it work with a two-man law firm, basically, we needed to either make it our main focus or let it go. It just didn't make sense to try to make it our main focus. There's too much
00:09:13
Speaker
There's too much
Charlie's Client-Centric Approach
00:09:14
Speaker
work. It was a two-year process. We did a couple beta tests on some businesses that are owned or run by friends of ours. It was really difficult to eliminate all of the manual labor portion. The whole goal was that it just spit the document out and there was no manual labor involved. There was no actual input from a human being that was necessary. It just never
00:09:39
Speaker
It just never materialized. I'm sure somebody who, uh, is smarter than me could have made it work. Um, you had a growing family and like, obviously some needs there. You have student loans you've already talked about. Like we got bills and my practice was taking off and doing really well. So it's kind of like one of those, okay, I'm going to have to give up, you know, the left hand to make the right hand work. And that didn't,
00:10:05
Speaker
Anyway, it would have involved a lot of traveling as you go out to like, I'm gonna go to Storm Lake or I'm gonna go to, you know, and it would take maybe a day or two of travel to get up there. And it just didn't.
00:10:15
Speaker
It was a project for a single person or somebody who didn't have small kids, and both of us were not single and both of us had small kids, so not exactly overly functional. Maybe timing. Okay, let's go into this because I really do want to focus on why is getting an estate plan for you and your wife will and trust? Why is it important? I think this is something that, as you get older, you know you have to do.
00:10:38
Speaker
But so let's just talk a little bit about that whole aspect of it and kind of like, um, for our listeners, just why would you even want to think about this or why do people do it? That kind of question.
The Importance of Adaptable Estate Plans
00:10:49
Speaker
Yeah, absolutely. So, um, what a lot of people don't understand is whether you have an estate plan or not, you have an estate plan. Okay. What does that mean? That's, that's lawyer talk, right? Like you're not making any sense here. Um,
00:11:04
Speaker
So the Iowa Code chapter 633 has basically a default estate plan that the Iowa legislature over the course of many years has assembled for every single individual who dies subject to the jurisdiction of Iowa and it lays out when you die, this is where your stuff is going to go.
00:11:24
Speaker
And as a default estate plan goes compared to some of the other states that i have examined it's actually not that bad i think it makes a lot of really good assumptions i think it makes a lot of very logical assumptions that for most people are going to relatively flow where they want to go so we don't need to do anything i'm just kidding here is the problem one if you have small kids the iowa default does not limit
00:11:52
Speaker
Basically, depending on the type of asset,
Choosing Trustees and Guardians
00:11:55
Speaker
so we're subject to something called the Uniform Transfers to Miners Act. Basically, it's a fancy way of saying, hey, you're under the age of majority.
00:12:03
Speaker
you can inherit assets, but you can't directly control them. The problem is the way that Uniform Transfers to Minor Act works is those funds come out of that custodial account and they go into the hands of that beneficiary, you know, 18, 19, 20, 21, you know, somewhere in that range, there's a whole bunch of factors that are involved in that. But most of my clients would prefer to see that number be say 25 or 30 or an age where
00:12:32
Speaker
a little more maturity has taken over. So that right there is a huge problem. Two, I don't know that it's ever been true in society, but the default that the code kind of goes with is it works really well if you're on your first relationship or you don't have kids from a previous relationship or you're married, maybe you're domestic partners, but you're not married.
00:13:00
Speaker
In today's society, you have more and more blended families, you have more and more what would not be the 1950s traditional relationship sort of a thing happening.
00:13:15
Speaker
I honestly think has always been there. It's just maybe not been as noticeable to people.
Estate Planning Misconceptions
00:13:20
Speaker
But anyway, so as a for instance, um, if I have, if I'm married and I have a child from a previous relationship and I pass away the Iowa default is that my child from a previous relationship gets half of my, my non jointly owned assets and my spouse gets half of my non jointly owned assets.
00:13:38
Speaker
That might work great if I married my spouse when my child was six months old because I had just come out of a relationship or just gotten divorced or whatever that was and we got married. I was a single parent and they're raising them together and that's what you would want.
00:13:55
Speaker
But does that make sense? If you get married in your mid fifties and you've you've accumulated most most of your wealth and you're trying to keep stuff separate and you don't have a prenup or anything like that, you know, maybe not. Or what happens when that in that same scenario, you know, you get married kind of the we call it the Brady Bunch Plus, where, you know, you come to the relationship with kids, your your significant other comes a relationship with kids and then you have a kid together. Right. The the way that the code handles that is very logical. But in my experience, not very in line
00:14:25
Speaker
with how people are expecting those sorts of things to happen. As a Francis, most of the time, people would leave a life insurance policy or two to take care of the kids and they would want the bulk of their assets to go to their spouse in order to help their spouse live because they view that as this is the priority of what I'm trying to do. Well, the default obviously doesn't take that into account.
The Necessity of a Signed Will
00:14:52
Speaker
Or sometimes it's the opposite. Hey, my spouse is independently wealthy. They don't need any of my stuff. It needs to go to my kids. Well, the default code doesn't take that into account. It's a very math-related, cold-calculated, this is what we're going to do, which, again, for a sizable chunk of people might work. But the number of times that we run into situations where it doesn't work is very, very high. And then the other thing that we run into, or at least I run into a lot, is
00:15:22
Speaker
When I'm planning for families and we sit down and we talk about who is that person or persons who you would want to take care of your minor children if something happened, not every time is there an instant answer that both parties agree on. I was going to say that I think that one of the reasons I've seen so many people struggle to get this process done is you have to have some really hard conversations with their spouse.
00:15:48
Speaker
Like that, like who's going to take a shot? Yep. Yeah. I don't know. Like me and my wife, it was a hard conversation for us and then we get one and then our attorney was like, all right, but you need a second one too. And I was like, what? Yeah, we do like backups. We really do like backups. Yeah. Yeah.
00:16:06
Speaker
Well, and so here's the thing. And here's where I was going with that. The number of times
Making Estate Planning Relatable
00:16:10
Speaker
that we're planning not because I want this person to be in charge of my kids and it's I want to make sure this person is not in charge of my kids would shock you.
00:16:21
Speaker
Oh, yeah. I mean, out of 10 people, three or four of those conversations are okay. Well, I don't know that I really care, but it can't be your mom or I don't know that I really care, but it can't be your sister or your brother or your cousin or your dad or you know, there's just someone in their family because let's be real family dynamics exists. There's someone in their family that's toxic or that isn't
00:16:44
Speaker
Maybe it's siblings and they were raised together, but they have very different worldviews. One spends a lot of money on everything and doesn't understand how to save or how to budget. The other one is the exact opposite. Those worldviews just conflict. You may love your sibling. You may get along with your sibling outside of financial conversations.
00:17:05
Speaker
if your parenting style and that person's parenting style or fiscal responsibility style aren't a good match, you may not want them raising your kid because you want your kid to follow your idea, not their idea, right? And Charlie, another dynamic people don't realize too and are talking about money is, and then correct me if I'm wrong, I mean, you're the expert, but whoever's the beneficiary of your child, if you don't set it up and they, you know, both spouses die, they also control the funds for that child as well, don't they?
00:17:35
Speaker
Not always, but I do think if somebody is qualified, so essentially what you're talking about, so there's two different
Open Communication and Plan Adjustment
00:17:46
Speaker
There's two different legal paths. You have what's called guardianship and you have what's called conservatorship or custodialship. Guardianship is over the physical person, right? So if I'm the guardian of someone, I am in charge of their physical person. I have choices over where they go. If we're talking about a minor child, I can sign off on medical procedures. I can check them in the daycare. I can sign permission slips. I could do all the things that a parent would be able to do.
00:18:12
Speaker
The conservator or the custodian is the person who's in charge of finances. Sometimes it's the same person, sometimes it's not. If you don't have anybody named and you need a custodian, because that's typically what you would set up or a conservator, if the individual is qualified to be the guardian,
00:18:32
Speaker
I would say probably 97 times out of 100, they're also going to be the conservator or they're also going to be the custodian unless it's a situation where they don't want to be. Sometimes you may agree with their parenting style, but you're like, you're really bad with money and I'm worried that this life insurance policy that I'm leaving behind, somebody leaves behind a million dollars in life insurance, right?
00:18:58
Speaker
Money changes people. They want their kids taken care of. I'll give you a personal example. I have three kids. I'll give you a personal example only in the fact to say that I have three kids.
Ensuring Wishes and Protection
00:19:08
Speaker
The rest of this is 100% made up. If any of my emails or whatever hear any of this, it's not you, I promise. It's not the names that have been changed to protect the innocent. It just doesn't exist. It's purely hypothetical.
00:19:18
Speaker
So I got the lawyer stuff out of the way. So I have three kids. Good job. Compliance is off your back. Yeah, that's good. Yeah, no. You got to get that out there. But so if I'm leaving, if the guardian of my children also has three kids, and something happens to my wife and I, and they go from a family of five to a family of eight, there's some real logistical challenges involved. One, does your house fit that many children? Well, most people's houses,
00:19:46
Speaker
don't, right? We're not, I mean, unless you have a really big house, most people's houses don't have enough bedrooms to make all that work. Now you can, you can squeeze people together, you can find ways to make that work, you know, if it's, if it's in-laws, it's, you know, let's get all the cousins, get the girl cousins in some rooms, get the boys, you know, whatever, you can make that work. But a lot of times, especially in bigger cities where people are, you know, they have, they have the exact amount of space they need, you're talking about an upgrade. Well,
00:20:13
Speaker
Who's going to pay for that upgrade? Is that upgrade going to come out of the trust fund? Is that upgrade going to come out of the funds that are meant for the kids? Same with the car. If you have a family of two kids and you have a Honda Civic and all four of you fit in it, great. I dump my three kids on you. Guess what? You don't fit. Guess what?
00:20:35
Speaker
Buy like a conversion van or a suburban
Charlie's Personal Estate Planning Journey
00:20:38
Speaker
or you know something that may have a six figure price range well okay who's gonna pay for that again you know i think most reasonable people would say you know yeah well the kids are the ones you know me dying is technically it but the kids are the ones who are sort of forcing this situation the fun their funds should perhaps help with some of those expenses well long long when the way to get my point here's my point.
00:21:02
Speaker
If the person who is in charge of spending the money is also the person who is in charge of the people, i.e., they're the guardian and the conservator and the trustee and the custodian, the only person, really, that they have to convince that it's a legitimate expense is themselves. And I think it's
00:21:26
Speaker
Not common to have issues like these, but the adage is if you have an issue where the trustee is misappropriating funds or they are overspending funds, a lot of times it's because they're also the guardian and there's not those checks and balances. A lot of times we'll actually separate those roles and when we're naming them inside of a will or a trust or whatever,
00:21:46
Speaker
will name one person as the guardian and a separate person as the trustee. That can be because the guardian is suited for taking care of kids and the trustee is not, or that can be because the trustee is really good with money and the guardian is not, or that can just be, hey, we want to make sure there's some checks and balances. There's other ways to do that. There's naming a third party who's responsible for receiving and approving trustee reports.
00:22:13
Speaker
But the key
Steps to Setting Up an Estate Plan
00:22:15
Speaker
there is it's a lot harder to have financial malfeasance when people are looking over the shoulder. And there's never an easy way of saying this. As an attorney, you tend to kind of get a dim view on humanity sometimes because nobody has a phone and says, hey,
00:22:31
Speaker
Things worked great. I did all those things you told me not to do, and it worked great. No one ever does that. I get the phone call of, hey, so I know you told me not to do those things. I did them anyway, and it blew up in my face. Can you help me fix it? So no one calls me and says, hey, we had the same guardian and the same trustee, and it worked out fine. But you do get the calls, and you do see the cases, because when you're reading through the case law, no one sues because it went well. They only sued because it didn't go well. So you do tend to get a little bit of a jaded perspective, but
00:23:01
Speaker
Generally speaking, when funds are misappropriated, it's usually because there's not proper reporting or there's not proper procedures of looking at things. Our legislature has taken some major steps recently in redoing the whole conservator process.
00:23:17
Speaker
in requiring annual reports, requiring a lot of those things to be looked at and approved by the court.
Contact Charlie Bottenberg for Services
00:23:25
Speaker
But at the end of the day, somebody who has an estate plan who has a trust, that may not be court supervised. There's just some logistics that are involved in there.
00:23:34
Speaker
Because when you start talking about your lawyer language, I'm like, I don't know what you're talking about. But then you slipped in an example. I'm like, oh, yeah, that is a problem. That is a problem right there. So when you kind of give examples, it's like, oh, yeah, that's something good to think about. I've learned over the years that people appreciate the example because the lawyer language goes over their head. Yeah, for sure. Yeah, which shouldn't, but it sure does. So what questions should our listeners kind of be thinking about in their head before they come to you?
00:24:03
Speaker
to get like a will and trust done.
00:24:05
Speaker
Yeah, so I actually have a pretty common process among estate planning attorneys. I actually don't ask people to have any of those decisions made before they come and talk to me. And I also don't charge people to come and have that conversation with me. That's a big deal. Because look, at the end of the day, people are usually afraid of getting an estate plan for two reasons. One, they think they're going to kick the tires and they're going to get a bill from the attorney, which is fair. That happens sometimes. Or two,
00:24:35
Speaker
I think it's gonna be a really really really difficult process and the favorite thing that i hear at the end of almost all of my state plans as well that was really easy and the answer is it should be really easy this is not difficult it's it's hard right in some of these some of these decisions you have to make some of these decisions that you have to think about some of these concepts are can be mentally taxing but the process itself should be really difficult now that said,
00:24:58
Speaker
When somebody calls in or emails in, you know, we have a standard questionnaire form that we send out. It has a lot of biographical information, you know, what's your name, address, phone number, your birthday, same for your spouse, same for the kids, you know, some real rough, give me some idea of what your assets are. And a lot of people, you know, I used to get a lot of questions on that. I haven't recently, but I used to get a lot of questions. Well, how come you need to know that seems kind of personal? Well, one, I mean, business, right? Like, there's nothing more personal than,
00:25:27
Speaker
I'm going to help somebody take care of your kids after you die. So you want me to have that information. And two, how do you plan for something that you don't know what it is? So here's what I want you to do. I want you guys as financial planners, I want you to develop a retirement plan for somebody who's going to retire in 27 years, but you have no idea what their income is. And you have no idea what their assets are. And the answer, of course, is you can't because how are you going to do that without the information?
00:25:50
Speaker
It's going to be kind of hard. It's going to be kind of hard and very generic. And it's probably going to miss the mark, right? We can throw something together, but it's going to miss the mark. And as an example, there's huge difference in tax consequences depending on the type of asset you're leaving. Are you leaving a retirement account, you know, pre-tax 401k, IRA, 403b, SEP, any of that stuff, you know, 457? Or are you leaving life insurance? Are you leaving a stock account? Well, how those things are taxed on the back end is drastically different.
00:26:20
Speaker
And that may make a change in how your plan is set up. And the number of times that, you know, I used to get, well, I don't want to give you that information. And I would have to say, okay, well, then your plan is probably not going to work very well. And you get a weird look, right? Like, well, why would I use you? Well, the answer is you can't anyway. So we, you know, we, we asked for generic information and I don't mean like, you know, $57,842 and 46 cents in the checking account. I mean, like, I got like, you know, roughly 60 K, right? Looking for real rough numbers.
00:26:48
Speaker
Yeah. And then the last three, four pages of my estate planning packet are, what do you want to see? And here's three examples. Do you want everything to go to your spouse and then your kids? Do you want it to go to your kids straight? What do you want to see? And people typically either write something down or I actually expected everyone to write stuff down. More people just circle the one they want. And I was like, hey, that's actually really smart. I should have put a checkbox there. And then the last few pages are, OK, so who's making medical decisions for you if you can't make your own? If you're married,
00:27:19
Speaker
nine times out of 10, you're going to pick your spouse. But if it's a subsequent marriage, sometimes people pick their own kids instead of their spouse, right? So if you're in your, if you're in your sixties and your kids are in their thirties, um, and you get remarried, you may still want your kid as the one who's making medical decisions and financial decisions. Cause you have a longer relationship with that person than you do with your new spouse. Right.
00:27:40
Speaker
When I started getting asked questions, I was like, if my wife was out of the, you know, she was also incapacitated for both of her. Like, who would you want to do that? I was like, oh man, I started going through my brothers. And I mean, Anthony, if you listen to this, I'm sorry, but I'm going to say, I'm going to use you as an example.
00:27:56
Speaker
But I was like, Oh man, his heart is way too big. He would not pull the plug on me and he'd make my family go bankrupt. You know, cause it's like, he's just, he's too loving. He has too big of a heart. So it's not like a bad thing, Anthony. It's just, you know, so I'm like, I gotta find somebody that's a little colder to be able to pull the plug on me.
00:28:14
Speaker
Well, and then on the flip, this is perfect. This is a great segue. And then you don't want too cold, right? So I call that one the anti-mother-in-law provision, where no one wants their mother-in-law to be the one who gets to pull the plug. And I love my mother-in-law, and she would not pull the plug on me unless it was 100% necessary. But no, so a lot of times people pick each other or pick the spouse as the primary. But I deal with a lot of people who are not married or are not in a relationship. Well, then who is it? Who is that person? And then who's that backup?
00:28:43
Speaker
And for two people, husband, wife, two kids, been married for 15 years, the quote unquote normal, and I don't mean that, but you know what I mean? It's what society calls normal these days. That can be a very, very difficult decision. And on a medical stuff, normally, not normally, a lot of times, spouses pick different people, right? People pick their own sibling or their own parent, et cetera. Well, let me do the same thing for financial. And not every attorney does this, but I actually request or
00:29:09
Speaker
humbly ask and I'll do it the other way if people want to. But hey, you guys should pick the same backup. Everyone looks at you like, well, why would we do that? And the answer is, if you have a joint checking account, and you need to make sure and keep in mind that this all made a lot more sense before auto pay, because auto pays a thing and that kind of, you know,
00:29:27
Speaker
takes care of most of this stuff, but if you have a bill that needs paid, you don't need two people with the ability to pay that because just think about a group project that you did back in high school or college or whenever the last group project you did was and two people are responsible for doing something.
00:29:42
Speaker
what happens is either a and this is the one that you want to happen both people do it and a bunch of work got duplicated which is not the end of the world it is on a group project but in this particular case you know your bill got paid so it's not the end of the world but the more common one is option b and that is neither one does it because the other one thinks they're doing it.
00:29:59
Speaker
So we normally say, hey, you should pick the same person. A lot of times if we're naming a trustee for kids funds, it's that person because it's kind of the same role, but you're alive but incapacitated versus the trustee as you've now passed and they're managing funds for the kids. So a lot of times you can just sort of slide that through there.
00:30:20
Speaker
And then you know the other two big decisions and i honestly i think is probably the more important decisions are going to be you know who's raising kids if something happens to you and who's managing the kids funds if something happens to you guys and the. Really is always the interesting one that's that's the one that i want people to focus on the end of the day if you die with nothing or you die with ten million dollars somebody's gotta raise kids right so raising should be the important yeah.
00:30:45
Speaker
Yeah. So I want to get into this quick. Cause like, I know this is important. I don't, people don't realize they can do this, but it's like parenting from the grave, you know, like, cause I know for us, like we, when we set ours up, it's like, I can't ever say this right. So you're going to have to correct me, but it's like a testimony, Terry trust. Yep. Yeah. There we go. And we have a set in there, like, you know, my daughter gets so much money at so much time, you know, pay for college, pay for house, but like we get to be parents from the grave.
00:31:15
Speaker
Yep. And I think so many people and young parents don't realize that one. I mean, yeah, it's like, wait, I don't have enough money for a trust. Well, either do we, but we have life insurance policies. Right. We're worth a lot more dead than alive.
00:31:29
Speaker
I would challenge that. Financially. Financially, not existentially, right? We know what you mean. Yeah. I think, tell us more about how powerful it is, what you can go to the extent of being a parent from the grave. Sure. Ironically, very rarely do my clients take advantage of that.
00:31:54
Speaker
Very rarely do my clients do more than say, okay, I'm giving discretion to the trustee and then we're going to do some sort of a multi-phase payout where they get X percent or X fraction at 25 and they get some more at 27 or 30 and then they get the rest at 29 or 35. Whether they want a relatively short distribution period or they want more elongated distribution period. But you can do
00:32:23
Speaker
You can do almost anything in a trust. I had a couple sets of clients who...
00:32:32
Speaker
ironically enough for both of the Mormon faith. And I'm not so I understand but don't understand if that makes sense. But I know that, you know, going on a mission and I think it's right after high school 19 might be the right age, I'm not sure is really important to a lot of members of their faith. And so they've written into trust that the trustee shall pay those fees, they shall do
00:32:57
Speaker
this they shall do that not a may but they shall with the idea being that those funds. Have to be there even if even if it bank not bankrupt but even if it depletes the rest of the trust and it's not you know the quote unquote best way to handle it they wanna make sure that those things can happen.
00:33:19
Speaker
That faith also apparently has two different levels of marriage and I'm fuzzy on it, but my understanding is one is what we would consider just a traditional religious ceremony and then one is kind of a heightened or further ceremony. And one of the families wrote in cash gifts because if their kid was going through that, they would be providing a cash gift. Well, if they're not there, the trust is to kick out a cash gift to sort of take advantage of that.
00:33:45
Speaker
Um, you know, another really good example I have, uh, and these people were Catholic, not Mormon. So it's totally different, but, um, they have, I don't remember how many kids, multiple kids, five, five or six kids. They're Catholic. So probably five. Yeah. Well, I mean, my dad's one of 11, my father-in-law's one of 13. So, you know, with only three, I'm, I'm scraping the bottom of the barrel apparently, but, um,
00:34:09
Speaker
So they have multiple kids and their age gap was very, very large. And I have an eight year age gap between my oldest and my youngest. Their age gap, I wanna say was almost 18 years. Well, we put in place multiple funding formulas for the trust to take into that account and then move forward in time. What do I mean? So basically it was all based on the age of the youngest with the idea being
00:34:39
Speaker
That their oldest, they had paid all these expenses for, right? They had completely raised their 18 year old, but their four year old, they had not. And, you know, assuming nothing happened in the next few years, they were, they would have paid for their 18 year olds college. And at that point in time, their then eight year old, they had not. So they had a multi.
00:34:59
Speaker
Basically a matrix that said if you know if we die if the when we die if the youngest is from this age to this age This is the percentage formula and basically the younger he was the higher percentage of their estate that he got and then as he got older and I think the cutoff age was 22 ie, you know, you should be nearing the end of your college journey at that point if you're not already done and
00:35:22
Speaker
it sort of morphed into more of an even split across the board. And I thought that was a really artful way to handle the youngest ends up with the short end of the stick scenario, right? And even in my own plan, my plan is just equal to the three kids, but I recognize that, and my kids go to Dowling, or my oldest goes to Dowling, my youngest two go to St. Francis. But so, by the time he graduates from Dowling,
00:35:51
Speaker
I will have paid a lot more for his education than I will have for my youngest and so it's not it's not quote unquote fair and you can't see my air quotes because you know we're remote here but um and everybody else is on a podcast you can't see me um but the the overarching thing being that you can really do
00:36:07
Speaker
thoughtful job if you want to if necessary if it makes sense in your situation to try to you know build some equity into your estate plan taking into account that you know you have age gaps and you have you know needs gaps maybe maybe maybe one of your kids is special needs maybe one of your kids is you know super high achieving they may not need
00:36:30
Speaker
the same thing. They may not need the same plan. If you're in your 50s or 60s or 70s and you have a kid who struggled with addiction and struggled with homelessness and struggled with the ability to just have a steady paycheck and you have another kid who is a doctor, you would not treat them the same in the estate plan. No, you may leave them the same amount of money.
00:36:50
Speaker
You may have two kids in two different scenarios and you may leave them the exact same amount of money, but you should not hand the same amount of money over to the doctor that you hand over to the person who is struggling with addiction. You can set up something called a special needs trust or discretionary trust or a support trust. There's lots of different ways to handle it, but the long and the short of it here is... You're going to be parents from the grave.
00:37:15
Speaker
You get to be parents from the grave. Yeah. And that's a really cold and calculating way to say it. That's kind of, it's kind of morbid for a Friday morning, but I like it. Um, but you, but you, you know, you get to, um, you, you, you get to really continue to be a parent, even, even past you're gone. And even if, even if you don't want to do any of those extra fancy things, you're still being a parent from the grave because you're choosing who that person is to manage the funds and raise the kids. And I guarantee you,
00:37:41
Speaker
that anybody listening to this if they if they allow themselves to be honest with themselves and there's no one around to judge them they have somebody in their family that they wouldn't want raising their kids or put differently.
00:37:54
Speaker
They have someone in their family who would not be the first choice for them to raise their kids. And they have somebody in their family who would not be the first choice to manage the kid's money. And they probably have the opposite. They probably have somebody who are like, yeah, that's the right person for the job. And you get to make those decisions when you have a plan. You don't get to make those decisions when you don't have a plan. Instead, you're asking the court to make those decisions. And I can tell you right now,
00:38:17
Speaker
The court's involvement in your family, unless you happen to be personal friends with, you know, the one judge who was on it, which by the way, they're just going to recuse themselves anyway. But let's just say that worked, right? They have no idea who you are. And they've got maybe 30 minutes of testimony from somebody, an hour or two, two days, you know, whatever.
00:38:35
Speaker
But they have a very much shorter and smaller sample size of what's going on and I can guarantee you they're not gonna have all the information. They're not gonna know about the dumb decisions that somebody made in their 20s and has grown up from. They may just see the dumb decisions and make the ruling on that. Or they may not know about the dumb decisions in their 20s that somebody has not grown up from but never got caught on that you know about that say, hey, I don't want that around my kid.
00:39:00
Speaker
It's very complicated. It is. And there's a lot of nuance. And I said, it's not that complicated, right? I said that on the front end, because here's the deal. 99 times out of a hundred, what I tell my clients to do is I say this, pretend I'm not in the room. I'm going to count to three. When I say three, both of you say out loud who the person is, who should met, who should be in charge of your kids. And I go one, two, three. This is only if they don't have a decision, by the way, if they have a decision, we don't do this.
00:39:25
Speaker
And so many times they say the same person and they just thought the other person is gonna say something else. I said, great, you guys agree, let's go. And if they don't, if they say different people, okay, well, here's your top two.
00:39:36
Speaker
How do you feel about that? And usually you can come up with some sort of a decision on that. And if you can't, then you're one of the one in 10 where the decision is not easy. I'm not saying you should flip a coin, but what I am saying is that any plan is usually better than no plan. And so an imperfect plan usually is going to do a better job of handling the situation than a lack of plan, right? Especially if you don't,
00:40:03
Speaker
want your kid receiving a bunch of money in their late teens and early twenties and you want to push that money out. Um, yeah, if I want to watch you, but there's no way at 18, could I inherit a bunch of money and be super responsible with it?
00:40:16
Speaker
My wife could've. How's that for a statement? I didn't say anything about me, but my wife could've. She could've. I want to do two things here. One, to just kind of pull off here. A lot of people think that this has to be a life event. This has to be like a 12 month decision. Does that make sense? Like you can always revisit this stuff. And I think that's a lot of reasons why people are like, ah, this is overwhelming.
00:40:38
Speaker
Well, just look at it as like an event that's going to happen and you're going to revisit this. And when you revisit it, you'll probably be alive. So you just have to figure this out for the next 12 months. Let's talk through it. Then when we want to change it, let's talk about it next 12 months after this. And where do we want to do it? Same. Leave it. Different. Change it. So like it doesn't have to be this concrete ironclad thing that you can't change. It's something that you can revisit often.
00:41:05
Speaker
Okay. So this is what I would say because I think one last thing on that. Yeah. Rely on your professional. Yes. So when you, when you, when, when someone hires you, do they micromanage and, or make all of their own investment decisions or do they look at you and say, well, what do you think? And you say, well, here's a couple of choices, pick one and they pick one usually. And they move on. It's the same thing with estate planning. I've done literally hundreds of these. I haven't counted. I might be closing in a thousand. I don't know. I probably am because I've been doing this a while. Um, I probably have done thousands of these.
00:41:36
Speaker
Guarantee you and I came up with what for that were that were different, right? I go. Yeah out of that thousand may maybe 0.5% aren't within the standard deviation I guarantee if you come in and it to me to a different estate planning attorney Whoever and you sit down and say this is my situation. They have a pretty good idea of how they want to handle it I'm pretty good at saying look, here's kind of your three main choices. Which one do you like and
00:42:01
Speaker
And then you pick one and then you move on with your life and you throw it in the, you know, in the fire safe or the gun safe or the safe deposit box. And, uh, generally speaking, people look at it 15 years later and like, wow, I need to get that thing updated.
00:42:13
Speaker
I think that's good. Here's what I would say. Cause when you'd finally get all this stuff done, you finally get all your decisions made and you give it to Charles and everything's great. You still have to sign it. Like that is something that I think a lot of people think it's done and they haven't signed it. So I just want to make sure that people know like, Hey, sign this thing at the end of the rainbow. And then it is ironclad, not ironclad, but then it's, it's official.
00:42:41
Speaker
It's a heck of a lot more ironclad than an unsigned will. Right. Very true.
00:42:46
Speaker
Oh, Charlie, dude, thank you so much for just your wisdom and just your enthusiasm. I just, I, I've personally used you. My wife and I, we enjoyed our time with you and you just made it, made it very easy. And so thank you for doing that. I know it's something that I felt after, after I was done, I just felt like, okay, we're adulting. This was the right thing to do. And I've been like counseling people. You gotta get this done. And I was like, okay, Phillip, don't be duplicitous. Go get it done.
00:43:13
Speaker
So listen, there's no judgment at all because I told you that I had a kid on the way in law school, right? And so my second child was born during finals of my first semester of law school. My third child was born after I had my own law firm and he was 18 months old before I had my own will. So there was no judgment. People come in.
00:43:34
Speaker
And my wife initiated the process, not me. She called me and was like, Hey, so I'm like, Oh, yep, come on in. I'll have it done by the time you get here. There's not like, these are, these are super important documents. Everyone should have them. And look, if you're, if you're using an attorney who's judging you for not having them, it's like,
00:43:52
Speaker
using a financial planner who's judging you for making the financial choices that you're making, probably not a good fit. And you should talk to somebody else because there shouldn't be any judgment. No, that's not true. Sometimes there is, but they should at least keep it to themselves, right? Yeah, right. Good poker face. Okay. How do our listeners get, uh, just reach out to you if they want anything. How can they contact you?
00:44:11
Speaker
Oh, sure. So my email address is C. Bottenburg, C is in Charlie, Bottenburg, B is in Boy, O-T-T-E-N-B-E-R-G at allers, A-H-L-E-R-S, law.com. So that's C. Bottenburg at allerslaw.com. Or my phone number is 515-246-0335. Happy to chat, happy to review, happy to sit down and have a discussion. Some funny text messages.
00:44:37
Speaker
That's my office line so that you can do that all you want. I'm not going to get them. Yeah, let's do that. I learned early to not give up the cell phone. That didn't end well. But no, estate planning is a big puzzle. I view this as a big puzzle. People's lives are a big puzzle. How do I help you put the pieces together in the way that you want? It's what motivates me to get through my day. So it's a lot of fun.
00:45:01
Speaker
happy to work with anybody who needs help. Or if you listen to this and you said, Hey, I need one of those, but that guy sounds like a jerk or I don't like him, give me a call and I'll give you the name of one of my friends who does it. I, it's not, this is not, this is not cutthroat. This is not like, I have to, you know, everyone has to use me, whatever. Let's, let's, this is, let's get your documents in place. So things are better. That's what we need to do.
00:45:23
Speaker
Right. That's why you're on the show. I love your Uncommon. Thank you so much. You've been listening to the Uncommon Life Project. If you have any questions or any comments, we'd love to hear from you. Thanks for tuning in. Until next time, go be in common. Thanks. That's all for this episode of the Uncommon Life Project, brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.