Estate Planning for Young Adults with Joe Clark - 186

In this episode, I sit down with Joe Clark, CFP®, to talk about a topic that’s crucial but often ignored by young adults: estate planning. I know, it sounds like something for older folks, but trust me, there are simple, powerful steps you can take right now to make sure your assets go where you want them to go. We break down the jargon, simplify the process, and share real-life examples of why this matters way more than you think. Whether you’re single, married, have kids, or just starting out financially, this episode is for you.

💰 This Week’s Money Talking Points

How can you get started with estate planning?

What are some of the documents and terms you need to be aware of with estate planning?

How can you bring up estate planning to older members of your family?

⏱️ Episode Timestamps

03:00 – What is estate planning, really?

04:30 – Wills explained

06:00 – The importance of how your assets are titled

07:00 – Probate & how to avoid it

10:00 – Are beneficiary designations enough?

13:00 – Naming a guardian for your children

14:00 – Healthcare directives and power of attorney

17:00 – The Cheesecake Factory analogy

19:00 – Estate planning as an evolving process

21:00 – Joe’s biggest lesson learned in his 20s

📚 Resources & Mentions

Joe Clark’s website: YourLifeAfterWork.com

Book recommendations:

• Atomic Habits by James Clear
• Tiny Habits by BJ Fogg

Transcript

Speaker: 0:00

Welcome Money Buddies to this week's episode of Money Talk. This week we're talking about death, estate taxes, and starting while you're young. I'm your host, Skylar Fleming, and let's get talking. One of the scariest things to get started with is estate planning, plain and simple, but it doesn't have to be so complicated. I know that this is something with a direct impact in my life, so I'm excited to bring it all to you as well, who are in that young adult or just getting started with your money There's a lot to learn in the area of estate planning, but it doesn't have to be so daunting, and it certainly doesn't have to be so complicated. There are some simple things that you can do right away that take away some of that headache and stress that you start thinking about when you think a will or an estate, things like that becoming extremely stressful. Very quick. One of the simple things you can do is naming beneficiaries on your accounts. It may or may not be enough. We'll talk about that more in the interview today. But it's a great place to get started. But on a basic level, estate planning is just taking your current assets and making sure there's a plan or a path for them when you die. Not if when you die. That's why we have to have these conversations now and why this is one of the most essential money talks we're gonna have on this show. So we're gonna jump right out the gate with some definitions that you'll commonly hear with estate planning. So don't be alarmed by those. I wanna make sure to get those outta the way so you know what we're talking about. As we're throwing these different terms around, and once we get through those, we're gonna dive right into some actionable takeaways and some things that you can do right away so that you can take those ideas and apply'em to your financial situation very quickly. I don't have a Skyler story time for you today, so let's keep it going and keep it moving to get into today's interview. Today's Money Buddy is Joe Clark. Joe is a CFP and former adjunct professor at Purdue University and the managing partner of a trust services company, the Financial Enhancement Group Trust Services. Over the past 37 years, Joe has assisted more than 2,500 people navigating their financial journey. Joe has been married to his wife for 36 years. He has two daughters, two grandchildren, and a rescue hound dog named Rupert. He's a avid golfer and a scuba diver. But today he is here to help us talk about estate planning. So the money talking points for this week's episode are one, how can you get started with estate planning? Two, what are some of the documents and terms that you need to be aware of with estate planning? And three, how can you bring up estate planning to your older family members? And that's gonna be a fun one to talk about. So make sure to stay tuned for that third money talking point, but with those money talking points in mind, let's get talking and welcome Joe to the show.

Joe Clark: 2:31

Good morning, Skylar. Good morning, everybody. Happy to be here.

Skyler: 2:35

Yeah. I'm excited for this conversation because this is not one that you're gonna hear on most podcasts Talking to young adults. You're not gonna hear him talk about estate planning. it's a terrifying word because what does that mean? It means we're all going to die and we have to have a plan for it, or else there's gonna be a plan in place that the state puts in place for you. I've been learning a lot in the CFP education world. this is fresh on my mind, so I'm excited to teach it to everybody else as well. let's start out with just some basics of estate planning to help people understand what it is. what is estate planning? How do you define it?

Joe Clark: 3:06

Good question, Skylar. Let's redefine it. first of all, it's not just about when you die. that is probably one of the biggest mistakes that. people make in real life and where your audience, has two concerns likely. Number one, I commend you for being on the show. the majority of people aren't that worried about their money, let alone listening to this

Skyler: 3:30

Yeah.

Joe Clark: 3:31

I've been known as one of the few people who can make tax planning exciting. hopefully I can do that for you today in what I call legacy planning, not estate planning. understand estate planning is about others. That's why you think it's about death, Skylar.

Skyler: 3:45

Hmm. Mm-hmm.

Joe Clark: 3:47

fees, and the legal transfer of assets. What I like to teach in my firm is understanding that it's legacy planning that is about financial dignity and your reputation.

Skyler: 3:57

Mm-hmm.

Joe Clark: 3:57

so if you wanna look at it from estate planning that it's fees, expenses, and that legal transfer of assets is what you're trying to accomplish.

Skyler: 4:07

Yeah, I like that there's a little bit more to it than just what happens to your money at death. There's some opportunity, I think, especially if you get started on it earlier, there's opportunity to save on those fees and taxes. You could have gifting strategies as a part of it. There's a little bit more. That goes into it than just a will per se, which is our next definition of what is a will, like what is this document that everyone needs to have?

Joe Clark: 4:28

So a will hopefully for the younger generation is not gonna be an issue for the older generation. It's very much an issue. people tend to believe wills are this very powerful document. in truth, they're one of the weakest documents you will ever have.

Skyler: 4:44

Mm-hmm.

Joe Clark: 4:45

you're gonna tell people that they either have a will or don't have a will. you either die test state, meaning

Skyler: 4:51

Mm-hmm.

Joe Clark: 4:51

your own will or you die in test state, meaning you have the one the state provides for you. I'm married, I have two adult daughters and grandchildren. if I didn't have a will, the state of Indiana would take everything and this is key,

Skyler: 5:05

Mm-hmm.

Joe Clark: 5:06

everything that's in my name alone and give half to my wife and a quarter to each of my two daughters.

Skyler: 5:14

Mm-hmm.

Joe Clark: 5:14

That may not be what you want, but it never actually happens for most Americans and see the number one challenge in estate planning and legacy planning. understanding this technical term called funding.

Skyler: 5:30

Mm-hmm.

Joe Clark: 5:31

back when I was 21 years old, starting in the industry, my granny, said that she wanted everything to go to my dad and my uncle. I saw the title to her mobile home that she had purchased. It was all of the resources that she had, and the title was in her name and my uncle's name. Jointly,

Skyler: 5:52

Mm-hmm.

Joe Clark: 5:53

And I said, granny, that's not what you said you wanted. And she replied to me, the last living person allowed to do so, Joey, it's in the will. And I said, the will doesn't matter. It

Skyler: 6:07

Mm-hmm.

Joe Clark: 6:08

to the will. And so for years I had, and people laugh, but I had a will that gave my mom the Eiffel Tower, my dad, the Cubs, and my brother the Bears. Merely proving you cannot give away what you do not own.

Skyler: 6:22

Mm-hmm.

Joe Clark: 6:22

So that will is a legal document, number one, if you use a will, you're gonna go through a process called probate.

Skyler: 6:30

Yep.

Joe Clark: 6:31

wanna wind up in probate It's expensive, it's timely, and it's simply not necessary. The will by definition. Says the things that are only in my name, so not my house, which is owned with my wife and I, it's actually in our trust, not my Jeep, which is owned in both of our names. And now is in my trust. it's not my 401k, it's not anything that has a beneficiary

Skyler: 6:54

Mm-hmm.

Joe Clark: 6:55

It would be anything that was solely Joe's,

Skyler: 6:58

Mm-hmm.

Joe Clark: 6:58

Barbara's.

Skyler: 7:00

Yeah. That's such a good picture to paint because I think people don't quite realize that. And you mentioned a key thing we're gonna talk about later is beneficiaries. Or joint ownership. That's something you have to know about when it comes to estate planning or just planning who gets the money or the asset after you die and you started to tease into probate. And like you mentioned, it's the process where they figure out what's gonna happen with the will and they kind of work through the will and process it.

Joe Clark: 7:24

if you're a young individual and you're married, the majority of what you have is going to be held jointly between you and your spouse. If you're single and you die, your family, if you have any assets, will wind up in probate. But what I find is most people that are under 30, majority of their assets, if they have any, are life insurances. 4 0 1 Ks and IRAs.

Skyler: 7:48

Mm-hmm.

Joe Clark: 7:49

Right, or if they have a house, they're usually married in its own jointly.

Skyler: 7:53

Yep.

Joe Clark: 7:53

so if you fall into that normal category, remember if you have a beneficiary designation, it's not going through your will. Thus, it's not going through probate.

Skyler: 8:03

And then one of the things people say, you have to have a will. You need to make sure to have a will. It's terrible to die without a will, and it kind of sounds like it's not a super great process to die with a will. Like there's better ways to go about it, but why is it so bad if you don't have one?

Joe Clark: 8:16

so I will tell you I have a will. It's called a poor, not POOR. It's A-P-O-U-R will, and it essentially says if anything happens where something didn't get to my trust,

Skyler: 8:31

Mm-hmm.

Joe Clark: 8:31

put it in my trust. I want my trust to dictate where my assets go, but I'm 58. I've done this for a long time. I've built a company, so my assets are a little more complex than probably the majority of your listeners.

Skyler: 8:48

Mm. Mm-hmm.

Joe Clark: 8:48

you're okay as long as things are owned jointly or you have a beneficiary designation and still having a basic will that says, anything I missed, please make sure mom and dad get it, or my wife gets it, or the Humane Society gets it, depending on what your wishes are.

Skyler: 9:05

Yeah, it sounds like you're just trying to simplify it down so that there's as little as possible that that will has to control. And if there is stuff that the will needs to control, it has a very direct path to the item that you want to control, like a trust or things like that. And you mentioned beneficiary designations, and I think these are a huge deal. My wife and I. We were actually talking a couple months ago, we were like, maybe we should, we need to get a will in place, right? you hear ads for it all the time. Pay for a will service. Like there's these, easy online ones. And we were thinking about it. We're like, well, hang on. We don't have a bunch of complex assets. most of the listeners, including me, have a very simple, net worth, It's very simple. And we were like, hang on. Could we get away with just having. Beneficiary designations on all of our accounts because mainly it's just cash in different accounts or investments but it's just different bank accounts, like a 401k or an IRA. Is designating beneficiaries on those enough, or is there maybe still another step that you need to take to make sure you're really covered or is just saying payable on death? Is that good?

Joe Clark: 9:59

Es, especially at your age, Skylar. the beneficiary designations work fine. And remember, when you get into, you use the word simple and complex. A lot of times people put estate planning in an asset size. If you've

Skyler: 10:14

Mm-hmm.

Joe Clark: 10:15

million dollars, you need to do this. It really is understanding the complexity of the asset you own.

Skyler: 10:21

Mm-hmm.

Joe Clark: 10:22

a billion dollar life insurance policy and you only had one beneficiary and you weren't trying to control the distributions, you don't even need a trust. You don't even really need a

Skyler: 10:32

Yeah.

Joe Clark: 10:33

because that asset won't get there. You could have a hundred thousand dollars in different farm brown plots, the starting of your business, which requires some more complex thought process.

Skyler: 10:43

If it's just you have this really large bank account. And you have four people that you wanna split it up evenly. You make that beneficiary designation 25%, and that's probably all you need to do. It can be pretty simple.

Joe Clark: 10:55

pay attention to what Skylar just said, ladies and gentlemen, because it's critical. people tend to go to the bank and try to add a name, That's not what you wanna

Skyler: 11:04

Yeah.

Joe Clark: 11:05

You're not trying to add a name. trying to add what's called a TOD or a POD, depending on the state and the bank for transfer on death or payable on death. Those are essentially beneficiary designations That gives you no ownership.

Skyler: 11:21

Mm-hmm.

Joe Clark: 11:22

to the bank, if grandpa dies, here's who gets the money. It keeps it out of probate. Doesn't make a gift to you

Skyler: 11:30

Yep.

Joe Clark: 11:31

It's

Skyler: 11:31

Mm-hmm.

Joe Clark: 11:31

inheriting and that is very critical. We see commonly. People have four kids. they go to a bank and they add one of the kids on the account so that it's now joint owned. Well, first of all, from the IRS perspective, that's a gift.

Skyler: 11:46

Yep.

Joe Clark: 11:46

And second, the presumption is that when Grandpapa dies, that one sibling is gonna divide it up with the other three. Well, even if they are willing to do that, many times it creates a tax problem. So don't go that

Skyler: 11:59

Yep. Yeah. Yeah. More gifts, more transfers in instead of the proper just here it is on death legally via beneficiary designation. It can really get complicated if you just start adding people to everything. Especially if you had multiple kids, like you had one to the house, you had one two year bank account. Like that just creates such a mess that. It is so much easier. Just make sure you're using beneficiary designations, but I wanna talk about some key things that people need to know with estate planning, because a lot of people say you need to name guardians if you have kids, and that's a key piece of estate planning or using a will. What are some other key things that people need to know that they can get in place quickly?

Joe Clark: 12:36

We will start with the kids. you can control where the money goes. You can't control where the children go. And

Skyler: 12:41

Mm-hmm.

Joe Clark: 12:42

you need to understand that, Barb and I had a document that said if something happened to the two of us that my brother got my daughters

Skyler: 12:51

Mm-hmm.

Joe Clark: 12:52

mean that one of the four grandparents wouldn't have shown up and said, I want the kids,

Skyler: 12:56

Mm-hmm.

Joe Clark: 12:56

Only the judge will be able to declare guardianship, but they generally will rely on that form.

Skyler: 13:03

Mm-hmm.

Joe Clark: 13:03

control is who's in charge of the money. You're gonna want a healthcare directive,

Skyler: 13:08

Hmm.

Joe Clark: 13:09

of what age you are. a living will, to say, Hey, here's how I want to be treated if I happen to be on life support. If I'm in an accident. Most of your listeners, at your age, you're more likely to die of an accident than you are of a heart attack

Skyler: 13:21

Mm-hmm.

Joe Clark: 13:22

like that. So make sure it says, Hey, I don't want life support any longer than I need it. Make sure you've named the person who has that power, especially if you're single,

Skyler: 13:32

Mm-hmm.

Joe Clark: 13:32

the authority to make that direction. and it needs to be on a thumb drive that maybe you keep in your car or somewhere on your phone where you can

Skyler: 13:41

Mm-hmm.

Joe Clark: 13:41

to people. You'd be amazed the number of times people show up at the hospital, I've got a document, but it's back at home, or it's in the safety deposit

Skyler: 13:49

Mm-hmm.

Joe Clark: 13:49

You want to have it accessible to some degree. Power of attorney is critical. very similar to a will. A lot of people think power of attorney documents are more powerful than they really are. Skylar can give me a power of attorney document, which extends his authority to me to sign my name, it doesn't replace his authority to sign his name.

Skyler: 14:12

Hmm.

Joe Clark: 14:12

And one of the challenges I see with older people is they presume a power of attorney takes away Skylar's power. if he's incapacitated. having dementia issues or cognitive impairment he can no longer sign his name, and the bank knows that is not at all what happens. Skyler

Skyler: 14:30

Hmm.

Joe Clark: 14:30

sign his name. It's just I also have the authority to act on his behalf. But those are the documents that you really need on top of the will.

Skyler: 14:38

Mm-hmm. Yeah, and I'm hearing, backup plans as a way for that. Like if there is a situation where, like you said, I still have the right, but maybe I don't have the capacity to exercise that Right. Then the power of attorney can, potentially come in and help out with that. I've heard this, horror story honestly, but the bank safety deposit box held all the documents that they needed to. it was just created this messy circle that they couldn't get into it because the person died, but they needed the documents out of it because the person died. So that's something to be aware of that could really throw off and cause major delays in the process. But you've mentioned quite a few things that young listeners maybe don't need this whole entire massive trust because things are simple. you've mentioned quite a few things like power of attorney, we've knocked out some of those. What is at stake if people don't set these things up? let's say they forget about the beneficiary part. What if you don't have beneficiaries on your accounts?

Joe Clark: 15:27

There should be nobody allowed to walk planet Earth that is in the financial services industry that doesn't name a beneficiary. you always want to begin with the end in mind.

Skyler: 15:37

Mm-hmm.

Joe Clark: 15:38

So, yes, you will die. That will happen. But more likely than dying is you will live. you always wanna look at life like a Cheesecake Factory menu. There's 218 options on that menu, right?

Skyler: 15:55

Mm-hmm.

Joe Clark: 15:55

beautiful, beautiful gig, and you walk in and see this menu, and if you know anything about food, you're just overwhelmed. it is phenomenal and everything is good

Skyler: 16:05

Mm-hmm.

Joe Clark: 16:05

the waiter walks over and you have to make a decision, right?

Skyler: 16:09

Yeah.

Joe Clark: 16:10

lot of times people don't understand why rich people are frustrated. I will tell you, it's because their menu is so thick, they have

Skyler: 16:17

Mm-hmm.

Joe Clark: 16:18

and they've gotta limit, eliminate those down even more so than most people to be able to get to the choices that have to be made.'cause at the end of the day, you have to make a decision.

Skyler: 16:28

Mm-hmm.

Joe Clark: 16:28

wanna begin with the end of mind. You wanna understand why you're going through that accumulation phase. What you're doing is making your menu of choices in the future bigger.

Skyler: 16:37

Mm-hmm.

Joe Clark: 16:37

the hardest work by saying no to things you could have today. Barb and I went to Gatlinburg, not Disney, We live in Indiana. we said no to bigger cars. We said no to nicer houses so that we would have more in the future. Those are tough decisions. What

Skyler: 16:53

Mm-hmm.

Joe Clark: 16:53

money is a little bit easier, but you're gonna go through these phases and as you do, things need to change. When you're younger, make sure that assets are jointly owned. sure everything has a beneficiary designation. if I had to choose and you don't,'cause most attorneys will do these as a bundle, but if I had to choose at 30 years old between having a will and having my healthcare representative. Am I living

Skyler: 17:19

Hmm.

Joe Clark: 17:19

then I would take the, the, I would take the two ladder.

Skyler: 17:22

Hmm.

Joe Clark: 17:22

you appoint who you want to be in charge of saying pull the plug or don't pull the plug, depending on your state,

Skyler: 17:29

Yeah.

Joe Clark: 17:30

how you want to be treated. If you're capable of thinking for yourself.

Skyler: 17:34

Yeah, that's really interesting. And I think so many people, can miss the mark because the overall picture of a will and a trust gets talked about a lot more. But there's a lot more pieces you can do, like you said, when you're living, if you're in your twenties. You're more likely to be in a car accident because you're driving more than a retiree So there's a lot of things you can do now that are smaller and simpler, but just aren't talked about as much. So thank you for bringing those up.

Joe Clark: 17:58

welcome. I've been, I've been in this industry for 37 years, longer than most of you have been alive, when I say you're going to die, but you're more likely to live,

Skyler: 18:09

Mm-hmm.

Joe Clark: 18:09

people, I mean, obviously we all die, but more of us will have cognitive, decline or cognitive impairment. That's the one with the diagnosis as we age, simply because we're living longer. And you

Skyler: 18:22

Mm-hmm.

Joe Clark: 18:22

make sure that your tools or documents evolve as you evolve. As that cheesecake factory menu gets bigger as your choices that you can make in gets larger. You wanna make sure you're in a situation to have your documents match those decisions.

Skyler: 18:39

Yeah, and making sure that the people Who are a part of this plan, know about it. That's something that just came to my mind You mentioned the power of attorney or the person who can make the decision to pull the plug, I'm glad we were able to go through so many terms today because I know I'm in the finance space, I know there's a lot of people listening that, like you said, at least you're in a place where you're listening to a money podcast, you're so much ahead. Of everybody else around you because they just frankly don't care about this sort of stuff. But just listening to this gets those gears turning in your head, and hopefully you'll potentially be like me and my wife, where you're like, Hey, let's sit down and talk about it. it doesn't need to be as complicated as the whole entire process. Let's make sure and go through all our accounts and make sure beneficiaries are designated. And that could be enough, but just listening to this at least get your gears turning and get you moving in the right direction. So this has been a fantastic conversation. That's really helped. One, open my eyes to it doesn't have to all just be a will. Like there's a lot of different things to consider, but also there's things that are more important, like healthcare directives and power of attorneys that can be set up while you're living. Joe, this has been fantastic. It's been really educational for me, so I'm sure everyone listening. Is also taking a bunch away. I got two final questions for you here. The first one will be, how can people learn more or contact you? But then the last one, to give you a second to think about it, is what's one thing you wish you knew about estate planning in your twenties?

Joe Clark: 19:54

Well, thank you Kellar and I've enjoyed being here take what I said seriously. I commend

Skyler: 19:58

Mm-hmm.

Joe Clark: 19:59

taking the time to learn this.

Skyler: 20:01

Mm-hmm.

Joe Clark: 20:02

some of you are taking care of yourselves. Some of you probably have a loved one, like a grandparent that you care about. so it, it really, it really does matter. can always find out more about us at your life after work.com. Um, the, and, and, and I will probably send you right back to Skyler. if you listen to his program, support is program to the best of your ability.

Skyler: 20:27

Well, thank you.

Joe Clark: 20:28

that I wish I knew, I'm a little bit different, Skylar in most people, I started when I was 21 years old.

Skyler: 20:35

So you knew this in your twenties.

Joe Clark: 20:36

I, I love to learn and, it didn't take me long to recognize. with granny's estate, little people understood about

Skyler: 20:47

Mm-hmm.

Joe Clark: 20:48

about making sure that the way your asset was owned matched the way that you wanted your asset to go at the end. that was very helpful to me. You said another key thing. You know, I will tell you with the estate the size that I have today, it's a whole lot easier to think about legacy and estate planning.

Skyler: 21:05

Mm-hmm.

Joe Clark: 21:05

and sold houses, as I built businesses, understanding what an S Corp and a C Corp and

Skyler: 21:11

Mm-hmm.

Joe Clark: 21:11

it becomes simpler when it applies in your own life. so do baby steps if you have to. You don't have to get this all at one time. But my two favorite teachers of habits, BJ Fogs, wrote a book called Tiny Habits. He was also a professor to a guy named James Clear that wrote Atomic Habits

Skyler: 21:31

Hmm.

Joe Clark: 21:31

never forget James Clear's greatest quotation success is never dependent upon one thing, but failure

Skyler: 21:38

Hmm.

Joe Clark: 21:39

be right. It's no good to save and accumulate money to have a beautiful relationship with your spouse. and you're saving and accumulating money to screw it up with a bad beneficiary designation

Skyler: 21:51

Yeah.

Joe Clark: 21:52

or to not have something else planned and at all to be for, not, makes no sense to me. Always begin with the end in mind. There are a lot of things that can mess it up. Just keep doing the right things. Baby steps,

Skyler: 22:04

Mm-hmm. Yeah.

Joe Clark: 22:05

got. So.

Skyler: 22:06

Yes. I love that and I love don't, don't put in some magic provision about your C corp that you plan to grow in 20 years, because frankly, you don't need that in all of your estate planning. Keep it simple and do the next right thing and you're gonna be good. I love that because you mentioned the one bad thing can screw it up. It can leave such a stain if you have a former spouse as your beneficiary on something and no one gets any of the money. And the former spouse keeps it like how? that messes it all up. So go one step at a time and make sure you're making the next right step. But Joe, this has been a fantastic conversation about a topic that not a lot of people think about. thank you so much for coming on.

Joe Clark: 22:41

You are very welcome. Good to be here. Have a great day.

Speaker: 22:53

Thank you so much to Joe Clark for coming on the episode today. I know that was a great one and I hope you all enjoyed it as well. But let's start with the money talking points here. The first one, how can you get started with estate planning? Well, you can start simple. Take easy little baby steps. You don't have to fret so much about trying to do it all at once. This is something that would scare my wife and I away from doing some estate planning. You just need to figure out what the next step is and do that one simple thing. It's likely going to be that your first step is beneficiary designations. And to be honest, like me and my wife, you might not need to go past that. That might be all that you need to do right now in terms of estate planning, you might not need to set up a whole trust or that entire kit and caboodle and everything that includes. You may just be able to start with that one document where you write down all the beneficiaries, and then of course, make sure you actually log into your accounts and update the beneficiaries, because just writing'em down on a piece of paper. Won't be good enough to actually update them online, but this is what my wife and I did. Here's the story about exactly what we did. I started out by writing out a Google Doc with all the different accounts that we have, all the different organizations that they're with, the different institutions, the name of the account, what type of account it was, and then the phone number for that company. And then I wrote Primary Beneficiary, secondary Beneficiary. And then under each one I went one by one and logged into that account, found the beneficiary designation online, and wrote it on that document. Now, this was very easy. I was able to do it all at once, but I didn't even have to. This is something you could do over a couple weeks. You don't really have to do this all at once. And guess what? I discovered an account that was set up that did not have a beneficiary designated huge face palm type of moment. I'm on this podcast trying to tell you all how to do better with your money. And even I make little mistakes like this, like not designating a beneficiary, but that's why it's so key to check these sort of things and make sure to. Know that it is set up. I was shocked that I forgot this. How could I forget this? But thankfully, I went through combed through all our beneficiaries. Fix that one. And I did it one step at a time, one account at a time. And then my wife and I, we realized our net worth isn't much more complicated than that. So we don't need to do anything more than that. And you may not need to either. You might just have a 401k somewhere or an IRA somewhere. And maybe a savings account here or there, and you just need to go through all of those and check who's the payable on death or transferable on death or the beneficiary that's designated on that account. And that might be all that you need to do. So people will often, in the estate planning world, use a blanket statement that a will is the main thing that you need to get. They'll just preach and advertise that you need to sign up for their will service or create a will online. But frankly, a will may not be something you need. And that's because there's other documents that are more important and there's other things that you can do to avoid even needing a will, like beneficiary designations. But there are other documents that are much more important, and let's talk about that in the next money talking point. The next money talking point is what are some of the documents and terms that you need to be aware of with estate planning? Well, we did identify a lot of these right in the very beginning of the episode. And the will is something that we will all hear about. Everyone says you need to get a will, right? But I like to say that a will will go through probate, and that's something we wanna avoid. We need to think about beneficiaries payable on death, transferable on death, like I just talked about in the last money talking point. That might be all you need. It's the first document that you wanna make sure you have set up on every single account. This is more important than a will because you can avoid probate with a little TLC, which stands for trusts. Laws and contracts. A beneficiary designation is a legal way to make sure that your money passes onto someone else. Without the court having to intervene or anything like that, the beneficiary designation will send the money to the correct person. Now, what is a trust? A trust is another term you can hear when it comes to estate planning, and this is a whole entire account structure and a document that can be set up to manage your assets. I'm not gonna cover these in a lot of detail right now because I think it's a little beyond the scope of what I want to talk about with simple estates and some simple estate planning. But a trust is pretty much an entire account structure where you can write a document to determine how the money is to be distributed, and that's the rules they have to follow. It's a pretty neat tool, but we're not gonna talk about it in much more detail today. A guardian. Well, if you have children, this is the number one most important planning opportunity that lies before you. If you're listening to this and you have a children from age zero to however old they are until they need to take care of themselves. If there's at any point where you have guardianship over somebody. You need to make sure there's paperwork in place that if you were to die, someone else is designated the guardian. And stop whatever you're doing in your financial life, whatever project you're working on, and make this your very next step. You absolutely need to set up this document so that it can establish your wishes for where your children go when you die. Now, power of attorney, this is another thing that you'll hear thrown around when it comes to estate planning. And like Joe mentioned in the episode, you don't lose your rights. You're not signing away your rights or your ability to exercise your rights. You're just giving somebody else the right. Should you be unable to exercise your rights on your own? Set this up now while you're in a good condition. And that way, if you need to have things taken care of, this is already in place. Someone else can have the legal rights to take care of it. Should you be disabled. There's four different types of powers of attorney. There's a general one, a limited one, a durable one, and a springing. Each one has its own use case, and you should have one set up so that someone can continue to work out your financial or legal manners should you be become incapacitated. That's what a power of attorney is for. Now, another term you'll hear thrown around is a medical directive, and you don't wanna leave it up to someone at random to decide your medical outcome. Decide it for yourself now while you're in a good state of mind to be able to do so. Do you want someone to pull the plug? As people always jokingly say, they're like, if I'm not in good condition, just pull the plug. Are you serious about that? Because you should write it down and then people know your directive medically, and people don't have to guess or keep you going longer than maybe you want to. And this goes with all other decisions. Make them before you have to make the decision. Make it when you have the opportunity to make the decision. When you're in a good state of mind with all of these things here, whether it's setting up beneficiaries. Writing a will, creating a trust, designating guardians, designating a power of attorney, and writing your medical directives. Do them all. While you're in a good mindset, and I know I say take the next baby step, so let's talk about what some of those baby steps could be. Well, if you're a parent, your first step needs to be guardianship, and then for everybody else, and after that's done, you need to make sure beneficiary designations are set up on your account. And then consider power of attorneys and then consider medical directives. And I think you could put those last two in potentially either order. But those are kind of the steps. You should go in one step at a time to make sure that you have everything in place while you're in a good state of mind right now. And now those last three of a guardian power of attorney and medical directive are more important than a will 100%. And a beneficiary designation is also just as much, if not way more important than a will because it's a way to avoid it. It's a way to make it simpler and easier. I wish a beneficiary designation was a legal requirement that financial institutions had to make sure we're on every single account. But now that you've learned all about estate planning in this episode and you're thinking, wow, I hope my family has this stuff set up because I don't need to worry about it now, newsflash, you do need to worry about it now. That's why you're listening to this episode. So make sure your estate planning's in order. But then how can you bring it up to older members of your family to make sure their affairs are in order? That's the third money talking point. How can you bring up estate planning to older members of your family? Well, don't be rude about it. Don't be aggressive and don't try to fix their estate plan. Don't come into it saying, oh, I think your estate plan's wrong. Let's do something different. Your grandparents or parents may let you go ahead and read their will. I've done this with my grandma before because when I was learning about. Wills and estate planning. I said, Hey, how do these actually look? Can I just read yours real quick? It'll help you understand how things are going to work, and I think it could be beneficial for the entire family to have a meeting about how is the estate gonna be distributed, when and if, and how soon should a family member pass away? But we all need to be willing to have the discussion and of course. Don't come at it from a point of wanting to learn what you're going to get or trying to change what you're going to get. If you have wealth in your family, that's just gonna make people upset and make people kind of offput. Having this conversation. If your whole goal is to just come in and try to get more money, come at it with questions. Ask questions about how their estate plan was set up, who did they talk to, how did they set it up? How did the money get distributed, how does it get split up? Things like that. How do they decide about using the certain kind of trust that they might have used? Mention that you heard about Guardians on this podcast, and ask how they set those up. Same goes for the medical power of attorney or a general power of attorney. Ask who those people are. It's very likely that there was an attorney involved in creating these estate planning documents for your parents or grandparents. Know who that person is. Make sure you have their business card or the company that they work for so you know who to call when the time comes that this estate plan needs to be put into action. That is, I think, one of the most key things because this person likely has a copy of the estate plan and they can help you figure out how to get things moving in the right direction, get things submitted to the right places. But overall, just don't bring up this conversation from a place of wanting to change how much money you're gonna get or trying to get more money, or trying to make it so someone else gets less money. That's just not helpful and it's gonna ruin relationships, but you need to come at this from a point of asking questions about these different things that you learned about and say, how did you set that up? Especially when it comes to those things, maybe beyond a will that this might be your first time hearing about it. Ask your family members, Hey, how do you have this set up? How did you set that up? Who did you talk to to get something like this set up? Because there's a lot of different things that do go into a full entire estate plan, but just remember, it doesn't have to be that complicated. If you're young and you have a simple net worth and nothing's too complicated yet, just start with beneficiary designations and you're gonna be just fine and you can sleep at night. Knowing your money's gonna go where you want to, should anything happen to you and you unfortunately die. But that doesn't for the three money talking points today, what a great episode that was about something that is so often overlooked. It does not have to be complicated. I wanna leave you with this. Estate planning doesn't have to be overwhelming or something that you do all at once. For my wife and I, we started with that simple Google doc that I mentioned, listing out our accounts and checking on each beneficiaries, and that's it. One step at a time, and that may be. All that you need to do. You may not necessarily need a will or a trust right now, but beneficiary designations, powers of attorney and medical directives can be way more important to get in place early. And if you're ready to go a little bit further, start asking around about how other people have it set up or start asking some simple questions and have some fun money. Talks about this. I hope you were able to learn a lot about estate planning today, and I hope you shared this episode with a friend and go and have a money talk. If you have any questions about estate planning, please send them my way and I'd be happy to answer them for you and talk about'em on the show. If you enjoyed this episode, please leave a review wherever you listen to podcasts. And thank you for listening to today's episode. The best way to stay up to date and connected to All Things Money Talk is to subscribe to the podcast and sign up for my email list. Head over to Money talk.show and submit your name and email right there on the homepage. You can also use the contact page on my website to send me any questions. If you're looking to get started with budgeting, I've partnered with my budget coach, a platform that connects your budget directly with me, your financial coach, and I'd love to work with you over there and help you with your budgeting. Remember, the link is in the show notes. And also remember, the best way to learn from today's episode is to go and have a money talk about today's topic with a fellow money buddy. But thank you for listening to this week's episode of Money Talk. I'm your host, Skyler Fleming. Have a great week.