Apr 932 min read

Estate Planning for Physicians - The FinancialMD Show - Ep 030

Summary:

· Matt's Law School And MBA-Finance Journey [0:02:23]

· Embracing Estate Planning: The Turning Point [0:05:42]

· The Financial MD's Four-Step Roadmap [0:08:59]

· What Is Estate Planning? [0:11:01]

· Key Questions To Kickstart Your Estate Planning [0:13:35]

· Will Vs Trust: Definition of Terms [0:16:55]

· "You're In Control While You're Alive And Well" [0:21:00]

· Understanding Trusts: Common Setup And Structure Models [0:26:22]

· Common Objections Against Setting Up A Will Or Trust [0:30:46]

· Estate Planning Essentials: Quick Tips [0:34:19]

· Matt's Book Is Called "Keeping Control"; And Other Resources [0:40:09]

Welcome to the Financial MD Show. This is the only podcast designed specifically for residents and young physicians to help you become educated on financial planning for physicians and avoid many of the common financial mistakes doctors make. Your hosts, Jon and Trevor, explore a different topic with each episode. Jon Solitro is a financial planner and certified financial education instructor. He’s been working with young physicians for the better part of the decade and lectures to graduate medical programs around the country. Dr. Trevor Smith is a board-certified ophthalmologist with a full-time practice and he has learned the ins and outs first-hand what it takes to make smart financial decisions as a young physician. And now here are your hosts, Jon and Trevor.

Jon Solitro: All right. Well, welcome, everybody to today's episode. We're super excited to be focusing today on estate planning. And for me, this is probably the thing that we recommend the most as a financial planner, that gets done the least. And we're always looking for good attorneys to collaborate with, because at the end of the day, whatever we do, it's a legal document. Even if that legal document is just an IRA contract with beneficiaries or life insurance, all the way up to trusts and some complex estate planning, there is legal work that goes into it and things to know that can change by state. But I'd say, 85, 90% of things we talk about for sure are going to pretty much be comparable to any state with a few nuances here and there. So, as always, we'll preface this, this is not personal financial advice, this is not legal advice; this is for informational educational purposes only. But I'm thrilled to have a longtime friend, great colleague, and guest with us today, Matt Ferri from Ferri Law, our local estate planning expert. Welcome, Matt.

Matt Ferri: Thank you so much, Jon. I'm happy to be here; happy to be on the show and be able to provide any information that people like to hear about.

Jon: Yeah, awesome. I'm psyched too. We're going to chat and we'll keep it pretty light here and I've got a few questions and then we'll take it wherever we see the conversation going. I think you and I have both worked with young physicians enough to have some idea of the pretty common things they want to talk about, the frequently asked questions, and the pitfalls that we see here and there, but I'm excited to dive into this. My hope is that our listeners today are going to be able to pick a few things that they're going to take action on, get some questions answered, maybe clear up some confusion, but let's begin with just introducing yourself, Matt. Tell us your story. What got you into this, what you love about this, what you hate about it – any of that stuff.

Matt's Law School And MBA-Finance Journey [0:02:23]

Matt: Well, that's fantastic. So yeah, again, thank you, Jon. So I have been an attorney since 2008, beginning of 2008, and worked for a small firm. Back when I got my law degree, I also got an MBA, and so my background, even in undergrad was in finance. So I've always liked the business, personal finance side of the law since the beginning. It was one of those cool things to learn about and grow. And there's a lot of attorneys that like to litigate and like to do that and be in the courtroom and stand up in front of judges and juries. And that's something that I quickly learned was not my style, what I like to do. I like working and collaborating with people and families, business owners, that kind of thing, where we really can just sit down in the room, share stories, talk about family, talk about friends, talk about our pets. That's definitely things that we always enjoy. I know like you and I already chat about. And so, really we've started there. And really since 2010, I really focused my practice on estate planning and the nuances there so we really, in our firm, do not practice anything else really than estate planning, some small business planning, and elder law. So, you know, it's kind of a big thing in our world, much like in the medical world where you pick a specialty, you know. You don't go to… you go to a certain doctor for a certain thing, and the same thing is mostly true for attorneys as well. So, I've definitely developed and grown, like I said, been doing this for a long time now. Thankfully, I'm not too old yet, but old enough now to have learned a few things.

Jon: So, help us out with your education – the MBA. Where did that come into play? What was your motivation there? And that was before law school I assume?

Matt: Actually, it was concurrent. University of Detroit has a dual degree program and since I had a finance undergrad, they were able to use credits for starting out my first year of MBA school and then the Law and MBA electives crossed each other and so we didn't have to… I just had to get some extra credits. I think I had 24 extra credits. There were some long summers in there. I'm not going to lie.

Jon: Yeah… oh my gosh.

Matt: And some long semesters.

Jon: Yeah… wow. That depends.

Matt: So I went to law school during the day and went to MBA school at night. So there were some long grueling times in the… The MBA is, you know, just like I said, a traditional MBA, no specialty or focus. And that came into play was I was going through law school and, you know, just discussing what do I do, how do I do it. It's another degree that kind of blends together with what I do now as a practicing attorney, right? We deal with the small businesses, the families, the finances. That's, you know, just more of that.

Jon: Yeah, that makes a lot of sense. And so at what point was it that you really felt like estate planning was the way to go? Was it during law school? Was it your experience after your first firm?

Embracing Estate Planning: The Turning Point [0:05:42]

Matt: I think I had that thought in law school. And again, we have a Wills and Trusts class and that kind of stuff. That was actually one of my best classes as it turned out. But you know, just as luck may have it, I suppose. And I think in law school, I kind of had that idea. Again, it was the way to use sort of the financial aspect with the legal side. You know, the first jobs, obviously in the law clerking jobs, were getting experience finding a place to work. We're talking back in 2006, 2007, and then into 2008. So that's what… the world was an interesting place, right, as everybody thinks about time and places to how you enter the workforce and start doing things. That was an interesting time for us for sure. So, it's an interesting way and the law firm I worked for was a small firm and it handled a lot more of the commercial, real estate civil litigation world, and that was, you know, at the end of 2008, if people recall, started to think about there's a little bit of a meltdown there for the real estate world. So that made my world interesting.

Jon: A lot of unique experiences that probably a lot of attorneys don't have from practicing real estate law at that time.

Matt: Absolutely. So I've been down the road of construction lien litigation.

Jon: So, and then what brought you to having your own firm?

Matt: Well, you know, essentially, it was at the end of 2008 there, as firms have it. That firm shrunk. There was really no space for me at that point. He was trying to survive. So the newest, lowest person on the totem pole – out you go. And so I was able to luckily find another firm that I had known and I did some extra contract work and was able to just get started and, you know, decided now's the time, be in control of your own self and schedule and go from there.

Jon: Before you got too deep into that next one.

Matt: Yup.

Jon: Okay.

Matt: It's always an interesting story, an interesting climb. You know, you have different things, different stresses, different levels of focus.

Jon: Yeah. Okay. So how old is your firm now?

Matt: So, as I said, we are 16 years in, so we've been around now for hopefully over the hump and keep going.

Jon: Yeah, I would imagine. And so tell us about the makeup of your firm as it stands today.

Matt: Currently, I have another attorney who works in my office, so she's been working with us for over six years now and that's been obviously a huge help and benefit to all our clients. And obviously, we always talk about succession planning no matter how old you are. If something happens to me, there's a person ready that can take over and run with it.

Jon: Excellent.

Matt: We have another client coordinator as well that helps sort of manage all the other day-to-day stuff.

Jon: Yeah.

Matt: And so that's it for right now. We're eyeing a few different things that will continue to expand and grow here in the near future.

The Financial MD's Four-Step Roadmap [0:08:59]

Jon: Okay, yeah, that was great. Sounds like a nice lean operation that you got somebody strong in the client coordination side and then another attorney. It's great. So, a lot of our conversation with our physicians is around some specific areas. You know, with the residents and fellows, we start at the very beginning – and we'll put this upon the screen here – but we have this Four-Step Roadmap. And first, we talk about cash flow. Any kind of financial plan has to be based on what's coming in and what's going out and just having a good handle on that. No matter how far in training or practice a doctor is, we feel that they do need to get a handle on that. We've seen way too many attending physicians who just spend because they have it or they don't budget because they don't have to, which is true, but they're not running out of money necessarily. But we always believe that there's kind of leaving money on the table or money is, you know, slipping through the pockets or paying more in taxes than they have to or just, you know, stupid stuff. So that's Step 1. Step 2, we figure out the safety net to get their emergency fund, insurance in place; protect their financial plan. And then Step 3 is navigating their debt strategy and it's interesting because estate planning touches all of those things. And then Step 4 is planning for the future, which is usually where that estate planning comes into play. Although I'd say in our conversations, it doesn't matter where they're at in the process, estate planning touches it somehow, whether it's choosing beneficiaries on their 401(k). And their residency, that's something; just anytime they get stuff and knowing that there's… that stuff's got to go somewhere when they die and they're either going to figure it out or leave that burden to somebody else. I guess if you were to sit down with a couple for the first time, what would be the most basic things that you say to, if somebody asks you the question, why do I need to talk about estate planning or think about that?

What Is Estate Planning? [0:11:01]

Matt: It's funny you made me go right to how we define what estate planning is in general. It's really interesting. You kind of touched on all of those things that, like you said, go hand in hand. So the way we define estate planning in our offices, you know, I want to be in control while I'm alive and well, and then I want to have a plan for myself and loved ones if I become disabled. And then after I'm gone, I want to give what I have to whom I want, when I want, the way that I want.

Jon: Okay, good.

Matt: So you're really covering all phases of life in your estate planning, much like the financial plan is the gas that fuels the car into that plan. So that's, you know, really a way of looking at it.

Jon: Right.

Matt: And so certainly, yeah, in the beginning, it's while, you know, like the people are just getting and going and the doctors are just getting and going. They're trying to be in control. And like you're saying, it's just the awareness and knowledge is a huge thing – agreed as to what's coming into my pockets, where's the money going, how do I make sure there's a plan and I'm protected.

Jon: Yeah.

Matt: And then, you know, that protection comes in, what happens with the disability. And I know you've talked about that extensively and we've gone over that as a group as to there's different ways of protection and they're all needed. And that's a huge thing. And then ultimately, what happens at death. So the documents on the estate planning side might change, but the objectives are still the same. So those are just the tools of the trade on our end. But for you, it's where do you want to go and how do you want to get there. And so that's a lot of the conversation we have with clients as they come in initially. And like you said, we're big on to education. We want to know exactly what they're doing and what they want to achieve and we're their guide to get them there.

Jon: Yeah, it makes sense. To all you residents out there, or directors like, you guys know, at Financial MD, we do a lot of lectures. Matt and I've done several lectures together as we talked about either employment contracts or estate planning or just on the legal side of financial planning. So, Matt, it sounds like there are three phases of life where estate planning has to be considered – having control when you're alive and well, when you're disabled, and then not necessarily having control, but dictating some direction, making the decisions for what happens after you die with the things that you've worked for, earned, your family has gotten, so it makes sense. So, what are the questions that you ask when a person or a couple sits down with you. Let's say, okay, they get it. I know I need estate planning, where do I start?

Key Questions To Kickstart Your Estate Planning [0:13:35]

Matt: So we start traditionally, like I said, with an overview of our process, and from there, as we get clients that want to go to the next steps, a lot of that is just gathering some basic data from the clients themselves – who they are, are they married, do they have any kids. And then the discovery of – what do you own and how do you own it – because, again, the estate plan can say one thing, but the beneficiary designation at the institution says something different. It won't work the way you intended to go.

Jon: Okay.

Matt: So trying to make sure what we own and how does it impact what happens to it at different stages. If you're disabled, if you're deceased, how do you get… who's in charge of it in one, and they're all big things, so we start to talk about those issues as we design their plans. But initially, we're looking to get… to get that initial set of data.

Jon: So you said something interesting – I don't know if a lot of people will follow -- as you said, what do you have and how do you own it. What do you mean when you say how do you own it?

Matt: Well, how is the piece of property titled? So, right, there's bank accounts, for instance. That's probably the most common thing for most of us, right? We all have a checking account.

Jon: Yeah.

Matt: Yeah, if you have a checking account. Well, there's different ways of having a checking account. It's just an individual account. A lot of times they're joint accounts, so it's you and someone else. And with the joint account, you can have… it's essentially equal ownership. In that way, somebody can… I can take all the money out of it; that other person can take all the money out of it. You know, in spousal situations, that's usually okay. But if we're adding kids or relatives under the account, that might not be okay. And that comes into play in those discussions. Traditionally, if you have, you know, someone else on the account, if they have an accident, that account is exposed to that person's creditors, and so we don't often like doing that. It's a good reason to. And so the ownership of the structured joint account, or maybe that joint account, you just have a beneficiary listed, and again, it goes to that person or people upon you know. So that's when we get into ownership as to how it's titled, and titling means, right, either or the registration on your vehicle. And that's the other thing – we think about titles. Titles to vehicles, titles to houses.

Jon: Yup.

Matt: So that's why we – titling is important. Boring, but important.

Jon: Yeah. Well, it just makes you think. Like I said, I don't think anybody thinks about the fact that, hey, I owned this jointly with my dad or siblings or, you know, whatever the case might be. It's just…it's more convenient that way or whatever. But the liability is a question and good point. Okay, so then figuring out, getting all this data, the question that we get all the time and I'm sure you do as well, is – and this is probably not the right question to ask, but we get it anyway – what's the point where I need a trust versus a will? Or what is the difference? Can you give us a quick rundown of how do you explain the difference between a will and a trust and the sense of each and implications?

Will Vs Trust: Definition of Terms [0:16:55]

Matt: Yeah, so we can give the high-level view of that, and again, that's a very common question we talk about in the introduction. And so trusts, wills, powers of attorney – those are all different documents that we use in the estate planning world. And so from the standpoint, matching it up with our definition of estate planning is, we'll start with a will because that's most, you know, living will is a different thing than a last will and testament. So last will, or you know, your will is something that I create and it only becomes effective upon my death. It's something that's just there. And what it is is it's a set of instructions, a simpler set of instructions, to say what happens to my stuff that I own in my name at death. And it has to go to probate court in order to legally transfer it. That's where the will goes to probate court. The probate court then pretty much puts its stamp on it saying it's okay to move the property from the deceased person to the people listed in the will that who they want to have inherit. The side cut, or the shortcut to that is if you have a 401(k) or IRA or life insurance with the beneficiary on it, that avoids the will. It goes straight to whoever is listed. So a will doesn't work in that instance. And so again, that's why we look at beneficiaries. So a will is just very basic. Then it requires a little bit extra work to get the property where you want it to go. And it's only effective upon death versus in some situations, though, we have it just in case because we're planning with beneficiary designations. We're never planning to use the will because we already know who's going to inherit. And that's okay. We counseled to that decision. And that's very much the case with young couples because they don't own much. They don't have a lot of things. A simple will coupled with what we use as is, you know, powers of attorney to be able to manage your finances if you're disabled or manage your healthcare decisions if you're disabled. And those are important things to do for anyone that's over 18. Otherwise, you end up in front of the probate court for the living with a guardianship or conservatorship.

Jon: Yup.

Matt: And so we want to avoid that yet again because you'd rather want to starting from the control aspect of, "Hey, I want to be the one to say who's going to take care of me, not somebody else." Right? You might have a preference of, "I want this person, not that person, to make these decisions for me."

Jon: And that's a living will?

Matt: And that's… you know, a living will, but in Michigan, that's, you know, the patient advocate.

Jon: Okay.

Matt: So we can do a patient advocate where they will be the ones to make the decision on what type of treatment you would like to receive.

Jon: And so at what point does that become active or usable? When is somebody not able to make those decisions for themselves? And how do they know?

Matt: Well, there's two ways you can design the documents. One, you can make it effective really upon your disability and you can – disability can be defined as, you know, two doctors agree that you're no longer mentally competent or you can make them effective immediately where then the person that you're giving that power to can go and use them tomorrow if need be. They don't have to wait for your disability.

Jon: Okay. What are the pros and cons of either one of those?

Matt: Depends on when you want them to be effective. It depends on your level of trust or need for that.

Jon: Got you.

Matt: And so that becomes, again, another issue that we discuss with the clients as to what makes sense for the particular situation. It all… it varies.

Jon: Yeah. And is that a… am I thinking of that, right, as bringing power of attorney is the one where…

Matt: Correct.

Jon: We'll need some disabled?

Matt: Yup.

Jon: Okay.

Matt: Yeah, so that is exactly the term.

Jon: Okay.

Matt: You're training has worked well, Jon.

Jon: Thank you. I… just like a handful of things, like terms from the CFP that I remember.

"You're In Control While You're Alive And Well" [0:21:00]

Matt: That's exactly it. You've had many hours of this. It's back to remembering what it was… yeah. And then if you want, the last step is the trust. The last step is the trust that sort of encompasses all of this. So again, we create a trust today for someone, it's effective today, and it's merely a big set of instructions to say what happens to our financial assets. You're in control while you're alive and well. You can change it, you can modify it, you can do whatever you want with the plan. But then it says, what happens? It determines how you're declared disabled, who's in charge during your disability, who can get access to the money while you're disabled, and then what happens at your death with the same type of questions. So it's way more flexible and way more comprehensive for someone to be able to plan through more situations and more scenarios than you can otherwise with the will or powers of attorney.

Jon: Sure, okay. So with the… the way I kind of, I guess, look at it from our financial point, like let's take the patient advocate, power of attorney, things like that, the power of attorney to have it be immediately effective regardless of whether you're disabled or not. And correct me if I'm wrong on this, but the thinking that I typically have when we talk for our clients is, you know, if you've got somebody that, you know, you trust well, you've got a good relationship – it might be a spouse, okay, or one of your children or whatever, one of your parents or however that works out – you know pretty well that, you know, you're in a situation where you can make a decision for yourself, which is 99% of the time, they're going to let you, no issues, no getting involved. And then it just makes it a little bit easier that if you are in a situation where you can't make a decision for yourself, then I have to go to those hoops of, you know, getting declared incompetent or, you know, unconscious or whatever the case might be. Is that kind of thinking about that, right?

Matt: Absolutely. I agree with that analysis completely. It's one of those things there. If you already have a high level of trust with the people you're naming, then that's our decision point as to why wait. It makes it easier for you to work with and easier for financial institutions to not look for anything additional. So the reason why we plan in advance is to be prepared and ready, you know. We rather not have to run through additional stress, but certain circumstances dictate, right? We're naming maybe friends or other people that we're not sure of as backups because we don't have anyone else.

Jon: Yeah, and that's where it sounds like the will, you know, would be tougher than the trust in terms of you die and you've got a will; well, that's got to go through probate. They've got to kind of put their stamp of approval on it before everything can really get distributed. Is that right?

Matt: Yes. You know, the process isn't too difficult, but it's just some added layers of complexity, time, and cost.

Jon: Yes.

Matt: So, you know, you have to file some paperwork. Usually, you're hiring an attorney to help you with the paperwork because most people don't know how to fill that all in, where to file it, all the different steps. There are fees to file it that you otherwise have to pay. There's an inventory fee. So you have to list what you own, what the value is, and pay a fee to the probate court. So, you know, there's some additional things that need to be done that could be avoided. You know, most people choose to avoid them if they can.

Jon: Yeah. And it sounds like it's more of a consideration for who you leave behind. Obviously, you're not going to care. You're not going to really know what's going on.

Matt: Correct.

Jon: But it's now thinking through, okay, how do I want to make life a little bit easier for the people I leave behind. And I see that a lot. And you probably do with, once a kid goes through estate planning for their parents, it really makes them think twice about their own and think, boy, that was a nightmare; how do I prevent that from happening for my kids.

Matt: We definitely have stories, and that's the same thing with a lot of clients that come see us right there. And when they have experiences like that, they're either really good, like, oh, they did this, that worked; I want to do that too. Or this is really bad, how do I avoid that. And so a lot of emotional side to it. And yeah, certainly so, that's the other interesting thing. And then the other thought process for us that have young kids and young families, being able to plan for those and how they should inherit is a big thing too. So it's the same thing. If we have life insurance, you have assets that we don't have control of yet, but if we died and the kids get a lump sum of money, you want to be able to protect that for them and trusts are a great way to do that. We're able to build very specific, tailored plans for clients and their wishes for their kids, and you know, the kids are different. We can treat them differently within the state plan itself. And so we're able to build in protections and build in some different things that people don't realize necessarily that you can do, but there's flexibility to do it. So that's kind of another fun part to let the kids grow up and not just get a large check when they turn 18.

Jon: So what are some common ways you see people do that or what are typical setups or structures for that?

Understanding Trusts: Common Setup And Structure Models [0:26:22]

Matt: So for us, options are available where we create trusts and inside the trust we lay out the rules for those kids and so kids can be able – someone else is in charge of the money for the child until they turn a certain age and so that other person is called the successor trustee. That successor trustee or successor trustees as it maybe, maybe of two people, they are in charge and they can stay in charge up until whatever point in time you want them to not be in charge. So they can be in charge until the child's 20, 30, 40, 50, 60. You can name the age, whatever age you want to do, and somebody else can be in charge of the money for that person and it just determines in your plan what makes sense for your children and they can be, like I said, that age can be different for each child. One might be super responsible; one might not be responsible at all. And so you can shift ages when this happens. You can also shift how they get access to the money.

Jon: Yeah.

Matt: So there's protections that we can build in and we often leave it behind where if a kid needs something for – they go to the hospital and there's a hospital bill – we want their medical bills paid. They want to go to school and you want to support them going to school, you can give education, money for education. Maybe they need a car; they need a car, but they don't need a Bentley. We can, you know, get them the appropriate amount of money. You know, a place to live – that kind of stuff. It's all built into where we can adjust the plans for the children and protect them.

Jon: So you can be pretty specific and if you want to.

Matt: Absolutely. That's kind of the fun part.

Jon: Yeah, right. Be able to kind of make it tailor-made and customized and pretty open-ended that way.

Matt: Exactly.

Jon: What about somebody to take care of the kids? How is that provided for? If you've got still minor children, where does that get determined and dictated?

Matt: So we create a document that is really a nomination of guardians for the minor children. So if something happens to the parents, you can list who should be in charge of their care and custody while you're not around and so that's something that you're allowed to put together and appoint. And that's another crucial thing with young kids is who's in charge because there can often be a fight among family as to, well, I want to be in charge or I want to be in charge. And the parents of the actual kids go, I don't want either of those people in charge; these are the people I want raising my kids to the standards that I raised them at. And so one we usually create the legal form that nominates a guardian and allows to, you know, names who we would want. And we have an additional kind of – call it a worksheet – where people can then get into the details of how they are currently raising their kids and how they would like someone else to take care of them, right? Some people have all different methods and methodologies. You know, if somebody gets an A, maybe they get, you know, financial bonuses, right?

Jon: Yeah.

Matt: You had A's in your report card, we give you… you can keep on with that. You know, do you practice a particular religion? You'd like the child or children to continue with that faith; you know, all that kind of stuff – sports, vacations, other types of activities. Very much, you know, considerations to think about. Visitation with family; what things are important. So it's all in there. The worksheets are fairly comprehensive. It's not perfect, but it gives us a starting point for us busy parents.

Jon: Yeah. Yeah, definitely.

Matt: That's the battle for us while we're young and working and raising small kids. It's definitely something that we needed. The less we have to think about, the better in certain things. And you can always improve upon it, but at least something is better than nothing.

Jon: Yeah. No, I agree. What are some common objections you see? You know, maybe you make a recommendation, someone says, nah, or whatever the case. I mean, what have you seen?

Common Objections Against Setting Up A Will Or Trust [0:30:46]

Matt: It turns into… I think some people maybe not ready yet. Maybe they feel they don't have anything worth protecting, and I guess, that's usually overcome to a certain degree because if you think about it a little bit going, well, you know, I don't want to be in a jam. And so at the bare minimum, there's some essential planning that everyone can go through. It's just whether or how much extra planning they want to do.

Jon: Yeah.

Matt: Like I said in the beginning, it's the powers of attorney that are necessary for anyone over 18 to give whomever you want legal authority to act on your behalf. But the objections become, well, maybe I don't feel like I need a trust because my beneficiaries will just inherit and I don't need to go through that process. And that might be the case depending on their plan. So you get into those different objections of, "Well, I don't have much, don't need much; it's all covered." But let's just make sure.

Jon: Yeah.

Matt: You know, sometimes people don't… obviously, money is a factor and when it comes into play, they're not always free to do an estate plan. Some people don't want to pay different fees to do it. The fees range. We leave it open-ended. It's not a closed number. It's a pretty open-ended range, depending on particular scenarios. For our office, we do introductions. It doesn't cost anything anyone until we know what we're doing. You'll get a fixed fee quote at that time. So, it's straightforward. Nothing additional, nothing extra. We will tell you what it is and go from there.

Jon: Okay, got you. Makes sense. I think a lot of us have had experiences with hourly attorneys where we hesitate to reach out for calls or emails or something because we're afraid of the hourly rate.

Matt: Absolutely. Funny enough, I was on a call with another client the other day – quick story. And this was a tax attorney. We were doing some advanced tax planning and he charges hourly. He charges hourly and the client was on the call with me and we were all joking. Afterwards, he goes, "I didn't want to tell a joke because I didn't want to pay 10$ for it."

Jon: Great point.

Matt: So, you know, it's kind of funny. And I said, yep, I understand. And, you know, that's how it is. So we encourage – that's why we don't mind the phone calls. That's why we do the fixed fee, you know. If I want to talk about my dogs or something like that, no big deal. You don't get charged for it.

Jon: That is an excellent point. Yeah, and us with, you know, we've got a kind of a counseling approach or background here. Sometimes it can drag on and sometimes we're just listening, and you know, but I think it's the key part of the plan, for sure, because we find things we get to know in our world. We're making recommendations and putting together plans that are tailored very specifically to that person and the more we can get to know them, the better, and that may be from just letting them talk and not feeling that constraint of time. And that's good.

Matt: Absolutely.

Jon: I mean, not be as profitable, but that's what it is.

Matt: Yeah. Like you said, in the long run, I think a lot of what we do in working with these relationships, and so, we like the people we work with, we don't mind the conversations. It's part of how we enjoy what we do.

Matt: It's good. What are some -- any tips? If you were to say, you know, you've got five minutes to give a few things to some young physicians or couples or families; will be some kind of bullet points or quick action items?

Estate Planning Essentials: Quick Tips [0:34:19]

Matt: I think some of the basics, again, is just even generally get yourself in order to be organized. I think no matter what you do, it always helps to be organized where if something happens, somebody knows where that emergency file is and know.

Jon: That's a great point.

Matt: What are the important steps to take, you know. If I'm not here, how do you get access to my phone? How do you get access to my electronic stuff?

Jon: Yup.

Matt: And, you know, that's become way more of a thing for the younger generations. And then, you know, how do you get access to the key contacts? You know, who are the important people that know where my financial accounts are? If I have a life insurance policy. Just keeping your basic records in order so you can have it be easily handled in the case of an emergency.

Jon: Okay.

Matt: I think that's a big thing as to who knows where and what it is that they need to get in charge of. You know, those are some real basics there and it's helpful. Like you said, getting organized and getting yourself, like you said, initially, the cash flow.

Jon: Yup.

Matt: You've got your initial pieces of that your puzzle.

Jon: So like a simple net worth page. If somebody couldn't put together a one-page net worth for themselves, that may be a good place to start because that will give you an idea of what do I have, what's everything at, what accounts, what property, etcetera.

Matt: Snapshot of your assets, snapshot of your debts even, to know what's outstanding and what's there. See kind of pulling together your own little balance sheet of what's where and what's happens.

Jon: So a lot of our doctors will ask this question – are there debts that get forgiven, taken away, whatever, after somebody dies and there are debts that would still be there, that get passed on? How should they think about that?

Matt: So that's a good question, and it depends on the type of debt and how it's owned and what it's tied to.

Jon: Okay.

Matt: So, if you're owning a home and you have a mortgage, that debt is secured by your house.

Jon: Okay.

Matt: And so obviously, if something happens to the house, if the person inherits it, that has to go to the next person or get paid off. So that one is… that one's not going away.

Jon: Yup.

Matt: Student debt – that's a whole different story. I think it depends on what type of debt and where it is. And if you have debt in general, a lot of times is, do you have assets that are going to pay it off or are you insolvent essentially? And so we go through that process with probates and certain things, whether or not we should or should not pay it off. A lot of times that's case by case. If you have medical debt, it's the same thing. A lot of times if you're married and you have a, you know, a hospital situation where there's a huge bill, the surviving spouse will be obligated to repay that traditionally. Just because that's one of those things that plays into how that debt's written. But a lot of institutions, credit card debt, big thing, a lot of them will negotiate.

Jon: Okay, good point.

Matt: So it just depends on the amount and where, but we've typically run into that fact where they'll negotiate and get a number just to get it out and off. So that's a tough thing.

Jon: Do you guys typically recommend people get like life insurance for that kind of thing?

Matt: I think life insurance plays a generally good role for people. Certainly, when you're young and healthy, it's the best time to get life insurance.

Jon: Yeah.

Matt: And certainly, if you have a lot of obligations, it's probably worthwhile to protect your family.

Jon: Yeah.

Matt: You know, certainly, if you have a mortgage, it's an easy way to at least lighten the burden on your family.

Jon: Okay, so they can keep the house without really having to worry about that payment.

Matt: Yeah. And that's a big consideration. I know you counsel heavily on that as to how that works and what to think about and how much and where.

Jon: Yeah, exactly. Okay. Any good stories you can share? Any fun, weird stories or anything? Everybody likes to hear stories and listen to the podcast.

Matt: You find many. That's the problem. So it's picking your favorites. You know, you can go down the line of people owning. They have had a lot where people have owned real estate, as families often do, together or intertwined, and when people start dying and then all the probate start opening up and there's… One case I had that had 20 people on it and they're all like cousins.

Jon: And they're all owning like, you know?

Matt: They're all…. they're all heirs, so to speak. They're entitled to a sliver of the estate because they didn't do any plans.

Jon: Uh-huh.

Matt: That was a good, messy one. I think I stopped working on it and somebody else took it over and I felt like it was still ongoing.

Jon: Yeah. Either way, it cost them a lot, didn't it?

Matt: It cost a bunch of money and a bunch of time, and everybody – nobody gets along. Nobody agrees. Nobody wants anything. They go, and it turns into a mess. There's a lot of what not to do. Let's see here. What else can we pick on? You know, there's a lot of times when plans go well, right, when people – parents – leave the money behind and it's well received and it operates the way they've intended it to, where the kids keep going to do what they need to do and protect them. I don't think any other good work stories that come off my top of my head. I've written a book so that, you know, it's available. I put a bunch of horror stories in the book, but we can make it available to those that want on the podcast. We've got a PDF version, free download.

Jon: What's the book called?

Matt's Book Is Called "Keeping Control"; And Other Resources [0:40:09]

Matt: We've titled it… it's called Keeping Control, and so we did it, you know, it's a game plan to protect your estate, your family, and your money.

Jon: Oh, that's awesome.

Matt: So it's a fun thing. I think I've got some more stories in here that I probably have for different scenarios and kind of walk you through what keeps you…

Jon: Yeah, we love resources. So guys, if you're listening to this, you can email us info@financialmd.com and we'll get that to you. We'll connect you with Matt and his office. Anywhere you guys want to message us, whether it's direct message on Instagram or TikTok or anything, we'll get that to you. That's a great resource, Matt. Thanks.

Matt: Yes, no, absolutely happy to share. It was a great time to write that and go through it.

Jon: Yeah.

Matt: We did that right around COVID so that was good.

Jon: Okay. So, people that are coming out of this with questions or if you feel like you need to take action what's the best way to get a hold of you guys?

Matt: So, obviously, you'll be able to get access. We have a phone number. We have a website. We have email. So any of the above will work just fine with us and so we'll just share that with you and, obviously, the information below is probably the easiest way.

Jon: Yeah, we'll get it in the show notes, everybody, and reach out and reach out to us. Either way, we'll make sure we get you connected, and if you're listening to this episode and really feeling that gut pull to take action on something then do it. Don't wait. And I hope that we have expressed the urgency or necessity of these things. But certainly, a 45-minute show can't answer everything, so at the end of the day, if there's something that you need to take action on, then to do it. We're not going to beat around the bush with that. Well, Matt, I think that's our time for today. But man, that was super helpful and enlightening. I learned things. I know our listeners learned things and it was really valuable to have you.

Matt: Absolutely. Thank you so much, Jon. It was a great time being here.

Jon: Yeah, good. All right, well, guys, that was it for today's episode. Remember, you can find out more with all of the videos that we've got going on TikTok, Instagram, YouTube, Facebook, and everywhere else. Be sure to follow one of those things. If you want to get some education just delivered to your devices passively; if you want to kill some time between cases, between patients, and make it beneficial and learn something, then that's the route to do that. We've got about a billion little videos that can help you get a little bit smarter with the two or three minutes that you've got between patients. And then, of course, subscribe to this, if this is your first time listening to it. Share it with somebody that you think needs to hear this. And I would venture that every doctor needs to hear this. And even if they're not a doctor, whatever the heck? We talked about some really great stuff today. And lastly, if you would do us a favor and leave a review, that's what helps get this into the hands of more people so they can hold onto more of their stuff, pay less in taxes, and make sure that's what they want to have happen does happen. So, I'm Jon, this was the Financial MD Show. We'll see you guys next time. All right, that's our wrap.

Matt: Oh, thank you.

Jon: Yeah, that was fun. Good job!

Matt: Oh, it's good. No, I appreciate it. Always entertaining.

Jon: Get this off to our editor and let you know and I'll shoot you the link when it gets live, probably the next two weeks.

Matt: Sounds good, pretty quick.

Jon: All right. Well, I'm glad we connected, Matt. It was good to see you again and good catch up and don't be a stranger. We'll keep in touch.

Matt: Sounds good. Thank you, Jon.

Jon: All right, man. Have a good week.

Thanks for joining us for another Financial MD Show. Be sure to head over to financialmd.com to get more in-depth resources on financial tips for physicians and don’t forget to join the Financial MD community group on Facebook, where physicians at all stages of their career gather to share tips and get ideas on achieving true financial success. We’ll see you next time.

The Financial MD Show is for informational purposes only and is not an offer to invest. It is not financial, tax, or legal advice. Be sure to seek financial, legal, or tax professionals when making any financial decisions. Before investing, you should make sure that any investment strategy or investment meets your individual investment needs, goals, and objectives. Financial MD makes no claims or guarantees to individual investment performance. All investing involves the risk of loss as well as the potential for gain.

Resources and Links:

· Construction Lien – https://www.law.cornell.edu/wex/construction_lien

· What is Estate Planning? – https://corporatefinanceinstitute.com/resources/wealth-management/estate-planning/

· What is a Joint Account – https://swoopfunding.com/us/business-glossary/joint-account/

· Will vs. a Trust: Which one is right for you? – https://www.rbcwealthmanagement.com/en-us/insights/will-vs-a-trust-which-one-is-right-for-you

· What is a power of attorney (POA)? – https://www.legalzoom.com/articles/what-is-a-power-of-attorney

· Living Will vs Last Will and Testament – https://www.findlaw.com/forms/resources/living-will/living-will-vs-last-will-and-testament.html

· What is Probate Court? – https://www.findlaw.com/estate/probate/probate-courts-laws.html

· What is a Beneficiary of a Will? – https://www.wilsonbrowne.co.uk/news/what-is-a-beneficiary-of-a-will/

· All about beneficiary designations – https://lindsayallenlaw.com/estate-planning/beneficiary-designations/

· Guardianship & Conservatorship Basics –

https://www.eldersandcourts.org/guardianship_conservatorship/general-information/basics