Transcript:

[00:00:00] Larry Heller: Welcome to the Life Unlimited Podcast with Larry Heller. You deserve complete financial advice so you can confidently live your life your way. For life. Now, let’s get into this week’s podcast episode.

[00:00:19] Matt Halloran: Hello, and welcome to another life unlimited podcast with your host, Larry Heller. Today is part two of our two part series on the great wealth transfer.

[00:00:28] Matt Halloran: All right. So the first one, we really talked about what you need to do as the matriarch or the patriarch or the parents of the children are going to be inheriting. And today we’re going to dive in much more deeply on Actually a kid’s focused podcast. So here’s what I want all of you to do right now.

[00:00:42] Matt Halloran: Listen, if you want to have your kids understand what they need to do to prepare for the wealth transfer, you got to share this podcast with your kids, your grandkids, your nieces, your nephews, your cousins, whatever, uh, because the information that Larry’s going to be dropping today is wildly valuable to you, Larry, welcome to the show.

[00:00:58] Larry Heller: Hi, Matt. Great to see you and hear you depending upon how you are listening or watching us today.

[00:01:03] Matt Halloran: Man, I’m super excited about this because as a recipient of the great well transfer, which by the way, generation X will be over the next 15 years, uh, I’m really excited to hear what you’re going to tell me.

[00:01:13] Matt Halloran: I need to do to make sure that I am prepared for when I go ahead and inherit whatever in God’s name I’m inheriting, which is probably where we should begin. Yes. Uh, so Larry, take it away.

[00:01:24] Larry Heller: Yeah. So, I mean, there’s actually two parts of this. It’s not just the [00:01:30] transfer side, but it’s also as your parents age, what you should be doing to protect themselves and to protect them.

[00:01:39] Larry Heller: So, so yes, it’s, it’s, it’s both of that. And, you know, last Part one, we talked about it from the parents side, which is probably easier to approach your children with these conversations, not so much the other way around. Sometimes, sometimes parents and we’ve seen this, especially people from maybe the depression stage there.

[00:02:01] Larry Heller: They don’t want their kids to know what they have or what’s going on or, even worry about them. I mean, that’s just a, a national progression is that we take care of our kids and we don’t want our kids to have to worry about us. But There’s a lot of things that you want to do for both them while they’re alive and also they’ve have lived a long time, accumulated assets, and you want to be able to keep as much as you can and not have as much as go to either, scams or go to, taxes.

[00:02:39] Larry Heller: Or be withered away. So having that, the first thing is really recognizing, okay, I need to have that conversation. How do I approach the conversation where it doesn’t seem like they’re going after their inheritance or wanting to know what their inheritance is, but is real important to have these [00:03:00] conversations.

[00:03:00] Larry Heller: And to find the right time and the right way of approaching it is really step one, is really taking the time and having those conversations. And like we did in part one, there’s, there’s kind of two aspects is the financial part, but there’s also part of the non financial, which I think is, is just as important and sometimes even, even more important.

[00:03:21] Matt Halloran: All right. So. You just opened a huge can of worms there. I mean, we’re, we’re, how does one even begin this conversation? I know you’ve been through this many, many times with many clients over the years. So, so give us an example. Tell us how kids should begin talking about these two major points, financial and non financial.

[00:03:39] Larry Heller: Yes. So the first thing is really, you know, going to their parents and saying, I’d like to set up a time where we can sit and we can talk about what’s going on in your life. And unfortunately, as you get older, how you can be prepared, in case of. sickness or eventually in death. And I just want to make sure that you’re set up properly, that you’re going to be okay.

[00:04:02] Larry Heller: And to look at ways of transferring this money down to the next generation, hopefully, but I’m not looking for that. I’d. love for you to spend all your money. Sometimes we, we have conversations with the children to talk to them like that. but we want to just make sure that we have these conversations and that we’re prepared for certain issues that may come up.

[00:04:27] Larry Heller: and most of the time the parents are okay [00:04:30] with having those conversations. Like I said before, there are some times that we found that they’re just closed off. a lot of times where work used as kind of the sounding board. And a lot of times we’re the ones kind of initiating those conversations from either side, and we can have a meeting together and address all these issues together, which makes it a lot, a lot easier and a lot more efficient.

[00:04:53] Matt Halloran: Let’s talk about a success story before, before we get into the rigmarole of what they need to do. Please share a story about a time that you have been brought in, to have in that the conversation went, went as you had hoped.

[00:05:05] Larry Heller: Yeah. So, just a recent, recent story, this, this is a situation where it’s a second marriage.

[00:05:12] Larry Heller: So now it’s even a little bit more complicated. because how do you make sure that Both the children from the first marriages are properly taken care of. And how do we kind of, how do we kind of do that? So this person had three adult, daughters and wanted to make sure that they knew exactly what was going to happen and how it’s going to work.

[00:05:35] Larry Heller: And the daughters really didn’t want to hear this and didn’t really want to hear that their mom eventually was going to pass away. She was still in her seventies. But having the conversation. Where everything is, some of her wishes? And we scheduled a meeting. We scheduled a meeting in, in the office and we went through all of these issues.

[00:05:56] Larry Heller: And then we had a subsequent meeting where we [00:06:00] actually brought in an estate attorney and we addressed all these issues with these. State Attorney, and we updated their documents, and in New York, one of the things that you have to be careful with, that if it is a second marriage, that your spouse is entitled to one third of your assets.

[00:06:17] Larry Heller: If you don’t do some planning about that and some, uh, some agreements about that. So we were able to address all of those issues with both the mom and the, you know, and the And the three children. and it gets a little bit more complicated. on the flip side, we just had another one where from the parent standpoint, does he make sure that he takes care of his two sons, but he also is remarried and wants to take care of his new wife, but doesn’t want, didn’t want to have money that went from him to his new wife, go to the wife’s.

[00:06:53] Larry Heller: child because he had some issues. So having those conversations, putting it out there, make life a lot easier going forward.

[00:07:02] Matt Halloran: Yeah. Well, it definitely sounds pretty complex, man. So, so let’s, let’s actually reduce the level of complexity and let’s talk about some of the financial things that are good ways for children to bring this to their parents without actually, you know, really talking about some of those really a lot more complex issues like you were just talking about.

[00:07:24] Larry Heller: One of them is really financial that. paying the, you know, paying the bills [00:07:30] and unfortunately we just had this happen with a client, both the parent and the, the, the child are clients of ours and the mom unfortunately was hospitalized and she was a widow, and who was going to pay her bills?

[00:07:44] Larry Heller: She was still paying her bills in her late eighties. So making sure now she did have power of attorney and the child was able to go in and do that. so making sure somebody is able to pay the bill so they don’t fall behind on certain items. And really important. If you have a long term care insurance policy, That has a 30 day, grace period.

[00:08:07] Larry Heller: And after the 30 days, they can cancel that policy. So there are ways of putting a secondary, payor on that. So they would, the child could get a copy of that notice in case that payment got forgotten, but making sure that the bills. Bills are paid. and as well, we’re talking about bills. We talked a little bit about this.

[00:08:26] Larry Heller: you know, there’s scams that are going on now with older individuals. And unfortunately, we’ve heard about this sometimes a little bit too late. but approaching the parents to maybe it’s time to have somebody else pay the bills, whether it’s a third party, whether it’s one of your children, uh, there are plenty of great organizations that do just this.

[00:08:46] Larry Heller: so to prevent people getting scammed and being taken for money later in life, because unfortunately the elderly are vulnerable. So having those conversations on who are going to be paying the bills and making [00:09:00] sure that you have access to pay the bills. So that’s one thing. One thing financial. And then really, you know, knowing about their financial situation, you know, do they have enough money, to be able to pay their bills?

[00:09:12] Larry Heller: What happens? Well, again, this kind of crosses over into non financial, but what happens if they get sick? Oh, there’s enough money to, to do that. and what is the right investment strategy for at that particular time? should they have Most of their money sitting in, equities at that particular side, probably not, but maybe they have an old investment strategy.

[00:09:34] Larry Heller: Who’s managing the money? Are they doing it themselves? Do they have an outside person doing it and somebody should be reviewing it? So having those conversations, because unfortunately also as people age, the, um, some of their decision making is affected by that. So there should be somebody, somebody looking into that.

[00:09:55] Matt Halloran: Now, there’s also other aspects that are really, really important. In fact, I just had a conversation with my mother about this recently. My mother’s 81 years old, uh, is, is Medicaid. So you want to talk a little bit about that?

[00:10:06] Larry Heller: Yeah. So, so there are ways of, protecting yourself and protecting some of the assets in case that person needs to, Medicaid. so depending upon how much assets you have, and this is all legal. And some people want to do this. Some people don’t want to do this. and when there’s two spouses, it becomes a little bit a husband and wife, a little bit more important. But if you’re [00:10:30] close to being able to, qualify for Medicaid, you may want to do what’s called asset protection trusts and setting some money into these trusts have to be done five years in, in, in advance.

[00:10:43] Larry Heller: Uh, so putting these trusts together and setting that up and having those conversations, does it make sense to do this? And because you have a five year wait period. in most, in most cases that, you want to do this ahead of time. So having those conversations really difficult about that. Cause, but if you don’t, there may be there may come a time where you’re not able to qualify on a timely basis.

[00:11:09] Matt Halloran: Before we get into the non financial component of this, which I know actually is probably even more emotionally charged, is there anything that you want to go ahead and say before we jump into this?

[00:11:21] Larry Heller: So, before we get into this, for all of our podcast listeners out there, there’s a special offer. So, uh, please take a listen to this.

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[00:12:39] Matt Halloran: All right. Now we are going to dive in. So we just spent a few minutes talking about the financial ramifications or a way to begin the conversation from a financial perspective. But there is as much, if not even more that you as the recipient of this great wealth transfer have to manage, which are the non financial components.

[00:12:59] Matt Halloran: Now we did talk a little bit about, and I know that you’ve done this previously. We’ve talked about probate, right? So, so we’re not going to dive into that as much today, but what we’re really going to talk. about today are different components of non financial decisions in non financial discussions you need to have with your parents to make sure that really overall their wishes are actually followed through and seen.

[00:13:19] Matt Halloran: So Larry, take it away.

[00:13:20] Larry Heller: Yeah. So let’s talk about the first one. That’s really. Discussing where they’re going to, where they’re going to live as they age and maybe become more ill and need [00:13:30] more, more help. are they going to be able to stay in their home? uh, they’re going to go to an assisted living facility?

[00:13:36] Larry Heller: Uh, unfortunately, maybe they have to go to a nursing home. we just had this conversation with one of my earliest, maybe my, a client that’s been really, really right from the start. And she lives in Florida. Three children. None of them live in Florida. Uh, two of them out in are out in California. and she’s in her, she’s in her nineties.

[00:13:56] Larry Heller: Uh, and she’s, having some medical issues. She wants to stay in her home, in, in Florida. That’s where she wants to age. With, with help, aids. Uh, is that feasible? Is that not feasible? The children are far away Who’s going to help her? What happens if she needs more care and she can’t stay there?

[00:14:18] Larry Heller: Where would she go? So what we do, we actually got the clients okay to reach out to the children. And we set up a zoom call to have these con these have these conversations, not easy conversations, but better making having these conversations now than after they’re not able to do, do this. so the first one is really.

[00:14:42] Larry Heller: figuring, figuring out that now, some parents, some children make certain decisions that even if the parent thinks that it’s the best interest to be in their home, but maybe a assisted living facility places. I go back to my, my own mom who didn’t really want, wanted to [00:15:00] stay in her house. Uh, and she loved, but it was time.

[00:15:02] Larry Heller: She was by herself, uh, and we saw the assisted living facilities and we, we just thought my sister and I thought it was a much better place for it. Sure enough, when she was there, she really enjoyed that. There was activities, and it took a little bit, a little while to get over the fact that she wasn’t going back home, but having those discussions and having those decisions with somebody.

[00:15:26] Larry Heller: We’ll make it a lot easier when that time is up. So that’s kind of the first discussion is where you’re going to, where you’re going to let, where you’re going to laugh. The second one is proper documents being set up. I can’t tell you how many times that we have conversations with people and either they don’t have wills and power of attorneys or healthcare proxies, or they’re so old that there have.

[00:15:52] Larry Heller: deceased people listed in their people. They don’t talk to in in there. And you need these documents. You need to have this document in case somebody from a healthcare proxy side, who’s going to make medical decisions for this person, who’s going to pay the bills that we talking about. Uh, and then, Assets are getting transferred are the acid set up properly of the wills or possibly local revocable trust set up properly or the assets titled properly.

[00:16:22] Larry Heller: All these things are going to make it life a lot easier when the time comes when the transfer is going to be in place and [00:16:30] even before that, what just maintaining the health care along those. One of the things that we do and again. came out from my own situation when my mom had took my mom to the hospital.

[00:16:42] Larry Heller: She wasn’t able to communicate. And they asked us where her, what our primary doctor was. And I didn’t, I didn’t have any idea at that particular time. Now we actually have a document where we list all your key contacts. So we put it on our portal. So not just your insurance agent and your accountant. But who your primary doctors are, today’s a little bit with technology.

[00:17:03] Larry Heller: Maybe all the hospitals talk to each other, but maybe not. So having all these documents set up so important. And then having your child or the executor know where the documents are. Because you may put ’em in a drawer, you may have ’em in a, file somewhere, and they have no idea. And now at a time of need, they’re trying to figure out, oh, where would she have kept that?

[00:17:27] Larry Heller: Where would he have kept that? So knowing where all these key documents are, and a lot of instances, maybe even having a copy of a lot of these key documents.

[00:17:36] Matt Halloran: Well, you talked about the portal, right? Which is vitally important, right? And one of the great services that you offer, but you had also said when, you know, you got an approval or actually got, an ability to talk to your client, the, the 90 year old in Florida as kids, and that’s another aspect of those paper documents that are important.

[00:17:54] Matt Halloran: But you also just personalize this very well with, you know, what, what was going on with your mom, because at some point [00:18:00] there are things that happen in that. progression towards the end that has to do with, with what care you want and what care you don’t. Would you mind talking a little bit about that?

[00:18:10] Larry Heller: Well, yeah. I mean, there’s, different scenarios. I mean, I saw my mom go from being a strong, very independent. Women who needed, eventually needed some care at home, they needed a lot of care at home, to an assisted living facility where she needed care, and then unfortunately to, to a nursing home.

[00:18:26] Larry Heller: So the progression does happen and having the proper documents and having the proper, plan in place to be able to do that and to be able to make those decisions. Uh, and maybe even having some of those decisions, um, ahead of time with your, with your parents. So, those are real important in kind of doing that.

[00:18:48] Larry Heller: So you can have this done well beforehand. So when there is an illness, there is a strategy in place and as much as you can being able to abide by their wishes. you know, and part of that strategy is what we talked about, the asset protection trusts or having long, or do they have long term care, care insurance, and making sure that that, that long term care insurance policy is accessible, who’s going to apply to the insurance and handle all of that.

[00:19:17] Larry Heller: So having all those conversations way ahead of time, just alleviate some of those Issues when your parent is going through that, and then eventually when they passed away, how these assets can be properly, [00:19:30] transferred in the wishes. And we didn’t really talk about this on the financial side, just knowing that Your parents have set up the financial side that how much they wanted to go to their children.

[00:19:40] Larry Heller: And maybe they wanted some money to go directly to their grandchildren. Maybe they wanted money to go to their charity. And that’s obviously they would have found out about this because it’s all going to be in their will. But knowing that upfront also can alleviate that. Well,

[00:19:57] Matt Halloran: I personally was, was rather, I, I mean, I think my, my jaw hit the ground when my mother, uh, set my brother and I down and actually had a lot of these conversations. She initiated it, which I thought was interesting, but she was in healthcare. Uh, and so that, that isn’t too surprising. but before we really get to the ultimate.

[00:20:13] Matt Halloran: thing that we have to talk about here. I just kind of wanted to do a very, very quick recap for, for the children who are listening to this, listen, you have to talk about the financial and the non financial components. And when you’re talking about financial, one of the greatest ways to really kind of dip your toe in the water is to talk about who’s going to pay the bills.

[00:20:31] Matt Halloran: That is a great door opener that Larry gave you right at the beginning. Then the other thing, and when it comes to non financial stuff, before you get to illness and death, right, which are really intense conversations, make sure that you’re going to have those life discussions, where are they going to live and what is their progress of care look like?

[00:20:48] Matt Halloran: What are mom and dad comfortable with now, Larry, we do have to talk about death because it’s something that happens to all of us. why don’t you go ahead and take it away on how to. Talk about this as one of the most important [00:21:00] non financial decisions.

[00:21:01] Larry Heller: Yeah. And we’ve actually added this part into our conversation.

[00:21:05] Larry Heller: So, so the way we’re set up, we have, meetings, financial planning meetings, investment meetings. And then every few years we have an estate planning meeting where we talk about, the great wealth transfer and making sure all these documents are up to date and going through it with them. Cause a lot of times they do it, they get it with an attorney.

[00:21:22] Larry Heller: And before you know it, Couple of years go by and they forget about it. So we have these conversations proactively. And this year we added this to our conversation is what are your final arrangements? do you know if you want to be cremated, buried, if you’re going to be buried at what? cemetery, do you know where the plots are?

[00:21:44] Larry Heller: and that leads me to one, one story. One of our clients, passed away. Uh, he had passed away. father had passed away. And then 25 years later. The mother passed away. The son was a client of ours and literally two days before or a day before the funeral, the, aid found a piece of paper that his dad, 25 years ago had prepaid for their funeral and never told anybody.

[00:22:12] Larry Heller: So this aid had not. found this piece of paper, the son would have paid for a funeral a second time. So again, that was maybe a different generation, but having these conversations you mentioned, Matt, we have this portal, which we get authorization to open up this portal [00:22:30] upon death to the next, to the executors.

[00:22:32] Larry Heller: All this is right there, but it. If you’ve had these conversations with your children and they know, again, it’s one less thing that they’ve got to figure out what to do. Oh, wait, what did my mom want or want? Where, where is that document? Which cemetery? What was it? Uh, so having those conversations. Yeah.

[00:22:52] Larry Heller: Not the most. Pleasant but that’s life and that’s what’s going to happen it makes life so much easier that at that particular point you can have the funeral and with a lot less stress knowing that their wishes of being kept.

[00:23:07] Matt Halloran: This level of organization is vitally, vitally important and will make this entire process, uh, with your family just, I’m not going to say easier, uh, because it’s not easy, uh, but at least it’s going to be more organized and you’re going to have less things to worry about.

[00:23:24] Matt Halloran: All right, Larry, if there’s a couple of big takeaways that you want everybody who’s listening to this to take away right now, what would those be?

[00:23:29] Larry Heller: Yeah, the two, the two ones. I mean, that kind of, basically what we just talked about, but having a plan while they have sound mind. So having these discussions, having a plan, putting into place, executing, and then making sure that everyone knows where all these key documents are so they can be got to very quickly.

[00:23:48] Larry Heller: So those are the two biggest, the, the, the three biggest takeaways is, having a plan, having a conversation, knowing where all the documents are.

[00:23:57] Matt Halloran: Well, Larry, I want to thank you very much for, for your brain and [00:24:00] for all of this. Listen, this, this two part, uh, great wealth transfer mini series that we just did, is so important for the entire family to really sit down and listen to this one specifically, so vital for kids, right?

[00:24:14] Matt Halloran: the recipients of this great wealth transfer. These are things, listen, you’re going to have to deal with this. You might not want to think about it, but the sooner you think about it and the sooner you plan, the better off you’re going to be. Larry, if anybody wants to know more about how they can get in touch with you so you can help them through this process, what’s the best way for them?

[00:24:32] Larry Heller: Yeah, absolutely. You can reach out to us at, uh, heller, wealth management. com. Um, or give us a call at 6 3 1 2 4 8 3600.

[00:24:41] Matt Halloran: you can go to a hellerwealthmanagement. com and you can also take a quick quiz. Uh, it’s called the financial resilience quiz. So please, uh, there’s all sorts of wonderful resources on the Heller wealth management.