5 Tips Every Mom Needs to Know About Estate Planning With Pamela Maass
Welcome to this episode of The Determined Mom Show. I have an exceptional guest, Pamela Maass, and she will be talking to us about, Five tips every mom needs to know about estate planning.
I know that your business is called Law Mother. What does that entail?
Law Mother is a law firm that helps parents and business owners plan for their future, protect their loved ones and their assets, and ensure that everything is, all their ducks are in a row.
Before that, my background was in engineering, so I worked as an engineer before I went to law school, and I am the first lawyer in my family. And when I announced I was going to law school. My family was not super excited. I share that because many people have experienced, like my family, bad experiences with lawyers or didn’t trust lawyers.
I take that to heart with everyone I work with because I want to make legal tools accessible. I want to make it comfortable to work with a lawyer. So that’s something about how it, you know, influences how I show up. And then, you know, I started my career as a deputy district attorney, so I was. The courtroom every day.
The big mistake I see is that people only name long-term guardians and don’t name short-term guardians. So to break that down, long-term guardians are who would care for your kids if you could not short-term. Guardians are in an emergency.
If something were to happen and your long-term guardians lived out of state or weren’t available, short-term guardians are those who live nearby that could.
Those neighbors who could take temporary care of your kiddos so that they wouldn’t end up in child protective services or foster care until your long-term guardians could come.
The importance of naming both is that if you don’t have a plan and don’t call them, something will happen to you and your partner. While your children are minors, then essentially a stranger, a judge will decide who would raise your kids, your family members from both sides.
That judge might not pick the person that you would want. You know, we all know that there’s. Things that are only sometimes on paper need to be decided. So really, it’s about taking that control and making sure that your kids, God forbid if something were to happen, will be cared for by the people you want and how you want.
If you don’t put something in writing legally, then what would happen in the situation is that the court would get involved, and the kids could end up in foster care or child protective services until your family gets involved.
The short-term guardians should be people that are close by friends and neighbors. If you don’t have anyone you know, it’s a really good opportunity to get to know people and build those relationships. Then the idea is your long-term guardians or those people, whether they’re related to you or not, that you would want to raise your kids if you could not.
And some people choose people that they’re related to, and some people choose others as good friends. One of the barriers for people putting a plan in place is it takes time to think about it. And it’s stressful, but I always tell people you get that peace of mind, right? Once you have it in place, you don’t have to worry.
You don’t have that thing in the back of your head going; what if something happened tonight? What would happen? I often have clients that come to me and say, you know, I feel bad asking these people to step into this role. And when they report back to me that they’ve had those conversations, they always come back to me and say, ” The person was so honored.
They’ve always had these incredible conversations with their friends and family, and those people come back and really. You know, grow into that position, they feel so honored. So they take the time to get to know your kids better, and they ask you about your wishes. And it’s almost like they become a godparent.
Whether or not you believe in godparents or have that religious preference, they become a mentor to your kid because they know that they have that role. So it’s a beautiful thing.
The second tip is to keep the money for your children. And that means if you leave it to them outright, they can lose it if they go through a divorce or are ever sued. So if they get in a car accident, it’s theirs. Or they get into it, make a wrong business decision, and go bankrupt.
If you leave it to them outright, you’re setting it up for the potential of them losing it. So the best way to go money to your children is through a living trust and the advantages of a living trust over a will. Giving asset protection avoids probate, which is the court process your children will have to go through when you pass away.
If you’re leaving money to minors, it goes through probate; if you leave your assets and a will, it goes through probate. The only way to avoid probate is through a living trust, so you want to avoid probate because it’s costly. It takes five to 9% of your state on average, and in most parts of the country, it takes between nine months and two years.
The children couldn’t afford to pay for the mortgage in the home, and everything wasn’t set up correctly, so they didn’t have money coming in to pay it. So the house had to be foreclosed on, and it was lost through that whole probate process. So not only can assets be lost that way, but also it’s just a very time-consuming process, and you can only build in protection like you can with a trust-based plan.
Trust is like setting up an extension of you. It’s a vehicle for your assets; you get those advantages as you do with a business regarding tax minimization and asset protection. And that ability to pass things on smoothly is essentially a contract you’re setting up. My goal is always to make the process simple, but there’s, you know, a lot of misconceptions out there that living trust is just for the, you know, multi-multimillionaires.
And it’s not; I don’t have a specific cutoff of a net worth that you need to have to have a living trust. Some people, like here in Colorado, say that if you have under $75,000 in assets, there’s expedited probate. So if I were he would have to say a number, I would say, you know, traditionally people who have less than $75,000, it’s more of an expedited probate.
Maybe it’s not worth it for them, but I have. Still, I don’t set a specific number because I like to take through my client’s situations and explain to them what would happen to their family if they had a will versus having trust and how the different things will play out based on their values.
I have some clients who have dynamics in their families where they have drug-addicted family members, and they want to make sure that they have a trust set up so that these drug-addicted family members would never raise their kids or that those family members aren’t going to try to get into those assets.
It’s more about your control. And want to make sure everything’s aligned with your values. So yeah, setting up a trust. You know, it’s helpful to work with a lawyer because we can simplify it and design something specifically for you.
And if you have a specific situation or need, you should speak with a lawyer. The tricky thing about some of those tools is that there are so many. Mistakes can be made, and it almost gives a false sense of security. And so every day when I have clients come to me, and they’re like, oh, we drafted this online, and we’re afraid that it won’t work, and I go through and explain to them what.
Needs to be there and what’s there, their eyes are opened, and it is something that you’ve worked your whole life to create this wealth and to make these assets and, you know, setting yourself up and your family up for success is worth that investment. And it will save, you know, I keep my clients 50 to a hundred thousand dollars on average.
Should your children be aware of what is going to your wishes? Like should you share those with your family, or do you like to leave your will in your safe deposit box or your safe in your house?
Because you said advice, I throw in a quick disclaimer that I probably should have said at the beginning, which is everything I’m talking about today is legal education.
For me to give you legal advice, we would have to have, and I know that’s not what you’re asking for, but I’m just going to say that. For those listening, for us, for me to give you legal advice, you would need to hire me, and we need to have a specific relationship, or I can. Know your situation. So everything we’re talking about today is general education. You would like to work with a professional for your specific needs.
For all of my clients with adult children, I always encourage them to do a family meeting with them and explain to them how their plan would work and what the essential documents are and for them to meet me.
Folder in the mail envelope of their documents. I didn’t look at them. And if something would’ve happened to them, I would’ve had, I would’ve opened it, and I would’ve been overwhelmed, especially at that moment.
I encourage you to start having those conversations with your parents. Make sure you understand what they have in place now, and if they don’t have something in place, it is a massive benefit for you to have them do it because you’re going to be the one dealing with it.
There are so many times when I have clients calling me, potential clients, calling me with their parents that are in a state of dementia, it’s too late to sign certain documents, and then they have to go to court, and they wish it would’ve been taken care of when their parents were healthy and.
To have an inventory of what you have in one place. So we always prepare for my clients a family wealth inventory. But even if you’re not ready to speak with an attorney, one of the significant risks to your family is if something were to happen to you today.
People wouldn’t know. Your family would need to find out where your assets are, what policies you have, what bank accounts, or what insurance you have. And so the big illustration of this problem is in Colorado. We have an unclaimed property department that has 55 million in assets. California has 9 billion in its Department of Uncleaned property.
So assets get lost. Essentially. That’s what happens. So, take a moment, and create a folder, but you know the first page of all your bank accounts.
The first page of all your life insurance, your retirement accounts. That one you got from work that you just remembered. Put that all in one place. Tell your spouse where it is.
Tell your family where it is in your house, your parents, the people that don’t live with you that you trust so that they know if something were to happen, this is where everything is and that will. Make things smooth for everyone.
I would go to pat personal family lawyer.com. I have a free tool on my website that you can name Legal Guardians. I will guide you through it, and you can pull down the documents and get started on that immediately. And you can link to that from free legal tool.com on Instagram.
I’m a law mother and CEO. I have a Working Moms podcast you can link to from my website, law mother.com. So yeah, happy to support you and your family and your business. We will be putting all of her links in the show notes so then that way you can get connected with her. And I want to say thank you so much.
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