How to Add Loved Ones to Financial Accounts

Transcript

good afternoon everyone i'm stephanie garces owner of garces law firm thank you for joining us for pink mic legal confessions it's been a while so i'm happy to see you guys today i wanted to check in because we have a really interesting episode today to talk about how do i add my loved ones to my estate plan particularly when it comes to the financial accounts a lot of people have questions about this you know a lot of this is very it seems really easy but there's a lot of complex you know layers to it depending on who's in the accounts who's not in the accounts who is living who is not i get questions like that all the time so thank you so much for joining us today as you know legacy planning in general doesn't just mean the transfer of assets it also means the transfer of accounts and when someone passes away or perhaps they haven't passed away they're just not doing well you may consider whether or not they have an estate plan together and who's on the account so that people can have access to the accounts financial accounts have been established for quite a long time now every bank has their own rules but some of the stuff isn't changed where the bank is very very in tune with wanting to know who is who's the person asking you do the changes how do you do the changes so that is what we're talking about today so like i mentioned before i'm stephanie garces owner of garces law firm founding attorney of garces law firm we're in arlington heights where we help parents secure their legacies and prepare for the unexpected now one of the few things that i'm going to be covering today that goes hand in hand with estate planning as i mentioned is financial accounts why do we care about who's on the financial account what does it actually mean well when we discuss creating a will most people think that it's just a document that just tells people what your wishes are and that's the only thing that you need but it's a lot more complex than that and there is so many questions that people have just from asking do i need a will i always say this on pink mic legal confessions but you should always consider a basic estate plan even if you don't have a lot many people say i don't have a lot that doesn't matter you certainly want to have someone in charge of your affairs in the event of your unexpected absence so that is always important several steps have to be taken though to ensure that your family members don't have to deal with the red tape and really getting stuck in the minutia of dealing with probate in dealing with all these other layers that come after someone has passed expectedly or unexpectedly whether someone has a plan really does matter for the outcome financial accounts in particular require planning in advance they have several ways to add designated individuals have access to those accounts whether it's when you're living other times people will add something in the trust kind of identify who would be the person in charge of their account when they're not living and so today we're going to cover those topics in various ways to address the concerns of those of you who really want to know how do i designate a beneficiary and in some cases even give access to your accounts or to your assets because of your perhaps your mental state or perhaps your age or perhaps whatever chapter you are in your life that's usually one of the things i always talk about now before i start just so you know i always mention this but estate planning as with anything else in the law is not a one size fit all not everything is crafted perfectly you can't use it every single time for every single person so just keep that in mind as we talk because everyone's individuality and different wishes are not the same so there's always going to be different ways to handle the estate plan but we are giving advice today just in the general sense so let's get started so one of the things i get questions about a lot is when is a good time to start thinking about adding children and loved ones to an account well typically it depends you have to think about who your children are you know who is of someone that you trust if it's a family member do you add them to the account or do you not i mean these are questions that come up everyone's situation is different there may be reasons why you would want to add somebody many times people will come to me and say well my son is on the account with me or my daughter is on the account with me and while you can certainly do that while you're living it's not a bad thing you do have to keep in mind that the person that you're choosing has access to your money so make sure that the person that's there someone that you trust and this can actually lead to a lot of family drama sometimes if someone is chosen over another sibling or perhaps it's a family member not someone else that's directly in the family so that question is really it depends you know you certainly want to think about it if you potentially think that you may need access to those accounts and maybe your health isn't isn't well that's a good time to start thinking about it there's also something that we draft up usually as an estate plan called powers of attorney that allows someone to really have access to those accounts in the event they needed to do something like handle a transaction and you aren't able to make decisions for yourself so there are different avenues of just adding someone to an account in adding to the account it just depends on the situation we don't always highly recommend it depending on the family dynamic and other times it does make sense so it just depends on the situation now there are different types of assets that come up in an estate plan and so there's different types of accounts just to kind of give you an overview of what counts those are there's investment accounts investment accounts are ones that you actually use to put in the marketplace for example or perhaps they're if you have a financial advisor that you work with they'll have accounts that are specifically designated for investing and trying to grow that money i always say grow it while you sleep so this is money that's working for you behind the scenes that's considered an investment account perhaps there's also like retirement accounts retirement accounts and are very different than investment accounts to an extent for example there's 401ks those are considered retirement accounts and those are treated a little bit different than the checking account and that they they tend to pass through the estate assuming that there is someone already named as a beneficiary so those are considerably important but you certainly want to check to see if you have someone in place and those accounts and typically we do assess those on a case-by-case basis so when we do a consultation with them we'll ask them about this information because we want to see if they're they have everything in place we don't actually know until we see the documents some of the other accounts that exist in an estate plan is bank accounts as you already know the basic checking or the savings account sometimes people will even have different types of accounts for their business if someone as a business owner you might have a business account so those are other types of the plans that are accounted for in estate plan and when we talk about these things like i said we thoroughly review everything to make sure that we know how much is in there whether or not it's being set up properly and do we have beneficiaries in place does this person already have an existing estate plan or do they need to tweak it to make sure that everything is going in a direction to avoid probate upon their death and that's really where our expertise really comes through so there's also different assets that are handled in regards to real estate that's actually one of the assets of the many assets that we talk about a lot of times when clients have consultations with us they talk a lot about you know their accounts and their money in homes and absolutely real estate properties are worth a lot of money and they definitely matter in your portfolio of assets so i just like people to think about that big picture there is a whole conversation to be had when it comes to the actual real estate property but it really matters where it's at what states those are things that we advise on who are the owners of those properties we ask about that sort of thing how much is the value of the home is it in your is it in your name is it in another family member's name so all of that stuff matters and these are just other assets that i'm mentioning on a list of money assets so that you understand what's being considered when so it really just depends on what we're dealing with but real estate is really it's tricky because there could be a number of real estate properties that one owns i know personally i've had a number of clients that have been fortunate enough to have more than one property and so we certainly discuss what are your options when it comes to protecting those assets other than just creating your trust there is a level of protection to actually put a silo around those properties in the event something happens to you or perhaps you want to leave it in your family or have them sell it so there's a lot of things you could do with that it's just important to talk about the real estate assets when it comes to an estate plan because there is no other way around that so you have to actually account for that in the state mistake plan so just something to keep in mind so those are kind of the big pictures some of the assets of course there's you know boats and cars and you know definitely people that have houses and and cars that are worth a lot of money those are still worth something so those are things to think about some other assets could also be i know i've had people have you know bitcoin bitcoin is a big thing right now that talks about you know this talks about bitcoin covers like the currency that talks about the the electronic future of some of this currency and you know fortunately that is something that is being explored and it has to be considered during an estate plan so if you're one of those bitcoin users you don't know that that could be considered an asset the other thing is designated beneficiaries in general that is really a process that each financial institution has certainly there's a department for every bank where you can actually call whether it's customer service or perhaps you can even go in if you're if you'd like to go into the bank to sign the paperwork to actually add the beneficiaries to these accounts and i cannot stress how important it is to even consider this as a step just in general even before you come see us or when you come see us it's important for you to understand what are the accounts that i have how many what banks are they at i know people will have more than one account sometimes different banks and all of that so just important for you to consider this because having a beneficiary in these accounts is vital it's vital because you're really dealing with the potential of having a property or should say an asset that potentially doesn't have a beneficiary so that really complicates things when and actually even if it's in your name individually i know people have a spouse or significant other and they have things individually that does matter whether it's something that you can't add a beneficiary depending on the type of account i know certain banks will treat certain accounts as ones that you can't add a beneficiary so then you may have to convert it to another account so these are just interesting points to discuss because you know it's easy to say i'm just going to add somebody but you really have to think about where are these accounts located what kind of accounts are they and can i get a beneficiary and how as i mentioned the customer service at every bank or even going in these are forms that they give you some of them are called transfer on death some of them are called beneficiary forms just depends on the bank every bank is really different depending on the state where you're at and all of that so those are things to think about when adding beneficiaries to your designated accounts to make sure those are in order so we certainly got our clients in that by the way because it's very very cumbersome to do that so we certainly use that as a point to make sure we're giving the proper advice to make sure that clients are taken care of so that they can understand that we're here to help them till the end so that's what that's what that is now one of the questions i also get once in a while is how does a durable power of attorney work well people will say can it be used for accounts for someone to have access and spend the money without you know my knowledge well there are perimeters to these powers of eternity the powers of attorney or i always say are very powerful documents they're actually used when you are living but cannot make decisions on your behalf typically the power of attorney will have different stipulations in it one of the ones that i'll say is when do you want it to be active do you want to be active now or perhaps when a physician were to deem you incapacitated so there are parameters and everything is to an extent customizable in the power of attorney now there are a specific ones that illinois uses so if you are looking to do this you certainly want to get someone that is licensed in illinois particularly if you are residing in illinois or in whatever state that you're in i have clients that are between two states and they're snowbirds so you certainly want to make sure you consult your attorney with that to make sure you're indicating to them where you are in different parts of the year at least for residence purposes but yes the power of attorney does actually allow someone to have access to your accounts with parameters typically you want not really not really without your knowledge you would hope if you pick the right person that won't happen but and also there's parameters to these powers of attorneys so so you should not worry that someone's going to just go to the bank and steal your money the idea is that you actually use this power of attorney we craft it for you we really consider in a way the option as to who you would pick and who would be the right person for you and then we actually put it together so that in the event you became incapacitated for some reason then we can't have somebody step into your shoes and have access to the accounts to do certain things for example if there needed to be a stock purchase or a stock sold they would allow them to do that to maybe enter into a real estate transaction that would allow them to do that there's a number of things there's actually a litany of items that you can and cannot allow the agent or the person in stepping into your shoes to do so you have full control over that that's why the powers of attorney are very important in that it gives you back the control where you are living while you are saying so that you can actually make sure that everything that you want is in those letters so that is just kind of a way that the durable power of attorney works and it does allow for certain parameters as to what you will and will not permit that person to do so hopefully not without your knowledge because you would have come to see me and we would have put that together but the idea is that they are very very powerful and actually really really important to really miss any estate plan now when it comes to protections so that money is not spent frivolously between like having a minor child or even young adult children there are ways to customize your estate plan and this is one of the things i like to do a lot depending on the client and what their goals are you can set a age for example for your minor children or perhaps even young adult children or any of your children for that matter whatever age they are to actually have access to some of the money or part of the estate that you left them this is one of the reasons why getting an estate plan is so important because there is no other way to do that many clients will say i left my wishes with my my daughter she knows what i want but unfortunately the law in illinois at least general the law says you have to have this in writing it has to be a valid estate plan and it has to actually stipulate as to what you want the great thing about working with us is that we do go thoroughly through your options we make sure that you are happy with the final product in what it is that you want if you have a change of heart many people do some someone will tell me what they want when we start and then when we get to the end they want something different we accommodate those changes within reason assuming that it's something that you would want and something that we're share ups we do counsel you through some of those parameters where it comes to age i've even had people say i only want to give my child x amount of money if they take a drug test or something like that so there are different parameters to be very creative that's just one example of stuff we can do so just something to keep in mind you can imagine what a young adult would do with you know half a million dollars that they were inherited at age 18 or or younger than that it really is i don't have to tell you guys this but it is kind of risky so there is ways to put parameters around that and that actually should be a reason for you to even want to put an estate line together so that's typically what what that looks like now i just want to recap for some of the people that are watching now as i mentioned today we are talking about how to add your loved ones to financial accounts what does estate assets look like and what are things that we really should consider when it comes to putting an estate plan together i'm stephanie garces owner of garces law firm where we help parents secure their legacy as i always say and we make sure that you are informed with these facebook messages that i'm putting out here because it's really important pink mic legal confessions really really helps educate some of the viewers so that you understand what is an estate plan why do i need to care and what does my legacy look like if i don't have one and if i do have one so that's something that we're talking about today now if you missed my last episode you can watch it anytime on my facebook page you can also watch it on my youtube channel at garces law we have our all our videos there for your access so you can watch it at your convenience and really these are just short videos to answer most of the common questions we get when it comes to estate planning they're quick easy to watch you can watch them anytime you want we welcome you here on tuesdays at one o'clock to discuss pink michael confession topics that are relevant to you and anyone watching now i know a couple people have questions about some of the stuff i've talked about so i kind of wanted to go through the list of questions that i've commonly received if you have any comments that are currently on your mind and you want to share in the questions box go ahead and feel free to drop it in this facebook live and i'll address it as quickly as they can during our facebook message now when we're talking about estate planning one of the things that comes up a lot is people will ask who other than family members can control an estate or perhaps a business and this is really important to discuss because when it comes to family members of course and you can name any family member you can really control your assets when it comes to your business your state however there are other ways that you can actually have someone really just be in charge of your affairs and really oversee everything there's something called the corporate fiduciary which is a bank for example can sometimes be named as the person that's going to be in charge of the estate they're kind of the gatekeepers of that sometimes that's a good option depending on the person and what their situation is outside of family members which is the one that most commonly people ask for there is this idea of having a corporate fiduciary which is a corporate entity like a bank typically a financial institution that handles the the estate and the administration of it assuming that the estate plan is put in place there isn't any reason to go to probit in that extent but there is a third party that's involved so that is something that you can do for your estate plan that can also be an alternative to family members or loved ones being in control of your assets so again depending on your family dynamic and what you see for your legacy that is something that we also discuss if that is suitable for your position now another question i get every so often is how do i remove past spouses or partners on accounts especially financial accounts and this is a really great question because it comes up a lot when i mentioned earlier about customer service lines and the bank you really want to reach out to your bank as soon as possible this is something you do not want to wait for because you just want to make sure that the beneficiaries or the person in the account that has authority the same way you do is someone that you're comfortable with so if an ex-spouse or ex-partner is on there and you wish to remove them just contact your bank as soon as possible and indicate to them that there is a process that you want to start to remove who is on who is off the account they do walk you through that but one thing's for sure is you don't want to wait because if you wait and something happens to you it would be null and void so you certainly want to move forward on those if you're thinking of doing that someone i just asked a question is can my lawyer serve as a trustee or power of attorney typically the general answer is yes however not every attorney does so it really is case specific and a law firm specific so depending on the client and depending the circumstances you could always have your opportunity do that but not every attorney or law firm does for purposes of just liability and perhaps even maybe potential if it's any conflict of interest or some other other idea or other reason there could be so it really just depends it is possible but it just depends on who you're doing your estate plan with and the circumstances now in general one of the most common questions we receive is how much does an estate plan cost well the short answer to this is it depends you knew that was coming but when it comes to the estate plan in general it really really ranges and the reason is is because everyone's case is different at the start of this pink mic legal confessions i mentioned to you that this is not a one size fits all so if you are somebody that perhaps doesn't need a super complex estate plan something very very basic the on the lower end the minimum you would spend possibly could be four hundred dollars let's just say that's that's usually a starting point for for just a basic estate plan that could be a will maybe some powers of attorney that would be a little bit more than 4 400 so it just depends on what we're adding if we go the trust route really depending on the assets it's how we gauge the the price and that's why it's hard to quote because sometimes people will say oh i don't have much but then once you start looking at all the assets it turns out it's a lot more to protect than we thought so that could range it could range anywhere from 2 000 to 4 500. i've seen estates also go for like the bigger net worth clients go up to like six or seven thousand it really depends because we want to make sure that the assets that you're setting forth are protected and so i don't want to give you a quote without really understanding the assets so it is something that you'd have to come see us to really properly quote you and to kind of give you an idea of how much it would actually cost at the end of the day so the question is a good one but the answer is it depends depending on on the person so it is a case by key spaces and as far as the appointments that i offer currently because of the pandemic and really because of the world that we're in we offer in person we offer virtual virtual meaning you know google meets or zoom or teams if whatever whatever platform you're comfortable with i know google meets is really it's actually very simple for us to use we do offer virtual appointments in english and in spanish just so you know so consultations are free 30 minutes and we do offer that to any client that is interested you can always call us at 773-373-9592 text or call that line to make an appointment for your virtual consultation if you are comfortable coming in person you can certainly come on site that's not a problem we will accommodate you so that is really the spiel today i don't know if i have anything else to share but i think we covered a lot today so i just want to thank all the viewers for watching and really just joining us every season that we do this i know we're going at the different season we're going into winter but i do want to thank you guys for watching i really appreciate the feedback the support that we get and quite frankly it's fun to to learn about what people want to know about and be able to share my platform with you so that you know more than than when you started so feel free to always reach out to us we can help you with your estate planning real estate or civil needs and don't ever hesitate to give us a call so as i always mentioned i cherish the opportunity to work with you and your families if you choose to do so and really really just want to thank you again so feel free to join us on tuesdays one o'clock and we'll be covering a new topic shortly so thanks so much for joining pink mic legal confessions and i hope you all stay well take care