234: What You MUST Know about Estate Planning!

Estate planning is by far and away the most ignored topic amongst the high paid professionals with whom I talk to every day. First of all, it's not a very sexy issue. Who likes talking about dying anyway? It's kind of a buzz kill. But I got news for you…eventually you are going to die and you probably won't get to pick when. Remember—I'm a doctor so I'm qualified to make this statement! The other hesitation many have when it comes to estate planning is that it often requires the concept of gifting your assets to a trust or to your children. When you are in your 40s or 50s you might think, "I'm not ready to give my stuff away. I want to have some fun!" A good friend of mine had that exact response when I brought up the issue to him recently. But here's the thing. Gifting an asset to a trust DOES NOT mean giving up control. Remember the old dictum, "Own nothing, control everything." That's what good estate planning is all about. You really don't need to change much of anything in your life while you are living. However, good estate planning will make a world of difference to your loved ones when you die. Imagine for a second that you have amassed a net worth of $10 million and you suddenly pass away. If you didn't do any estate planning, your kids aren't going to see any of that money for a year or more as it goes through a process called probate. And to be clear, A WILL DOES NOT PREVENT PROBATE. Probate is the judicial process whereby a will is "proved" in a court of law. In California, that takes a minimum of two years! The good news is that avoiding probate is easy as establishing a living trust and funding that trust with all your assets. Now, if you are one of our typical accredited investors, a living trust may not be enough if you want to really protect your family's wealth. Estate tax laws are rapidly changing and if you thought this was only a problem for $20 million plus families, you might be in for a rude awakening as new tax legislation is almost certain to come to fruition in the next several years with or without a Biden administration. Estate planning is an area that, regardless of its minimal sex appeal, must be addressed to preserve your wealth and to keep your family safe. You don't want them dealing with this stuff at the same time they have to grieve your death. The good news is, again, you don't have to do a lot to make adequate adjustments to your finances and it's not very expensive. Just do it once and then you can go back to pretending you are immortal! How do you do it? Well, this week's Wealth Formula Podcast will make it all very clear as I interview attorney Joe Longo. Your family will thank you for listening to this one!