Estate Planning: Should You Avoid Probate? Legal Guide

[00:00:06]okay hello again everybody Paul Rabelais here got a lot to go over I'm gonna give you a little bit background first then we'll jump right into the subject matter a little adjustment here sitting here in my home Baton Rouge Louisiana I'm an estate planning lawyer a crazy world the focus of this video is not the Tracy world focus on this video is well the title of it is you know should you arrange your estate to avoid probate and what does that really mean so I got a lot of information to cover it's going to be awesome a couple of housekeeping notes if you have a joke that's better than my joke of the day bring it on in the live chat if you have a question about this subject matter or quite frankly any kind of estate planning related subject matter throw it in a live chat this is youtube live presentation number four of 20 daily youtube live presentations they're all different and on the first three I know some of you have been on the the presentations there hasn't been a question that was asked that I didn't answer every every time we get a few questions I really like the Q&A part of it so if you got a question throw it out there sometimes it's hard for me to answer the question because I don't really understand it in in the context of your situation but nonetheless I'm gonna try to answer anyway so got a lot going on there got to put the old Ohio means back Thank You Lawrence you're welcome all right all good stuff Lawrence it on happy to have you jump right in couple up you know a couple of the stuff I ask you to do every time you watch one of my videos if you could hit the thumbs up turn that gray to blue blue that helps me out if you want to subscribe to the channel that helps me out it just tells you to do hey show Paul's videos to more people that's all I ask okay so let's jump right into the whole kind of probate discussion and we'll probably go I usually go about 50 minutes depends on questions depends on how fired up I get let's go alright so when we talk about probate let me give you a little bit of history and definition so the term the term avoid probate the term probate gets gets thrown around a lot out there but strictly speaking probate is really just having a judge validate that the will is valid so you may hear yeah we're going through probate or you may hear a little more formally yeah the the judge has to or we have to probate the will or the judge probated the will so strictly speaking probate is really the judge signing some court order that the will is a valid will when somebody dies their will gets presented to a judge every state has formalities that must be met so maybe if it's a will done in a certain format that requires a notary and two witnesses and there's only a notary and there's no witness as well a judge won't probate or validate that will and you'll have to go back to the previous will or maybe apply the law that occurs when will exists depending upon the circumstances so that's just a formality you know you may hear the word probate used in different contexts that's a in general the word probate is used to describe the entire settling of a person's estate and good morning Roxanne from Alabama to you as well so we got some good morning people Marilyn is here or awesome you're welcome tippy I got a friend we call tippy and so good morning to all of you nice to see that and I'm going on and off of the glasses because I I'm getting old probably as old as some of you out there but I can't see the live chat without my glasses on but I think I look better with my glasses off stupid made it really doesn't matter none of that matters okay so a little little bit more probate history then we jump right in so well I've been doing this for 30 years actually 29 years been a lawyer for 30 years but the first year I was a lawyer I was getting a second law degree a master's in tax law Boston University Law School and then 29 years ago I started actually working as a lawyer and really jumped into estate planning from day one and so historically you know probate which is this court supervised process of validating someone's will and overseeing the administration of accounts and real estate and and court supervision over the distribution of the assets pursuant to the will under all of the procedural rules I think historically you had to go through the courts to settle somebody's the state because historically the purpose of probate or one of the main purposes of probate was to make sure that the deceased person's bills got paid their creditors got paid and so when somebody died you couldn't transfer things to the heirs until you gave the proper notice to the creditors until you let certain time periods lapse within which creditors could come collect their debts from the estate and I think those reasons probably don't exist as much today because if people have debt and many people do when they die oftentimes it's home mortgage debt and that lenders going to have you know a mortgage on the property so they're going to get paid when that property gets sold people have car loans and those lenders are going to be protected by the you know by the lien that they have over the vehicle so the vehicle can't be sold or transferred without the bank you know getting paid and so yes we do have people who died with unsecured credit card debt and and that's a whole area in itself we really don't see too many credit card companies getting involved in someone's probate you know somebody dies they have $5,000 of credit card debt I don't want to speak for the credit card companies but it seems like in many of those circumstances they just they take what they can get if the family will voluntarily pay that bill that the deceased person had they'll pay it and quite frankly some I think credit card companies just write it off let it go whatever you want to call it so I think this this historical purpose for probate of making sure that someone's debts get paid before their assets go to the heirs I don't think that that reason is quite as valid today as that was maybe 40 50 years ago before you know so much was done electronically with liens and all of that it's just got a lot easier for for lenders to secure their debt okay but nonetheless I wanna start with an example store the story do that just on most of these videos it just makes it easier for people to understand I thought about maybe a mother who died maybe one mother who died and her heirs went through the probate process and then another mother who died with very similar circumstances but her estate was arranged to avoid the probate process what did what did that look like what were the pros and cons okay so let me just set out the facts let's call it mom number one and mom number two mom number one well both mom and number one and mom number two had similar assets and these are assets that many people have when they pass away they each had a home the only maybe unusual thing I'll apply here is let's say each of them had a piece of real estate out of state maybe it was family property maybe it was vacation property maybe it was a rental property but they owned a piece of property out of state and then and then they had the typical things mom number one and mom number two each had and are a individual return account mom number one and mom number two each had a brokerage account because many people who have accounts at the Merrill Lynch Edward Jones UBS TD Ameritrade all those you know large brokerage firms they often have multiple accounts at those financial institutions they'll have they'll often have their IRA but they'll all often have a separate brokerage account in that and that becomes real important when we talk about probate here in a minute so so mom one and mom two each had an IRA in a brokerage account and then mom one and mom to each had one or more bank accounts because just you know everybody has a checking account some people have savings accounts some people have CDs and then they each had a vehicle so that's kind of the normal stuff that people have when they pass away now we'll talk about mom number one mom number one I don't give you two examples of mom number one one is she had no will and another example is she had a will she named her daughter Linda as the executor and she left her estate to her three children equally in her will and here both mom number one in mom number two have three children and they both want their estates to be divided among the three children equally okay so mom number one dies she has a let's say she has a will she appoints daughter Linda as the executor and she leaves her estate to her three children equally and she has a home she has other property she has an IRA of work which account bank accounts in a vehicle okay so what happens after mom number one with the will and with all of these assets titled in the name of mom number one what happens well some assets are going to be frozen and some assets will be dispersed to the three children a little easier so let's let's let's say the three children get together after mom dies their cooperative they're friendly and I will tell you if they're uncooperative and unfriendly and they want to bicker all bets or all things are gonna last for years we're talking about situations here where the heirs are amicable they get along they love each other but nonetheless they don't they want to each make sure that they get what they're supposed to get and that there's no shenanigans no going on alright so the three children get together after mom number one dies they all take a look at the wheel the wheel names Linda as the executor the will says I leave my entire estate to my three children equally and the three children say what are we going to do and maybe after a little bit of a conversation they say well you know what let's let's go ahead and sell the home let's sell the out-of-state property let's go ahead and get the IRA transfer to the three children mom had three hundred shares of ABC stock and her brokerage account let's just make sure each of the three children get one hundred of those three hundred shares let's divide up mom's bank account and and let's also you know what let's give the granddaughter of the vehicle mom always said she wanted granddaughter to have the vehicle after mom died so let's do that so that's what they all agree on and then at the end of meeting they're like what do we do next we we because they go to the brokerage account and the broker says the brokerage firm and the financial advisor there says you know your mother's account we're required to freeze it you need to go get a lawyer and go through probate and then they go to the bank where mom's bank accounts are and the banker tells either Linda or the three children your mother's bank accounts are frozen you need letters testamentary you need a judgment of possession you need court orders you need this you need that you better talk to a lawyer and so the next appointment that they make is an appointment with a lawyer maybe could have been me could have been somebody else and so the three of them go see the lawyer and you know by the time they go see the lawyer here you know the three kids probably got gather maybe a week after mom died they probably started bouncing around mom's financial institutions for another week and then they realize we need to go get a lawyer so maybe they call they schedule and and maybe a week later they're now meeting with the lawyer and so they're meeting with the lawyer maybe three or four weeks after mom died lawyer says well in this set of circumstances your mother had a will she named you as the executor Linda I think we need to get all the court pleadings prepared to get the will probated we talked about that earlier get the judge to declare that it's a valid will and get a judge to sign the appropriate court orders that Linda is confirmed as the executor so the lawyer says come back in ten days and I'll have all that paperwork ready the three of you can sign the paperwork that you need to sign so that we can go file it at the courthouse to get Linda confirmed as the executor so they come back in days later they sign all the paperwork a week later the lawyer goes to the courthouse and opens the probe a door opens what in Louisiana what we call the succession files all that paperwork and then it goes through a processing procedure where that paperwork makes its way to a judge's office and a judge likely has some young lawyer / law clerk there to review all of the court pleadings and to the best of that law clerks knowledge all of the pleadings are done correct will appear as valid the judge signs the order probating the will and the judge signs an order confirming that Linda is the executor you know and that's up on the 12th floor at the courthouse so that paperwork makes it back makes makes its way back to the basement where the processing department will sign stamp make multiple certified copies to get all of those back to the lawyer and then the lawyer gets that to Linda and Linda's off to the financial institution so what she'll do is she'll go to Mom's banks where mom's bank accounts were frozen Linda will open up an estate account at the bank and with the appropriate court orders after the bank's lawyers review them the bank will move the money from Mom's frozen account into the new estate account that linda has set up so that account is titled estate of mom number one Linda as executor and then she does that at the bank and she does it at the at the brokerage firm where she establishes an estate account at the brokerage firm and then the brokerage firm moon moves mom's investments that are in Mom's frozen brokerage account from the brokerage account into the estate account and now that Linda has been confirmed as the executor they get with a realtor or maybe they'll sell those properties for sale by owner but they'll kind of formally put those the home and the out-of-state property for sale and you know what let's say for example the family decides to keep the out-of-state property it's a condo on the on the Florida Gulf Coast kids want to keep it they want to use it they're gonna keep it so Linda puts the house up for sale and who knows when she'll find a buyer but let's say five months later she finds a buyer the estate Linda as the executor of the estate sells the house she sells it for $300,000 or whatever she spells it for those funds at the closing are payable to estate of mom number one with Linda as executor Linda deposit those deposit those funds into the estate account and the the Hickel still sits there because they want to give it to the to the granddaughter so now the bank account money is in an estate account at the bank the brokerage account investments are in a broke and and then estate brokerage account at the financial institution the house has been sold that out-of-state property still sits there in Mom's name and the vehicle is in Mom's name and so now we've got to prepare more court pleadings they come back to me we got to go back to court with all the inventories of the assets and follow all of these kind of archaic probate rules where we have to do accountings and we have to go inventory assets and debts and all that stuff and then a judge will sign a final court order ordering that the remaining estate assets be distributed to the three children so then Linda will start the process of closing the estate accounts maybe retaining funds to pay mom's income tax next year and income tax preparation but the bulk of the funds will be dispersed out of the estate account to the three children now the vehicle was listed on the inventory of assets because they didn't sell that so the final court order will order that the vehicle be transferred to the three children and oh by the way mom had an IRA but she named the three children as the beneficiary so the three kids didn't need any lawyers or court orders to get that IRA money they just needed a death certificate take that to the financial institution and then the financial institution would set up three new inherited IRA accounts divided up mom's IRA and the three new inherited account IRAs no probate no court orders required to transfer an IRA or life insurance or an annuity at death because those are kind of items that can be transferred pursuant to a beneficiary designation form with the financial institution all right so that's a key point there all right but now you're starting to get an idea the the kids will take that final what we call here judgment of possession or final court order to the office of Motor Vehicles and then the office of Motor Vehicles will issue a new title and the three children's names now the three children can donate their interest in that vehicle to the granddaughter who the three children want to have the vehicle so that takes place and now the estate is kind of wrapped up the the brokerage firm will also establish new brokerage accounts for each of the three children and once the final court orders are signed then the brokerage firm we'll transfer the 300 shares of ABC Inc stock from Mom's estate accounts mom number ones estate account 100 shares to each of the new three individual brokerage accounts on behalf of each of the three children so you know all of that stuff it takes some time and it takes some money you're hiring lawyer is probably the biggest expense is you know there's there's lawyer charges there's there's court filing fees sometimes there's accountings that are necessary and so all of that takes time and money but the family gets it and it gets done and they kind of go on their merry way and and that whole procedure it could have if it was very efficiently done meaning kind of the day after mom died the three kids are in the lawyer's office and everybody was boom boom boom kind of ready willing and able to get stuff done immediately there were no lapses things went fast at the courthouse paperwork didn't sit on a judge's desk for weeks or months at a time maybe in a kind of a quick scenario or a normal scenario where there's no complications that might have taken kind of maybe three or four months to get all of that done but the chance for there being some complication because there are so many moving parts from the lawyers to the parties to the children to the courthouse employees to the judges office to the people that you have to work with at the financial institutions and their lawyers who have to interpret court orders with so many moving parts there can and often is delays that really aren't the fault of any body it's more of the fault of kind of the system and what I think causes some stress is that one that day that that mom number one died and the three kids discovered that mom's estate was worth $900,000 $600,000 three million dollars doesn't really matter but those kids on the day that they met shortly after mom died they kind of felt like that's that's their money and and they started behaving and acting like they already had it and so they started kind of looking around at the new cars they started looking around at the new homes they started you know going shopping and because they were expecting that when fall and they knew that that $900,000 was just sitting there and they were just a step away from getting the $300,000 because there were three children so they started acting like they had it and then delay comes and then another delay comes and then another delay comes and that boy that creates some stress and then you know what I saw recently was you know the the market collapsed and so what was nine hundred thousand turned into seven hundred thousand and that caused more stress why can't we get this done why isn't it over the the investments are just going down down down and value so you know sometimes you see some some stress in that proceeding and so that's just it's it's just the nature of these these events so that's kind of a common scenario when there is a probate I wanted to kind of teach you what a probate was by giving you an example but the title of this presentation is more about you know what's the fuss about probate and should you avoid probate so now I want to talk and tell you an example about mom number two who did want her three children to avoid having to go through that court an attorney in both probate process or as we call it in Louisiana some people call it a succession when somebody dies so mom number two had the same family circumstances as mom number one she had three children she wanted everything to go to her her three children equally she had a home she had out-of-state property she had an IRA a brokerage account bank accounts on a vehicle oh by the way since the kids wanted to keep the Florida condo after mom died and they wanted it put in their three names as co-owners after they finished the in-state probate which does not address out of state property the kids have to go hire a Florida lawyer or law firm to take them through what's called the Florida ancillary probate to get that Florida condo transferred into the three children's names so it wasn't enough that they had one great lawyer in their hometown in their home state to take them through a probate they had to go do it again in another state to handle the transfer of the out-of-state property okay so you know that's a good question by the way another Alec slow to Ohio thanks for great information hi Matt John again I love the live comments is the income that is made on the estate during probate taxed at 37% like a trust short answer is yes long answer is as well it depends on how much income the estate has because let's say a person dies on December 31st not many people die on December 31st but this is an example and then the estate takes a year to get settled so the kids wind up with the investments with the assets with the rental property with the stock the kids wind up with those assets in their name on the following December 31st so there was a year where the assets of the deceased were owned by the deceased s-- estate so now this you know and and those assets produced income they produce dividends they produced interest they may have produced some rental income and so that's income of the estate and yes before the deceased person died all of that income was was reported on the income tax return of the deceased person the 1040 just like everybody does and then once the heirs received the assets and then as those s that's produced income the heirs reported that income on their return but during that year while the estate had income the estate must file an income tax return and pay estates income tax and as I described on yesterday's YouTube live presentation a married couple filing jointly doesn't pay tax on at 37% unless they have I think is six hundred and twenty-two thousand dollars or more or more than six hundred and twenty-two thousand dollars of taxable income but an estate pays income tax at that highest 37 percent rate when an estate has income exceeding twelve thousand links twelve thousand nine hundred and fifty dollars so not all of the estate's income gets taxed at thirty seven percent but all of the income in excess of 12 thousand nine fifty gets taxed at thirty seven percent so you hit that thirty seven percent rate pretty quick now I will admit most estates don't have a whole lot of income unless they're a large estate so you know if mom had a million dollar CD or brokerage account and let's say during the year that the estate was being administered it produced I'm not talking about appreciation but it produced a a you know those assets produced one percent income you know whether that was interest or dividends or let's say to present that would have been you know twenty thousand dollars of income that the estate would have had to have reported and paid income tax on so some of it $20,000 of income would have been taxed at 37% all right my get to you here in the in Preston senior minute coming at you so there's your answer hope that helped all right and getting to the in Preston senior do non titled items such as jewelry or firearms trigger probate short answer no long answer may be so here's the deal let's say as we're about to discuss mom number two who set up her estate to avoid probate let's say that that home and those were courage accounts none of that required a probate when she died all she had was some she had some jewelry should some non title to personal effects she had a whole slew of furniture she had some art she had some nice jewelry and and you know the three kids were to get that equally really a that stuff is not required to go through any kind of formal probate proceeding because it's not titled the reason heirs have to go through probate is because there's an asset titled in the name of the deceased person and you got to get a judge to order that the title of that asset be transferred to the three years like a home like investments like financial accounts so those assets are frozen and you got to get a judge to unfreeze them by ordering that they be transferred to the heirs non titled personal effects well unless there's some reason out there to tow to put those through the probate process you know typically the heirs just take physical possession of those items and then they go their own merry way now I would say if mom had a will leaving all of her personal effects two or three children and the day after mom dies one child goes in cleans out the house goes and puts everything in and their own storage really keeps the other two children from you know trying to figure out how to properly divide those things then then yeah you're probably gonna see the party's lawyer up and go through the probate process to force that one who went in and took everything to give it back and do what they need to do but I'd say in general know that probate isn't required to deal with those non titled firearms jewelry things like that all right you're welcome John Emma all right look another good friend named John and I got a tip e on a John M so good stuff okay so now we're gonna talk about the example where mom number two she wanted to arrange her estate so that her kids wouldn't have to go through probate had the same stuff home out of state property IRA brokerage accounts bank accounts vehicles mom number two goes to a lawyer while she's alive and while she's healthy and says I want what I have to go to my three children I want my daughter Linda to be in charge of making sure that each of my three children inherit what I have equally and I'd like to avoid probate maybe maybe mom number two went through a probate when her father died years ago and it was it was it was a hassle and so mom number two so the lawyer tells mom number two well if you want to avoid probate instead of leaving everything to your children through your will perhaps we should set up your mom number two revocable living trust and title those assets that are presently in your name retitle them into your trust things that are in a trust when you die the courts don't want to have anything to do with overseeing the disposition of that they only want to be involved when assets are in your name when you die and so what we'll do is we'll set up your mom number two revocable living trusts will have that trust say that you're the trustee and you can do whatever you want to with those trust assets while you're alive you can buy sell spin give away do whatever you want to do but your trust will say when you die your daughter Linda her title will be the successor trustee and the trust will say that it's her job to do what she needs to do sell what needs to be sold but make sure everything gets divided up three ways equally among your three children one of which is Linda okay so typically again good question I'm not sure how attorney networking works but if you know any estate planning lawyers in Maryland that you don't mind recommending please do can't think of any offhand but if it comes to me you'll be the first to know I do know a lot of lawyers around the country so if you have a request feel free okay so mom says mom number two says I like the sound of that let's set up my living my revocable living trust because I want to well my kids to avoid having to go through courts and lawyers when I die so a lawyer and mom number two they established them number two revocable living trusts the lawyer does the paperwork to transfer not only mom's home but the out-of-state Florida condo into the trust now those properties are titled mom number two as trustee of the mom number two revocable living trusts mom goes to her brokerage firm or her financial institution and shiri titles her financial accounts from the name of mom - or mom number two - mom number two as trustee of the mom number two trusts so she can still do whatever she wants to there are no restrictions at all put on mom number two ooh mom uses her own social security number as the tax identification number for the trust because this is what's called a grantor trust which means the trust is really invisible for income tax purposes the trust doesn't file a return now it's different as you mentioned earlier in the live chat when when mom died and the estate did have to get a tax ID number and report income but on mom's revocable living trust it's really all all the income just flows through to mom just includes all of that on her personal return like she's always done and and so now mom holds in and has assets titled mom number two as trustee of the mom number two revocable living trust what that did was when mom number two died those trust assets weren't frozen and Linda mom number twos daughter as the successor trustee of mom's living trusts has immediate access to do what Linda needs to do with those assets so the day after mom dies Linda could sell mom's home she's the trustee there's no delay don't have to get judges involved she can sell it the next day she goes after mom number two dies the day after mom number two dies that property can be transferred out of the mom number to trust that Florida property to the three children so Oh Linda may have to get someone in Florida to do that deed transfer where Linda would signs transferring it out of the mom number two trust and the three children would sign accepting it as co-owners of that property that would get recorded in the florida county records that's what would make the three children the owners of that florida property the day after mom died or maybe at the latest when Linda got mom's death certificate Linda could go to Mom's financial institutions set up three new accounts one for each of the three children and direct the financial institutions to move moms funds mom stock from Mom's trust into the three children's accounts one-third each so literally in a matter of what what could have been days and and probably was days as opposed to months or years mom number two's estate got settled Linda and the children they didn't need to get lawyers involved which is the main expense when probate is necessary courts obviously and judges were not involved in any of these transfers so the idea was mom number to set things up she created her trust and transferred title of assets to her trust so that immediately when mom number two died Linda as the successor trustee could access those assets and divide them up equally among the beneficiaries the IRA by the way stayed in the name of mom number two because the IRA avoids probate anyway it has designated beneficiaries and so as soon as the family got the death certificates the three children will work with the financial institution and they both the money from Mom's IRA into the three new inherited IRA accounts one for each of the three children same thing would have happened with life insurance and annuities once the death certificate comes in the three kids can just go work with the financial institution directly and then they'll divide up the money okay so that should give you an idea of this what happens when you go the kind of traditional customary route it's what you see in the movies people get their will done it's what you hear about when oh man I don't know will so a lot of talk about will will will will will but in reality I think most families and most parents and grandparents and those who are going to be you know leaving a legacy and inheritance a collection of assets to their survivors they like the concept of being able to arrange it so it's outside of all of the court involvement so I'm gonna get into some of those pros and cons here in a minute in fact in in many states there's there's just no debate at all about what people should do you know I have colleagues lawyer friends lawyer colleagues in states like California and in Florida and it's seem that you know I've I've really don't have ever seen any of those lawyer or heard any of those lawyers say you know it's really easy here for families when someone has a will and they just let the probate process govern and oversee the whole settling of the estate that doesn't happen in many of those states because in many of those states the the probate is a nightmare for a number of different reasons even when every participant is 100% supportive of one another you have these required several month long delays still as part of that states probate procedure where heirs just have to wait and then you have all of these statutory percentage of the estate fees that go to executor Zoar that go to lawyers or that go to the courts and so you know when someone has a million dollar estate and you add up these required percentage of the estate fees that must go to others and it turns out to be you know 7 8 % of the estate on a million dollar estate that's 70 or 80 thousand dollars of expense that could have been avoided if the person who died had arranged their estate to avoid that probate process ok so again another question great question Paul is it better to put the IRA in the trust or designate beneficiaries through the IRA all right you know what you're really gonna want to listen to tomorrow's YouTube live presentation but I'm going to answer your question so let's say mom owned an IRA while she was alive well while she was alive mom can't transfer her IRA to a trust an IRA must be owned by an individual so now there's no real need even if she could transfer it to a trust there's no need to because mom can name beneficiaries of her IRA and when mom dies those funds get paid directly to the beneficiaries without courts and lawyers being involved where we here trust with IRAs we typically hear the the question about whether mom should name a trust as a beneficiary or whether she should name her living trust as a beneficiary of her IRA when she dies lots of discussion on that tomorrow in fact last night you could go find it on YouTube there's a video I made about this I don't want to get real over everybody said but this conduit versus accumulation trust as a IRA beneficiary may want to take a look at that it's about 20 minutes long but that starts to get into the naming of a trust as a beneficiary now good question on with from Alex does that apply to annuities yeah annuities just like IRAs have beneficiaries and so if the goal here is to avoid probate there really is no need oh well you well it is possible to transfer ownership of an annuity to a trust it's often just not necessary because you name beneficiaries and just buy an ending beneficiaries you're avoiding probate anyway now if someone has an IRA or an annuity and they name their estate as the beneficiary then it runs through the probate stuff and so really there's very few circumstances where someone should name their estate as the beneficiary of their IRA their annuity or perhaps even their life insurance okay so in many states no debate kind of the the common knowledge if you got anything that would require a probate process when you die get yourself a living trust and avoid the probate process because the probate takes a very long time and it's very expensive and it's just a flat-out hassle and so but here I'm in Louisiana and in there there seems to be a debate about whether people should use wills to leave their estate to their heirs or use a living trust and let me let me kind of give you some of the history of why I think there's a debate cos because some people say once they get educated or once they've been through a either a probate where it was difficult or they've been through a trust that got settled very quickly and easily and neither one of those are are always the case there are some probates that are simple and there are some trust settlements that are difficult so and that all has to do with who's involved how organized things are what are the relationships of all of the parties involved who's the lawyer handling things if a lawyer is is involved so all that plays into it but in Louisiana there seems to be a difference of opinion a lot of people when they when they look at this they they kind of say well wouldn't everybody want to arrange their estate to eliminate the need for that probate and you know my first reaction is you know I don't get stuck on this paralysis by analysis just make a decision and go with it but you know some people say you know Trust really aren't necessary here in our state some people say everybody should have let me trust so here's here's the background on that so when I started working as an estate planning lawyer 29 years ago plus it seemed like you know I worked for the firm I worked for the big firm and it seemed like all is virtually all estate planning lawyers around me were writing wills some clients would question or ask hey what about this living trust thing should I have one of those I hear that avoids the probate or avoids what we call in Louisiana the succession and the lawyers would kind of just fur for some reason kind of quickly talk their clients out of it they'd say things uh probate is not so not so bad and so the reason lawyers would do that in my opinion were several I know in law school I went to Louisiana State University and I have two kids who have already finished law school at Louisiana State University I have another son who's at Tulane law school and all of the teachings now estate planning is not a large part of the curriculum in law school there's usually one class and and I don't know what it's called something like wills and successions successions and donations probate so my point here is is from an estate planning perspective at law school it's all about wills and probate and so that's that's what's taught or wills and successions very little if anything is taught on using you know living trusts as a vehicle to dispose of your assets when you pass away so lawyers come out of law school thinking kind of there's one way to do it it's wills and probate and so 29 years ago and I when I started working as a lawyer that's what everybody did I kind of heard of these letting trust things but none of my superiors we're talking about it much and when a client asked about it they just kind of blew him off and lawyers were in my view you know kind of comfortable advocating or recommending you know that couples because oftentimes estate planning is done by a married couple husband and wife lawyers I think we're very comfortable with the wills and probate scenario they got paid three times at least they got paid when they set up the wills and powers of attorney and all the other ancillary stuff that went with it and then when the first spouse died the lawyer would the the family would go back to the lawyer because the family was stuck accounts and real estate titles were frozen so they had to go back to the lawyer to do the probate when the first spouse died and then maybe a few years later when the surviving spouse died the family had to go back to the lawyer or law firm to gain access to the family assets because again they were frozen when the surviving spouse died so the later got paid three times and lawyers got kind of comfortable doing that in addition there were and I'm going to use the word sleazy there were sleazy insurance and annuity salesmen who have been out there for the last three decades really advocating don't do a will don't do a trust I mean they were saying don't do a will as the vehicle to leave what you have to your heirs do a living trust now they weren't advocating that the sleazy insurance salesman and annuity salesman they weren't advocating living trusts because they were looking after the best interests of their prospective clients they were advocating living trusts to their perspective insurance and annuity buyers because if the insurance salesman was going to help them set that up that prospective client needed to disclose to the insurance salesman all of the financial accounts that that person owned which would make it easier for the insurance salesman to make their insurance or annuity sale because part of getting a living trust setup is disclosing what you own so that those accounts can be retitled into the name of the trust and so with the sleazy and I don't use the word sleazy to determine to to indicate that all people in the insurance and annuity and financial services field are sleazy not only knows there's enough sleazy attorneys out there but there were people in the financial services field who were going through the backdoor by helping people set up living trusts so that those sleazy salesman could find out exactly how much those people had so that they could sell more insurance and annuity products and I think the kind of blue blood lawyers who were advocating wills and probate they didn't want to be giving the same advice as the sleazy financial people were and so the lawyers kind of stuck with their will and probate advice even though the financial people were advocating trusts which some consumers wanted but the insurance salesmen were advocating it for the wrong reason so that created some conflict for their and for that reason I think many lawyers just kind of stuck with their guns and advise their clients to do wills and the probate or multiple probates depending upon whether it's a married couple and multiple probates depending upon whether a person owned a real estate and more than one state so it's a it's a complicated thing in addition I think a lot of lawyers kind of pass it along as you know probate is not that bad but but when I when I talk to lawyers I hear one thing when I talk to consumers it's like I hear a different story and what I find is that the consumers out there tend to be the type who you know those those parents those grandparents they they look at this as their kind of last opportunity to do something for their family and they they not only like the idea of keeping their family out of the court system they just like the idea of doing whatever they can do to make it easier for their survivors and if that means they got to do a little more nail to make it easier for their survivors in the future the people that they love the most then then they like the the concept of this living trust arrangement because they they want to do what they can to make things easier for their survivors now I will tell you over the last three months with the cove in nineteen coronavirus whatever you want to call it that that that virus that we had did no justice for probate because courthouse has flat-out shut down and so we were dealing with some probate scenarios where you know people couldn't get the money they a mother or father died accounts were frozen courthouses were closed there's only so much us lawyers could do and and no one could get at the money until court houses have started to open back up judges have started to come back to work court orders ultimately are now starting to be signed and it's causing additional delay and the families gaining access to assets under the probate proceeding so so that's been a kind of knock on probate lately all right so really there you have it you've probably never heard it that way but I wanted to spend another 53 54 minutes the history behind probate given you two examples of identical people one family arranging in a manner that required the probe a one that avoided the probate let you make the decisions give you some of the underlying backstory on wills versus trusts and how some lawyers feel about it tomorrow is a biggie before I tell you about tomorrow's YouTube live presentation I am going to encourage you to smash the like button it's it's the only it's one of only about three things I sell on these YouTube live presentations I like given about ninety nine percent good solid information that you can use and take to your people or whoever but I do want to sell you on smashing the like button on hitting the subscribe now this cost anything hitting the subscribe button and the notification bell so that when you pull up the YouTube website and they give you some suggestions of videos to watch if you've subscribed they'll likely show you one or two of my videos it just gets YouTube to tell it tells you to send my videos and show my videos to more people I'm just trying to spread the word I'm trying to get up to I got this little girl trying to get up to 10,000 subscribers on my youtube channel I think I'm around 6200 right now but if you could share this information with others tomorrow if you know somebody who owns an IRA you're gonna want to get them on tomorrow's YouTube live presentation significant changes to our rules and regulations on what you can do kind of from the grave to control the your IRA money after you die I'm gonna go through all of that I've done a lot of Believe It or Not self-study on this issue just in the last few months because the new secure Act took effect for people who died on one or after January 1st of 2020 so we got a whole new set of rules and it's really interesting just to see what you can do with your with your IRA which is for many people by far the largest financial asset that they have so the the IRA beneficiary designation should not be just an afterthought there should be you know some you know some proactive informed decisions made about that that's what tomorrow's YouTube live presentation is about so if everybody who watches this and probably today about 200 people will watch this only it looks like 23 or so present right now but then a lot of people are gonna watch the recording afterwards so if you know somebody who has an IRA particularly large IRA tell um hey I got this lawyer he's going to tell you all about IRA beneficiary designations tomorrow I don't want to throw out these over your head terms of conduit trust accumulation trust trust as beneficiaries but you're gonna be an expert after you watch the YouTube live presentation tomorrow 10:00 a.m. Central Time share it with everybody you know like the video subscribe all the good stuff if you got a joke bring it on tomorrow because we're about to finish up here let's see I think we got all the questions answered today we got the last one from Lawrence about putting the IRA and you can't wait is it what put IRA and brokerage account so that's a good question can't put your IRA in a trust you could name it as a beneficiary more on that tomorrow but by all means yes you should put your brokerage account into a trust many states you know those accounts just get frozen when you die because you don't have beneficiaries like you do with IRA so the brokerage account yes so oftentimes tivo an IRA and a robber took out their brokerage account goes in there trusts their IRA stays in their name thanks for the great info question on the house which is jointly almost foul so no probate what would you still recommend a quitclaim deed yeah it depends on your state and where you are but the problem could surface after both spouses died it's got to go through probate so if you put it in your trust with a quitclaim date and won't go through probate your successor trustee of your trust will be able to do what they need to do with it after both spouses pass away that's a quick answer I hope it's applicable based on where you are and what your circumstances are I'm Paul Rabelais I'm gonna stay planning my last sales piece for those of you particularly who have a Louisiana interest you can go to the description you could go to my website not many people coming into the office these days but a lot of people are requesting a 15 minute free call by going to the website clicking on the button you'll see my calendar you schedule the 15-minute call I'll call you promptly at the predetermined time jot down your issue in the comments we'll see you tomorrow you'll have a great day the same number I mean I've never had more than about 25 or 30 at one point a lot of questions a lot of good chat oh I think you'll hear me let's do I know it's