Ep. 135 – How to Create an Estate Plan Without the Stress
Do you find the idea of creating an estate plan overwhelming and time-consuming?
It is crucial that we make time with our spouses and have a conversation around estate planning because it’s about our children. We mostly spend our lives building wealth and preparing for retirement and forget to plan for when we’re not here, which is inevitable.
In this episode of the Secure Your Retirement podcast, we have Andres Mazabel, a business development manager who helps families protect their loved ones by creating an estate plan. We cover the importance of an estate plan, the process of preparing and creating one, and much more.
In this episode, find out:
- Why lack of education, high cost, and fear of conversations around death stop people from preparing an estate plan.
- Why you should make the selfless decision to create an estate plan.
- The most common documents you need to have in order to start creating your estate plan.
- The two most common situations when an estate plan is crucial.
- Andres explains how they provide education and help families through their estate planning journey.
- Keep in mind that you can always make changes to your estate plan when you need to.
- The meaning of an estate plan being state-specific plus how Andres keeps up with any language/law changes for his clients.
- Understanding when to look into updating your estate plan.
- The time and process it takes to input information and execute an estate plan.
- “It is a heavy decision, a heavy conversation to have with your spouse, but do you want to make that decision, or do you want a judge at a court to make that decision?”– Andres Mazabel
- “At the end of the day, estate planning is about making it easier for your loved ones, not for you.”– Andres Mazabel
- “Your estate plan can evolve as your life changes.”– Andres Mazabel
If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!
To access the course, simply visit POMWealth.net/podcast.
Here’s the Full Transcript:
|Radon Stancil :||Welcome every to our Monday podcast. Every single Monday, Murs and I, our goal is to bring a expert, somebody that can help us Murs and I, as well as our listeners to get to know something or to understand an area of life that we all need to deal with. And today I’m going to say that we have an individual that’s going to talk about something that every person listening needs, and that is an estate plan. And we’ve got with us an expert. His name is Andres Mazabel. And first of all, let me just say this. Thank you so much, Andres for coming on, talking with us and being able to explain some of the things that we need to know about estate planning. We appreciate it very much.|
|Andres Mazabel :||Of course, absolutely. Looking forward to the conversation.|
|Radon Stancil :||Now you said it was 8:45 there. We’re recording, it’s 11:45 here. Where are you at? Where are you located at right now?|
|Andres Mazabel :||San Diego.|
|Radon Stancil :||San Diego. So San Diego is very beautiful. We’re right now a little chilly where we are. It’s a little cool. You probably don’t ever get chilly there.|
|Andres Mazabel :||We complain in San Diego, anytime it’s under 65 and it is under 65. So you’re probably going to see people in San Diego today with a little light jacket, maybe even a hoodie, so.|
|Radon Stancil :||Oh, wow. Okay.|
|Andres Mazabel :||Yeah. We’re way spoiled out here.|
|Murs Tariq :||I’ve got a quick sword before we dive into it is when, so my wife is from San Diego and her parents live out there. First couple times I’d ever went out there to visit and it was a chillier a day, probably right in the 60s. And I said, well, what if we turn the heat on? And her dad, my now father-in-law goes, yeah, if you find it, you go ahead and turn it right on. But it was amazing to me that a lot of that area does not have heating in their houses. So that was just, it blew my mind that that’s even possible.|
|Andres Mazabel :||We’re spoiled out here, man. That’s for sure.|
|Radon Stancil :||So Andres, Murs and I both are certified financial planners. And when you are taking your exam, they’ve changed a little bit. When we both took it, it was a 10 hour, two day exam. And in order to be able to pass this thing, it’s like, I don’t know, 50% pass rate. Most of the time. Well, I took some pre-courses to help you prep for the CFP exam.|
|Andres Mazabel :||Yep.|
|Radon Stancil :||And when I took my pre-courses the guy who was teaching us about kind of the mindset you have to have in order to be able to pass this rigorous test. He said, if you read a question and anywhere in there, the person does not have a will, or it’s one of the multiple choices. It says, sometimes they’ll write all these complicated numbers about their financial plan and about what their disbursements are and all these things. And if it ever says, what’s the first thing they should do in their overall financial plan and will, or estate plan is there, that is always the answer. And because that’s how important it is.|
|And so I’ve been doing this for 20 years. And one of the things that we talk to people about is, Hey, do you have a will? Many people with millions of dollars do not have a will. They do not have a healthcare power of attorney. They don’t have a durable power of attorney. They don’t have those major documents and you ask them why. And they say, well, I’m going to get to it. I just haven’t got a chance to get to it yet. So I got a question for you. I mean, you work in this arena where you’re helping people get this done. What would you say is the biggest reason why people don’t do this? Why do people that are educated with a lot of money still not do it?|
|Andres Mazabel :||That’s a great question and a good way to start off. And it’s actually what I faced personally when I was in private banking for 13 years, is people always putting it off and having an excuse. What we found is one, there’s a big lack of education. People don’t truly understand what is behind an estate plan. What are your options when it comes to estate planning? And then most importantly too, is how do I actually create one? Right. If you look at last 100 years, since people started really creating estate plans, it’s been traditionally through an attorney and attorneys do great jobs of drafting and executing estate plans for families, but many families have very simple and straightforward needs. So what we see is lack of education and then two, it’s expensive. People don’t want to deal with spending two to $5,000 here in Southern California for an estate plan.|
|And then the last point I would add is, is we as humans, we fear having a conversation around death. We don’t want to sit with a spouse and talk about death. We continue to see that shifting. I think the pandemic has really brought a lot of awareness around what are the consequences of not having an estate plan. And then at the end of the day, being conscious that it’s not a decision for you, it’s actually a very selfless decision that you make for someone else, for your family, for your kids to be able to make sure that they’re taken care of, and that they’re not going through probate and spending thousands of dollars and spending months and months going through the process. So to recap, it’s expensive, people don’t understand it, and then for most people it’s a scary conversation to have.|
|Murs Tariq :||Yeah. Yeah. I mean, I can attest to that. So I’m in the process right now of getting my documents together. Our son was born in March of 2020, so a true pandemic baby. And so now he’s almost two years old and we’re putting these documents together. And having that conversation with my wife is it’s not easy to do. Who’s going to take care of him if something happens to the both of us at the same time? And so how are we going to handle all that? And who is even responsible enough or who do we feel that can carry out our wishes as maybe a guardian? And so it’s nerve wracking and it’s easy to say, well, we’ll handle this tomorrow. And then tomorrow becomes a month and that becomes a year.|
|And all of a sudden you’ve got nothing accomplished. So Andres, I want to ask you, the idea, the concept of an estate plan sometimes seems a little fancy, right? I don’t have any money. Maybe I don’t need an estate plan. Well, an estate plan, I think it kind of comes back to the lack of education around it. So what are you seeing that are the most common documents that people need, regardless of asset size, regardless of how much money they have, or family size, what are you seeing that everyone should have these documents and maybe just explain briefly what they are and what they accomplish.|
|Andres Mazabel :||Yeah. Yeah. That’s a great question. So give an example, at Trust & Will, we’ve helped around 300,000 families so far since we started the company and a majority of those families start with just a will-based plan. So a will-based plan is going to accomplish a couple things. One, it’s what happens when you pass. Where do the assets go? So it helps name a direct beneficiary, and then also executor for your estate. For parents that have kids under the age of 18, also very important. This is one of the biggest reasons why people start creating an estate plan is when they have their first child. You assign a legal guardian for your kids. So as you mentioned, it is a heavy decision. It is a heavy conversation to have with your spouse, but do you want to make that decision or do you want a judge at a court to make that decision? Right.|
|Murs Tariq :||Right.|
|Andres Mazabel :||And then also estate planning. I think this is a big misconception as well. Estate planning isn’t just about dying. It’s also, what if you’re in a car accident, something happens to you. You can’t go into the bank to pay your bills. Or you’re in a coma. Unfortunately, something really bad happened. It also addresses your power of attorney, who can make a decision on your behalf. Your living will also known as a healthcare directive. So you making decision around the type of healthcare that you want to receive. If you can’t make a decision, and then also your HIPAA authorization. This is very common for example, for kids that turn 18. Right. As a parent, you can’t just call a hospital and get information on behalf of your child anymore once they’re 18. So being able to have access to that by having a HIPAA authorization.|
|So it encompasses two things, right? Like when you pass and then for someone like me, like in my early 30s, I’m like, well, that’s not going to happen to me, but one, I never know, because life is wild and we don’t control it. But two, it’s incapacitation as well, it’s having those documents in place. And then the second most comment is a trust-based estate plan. Most people relate to a revocable living trust. And very high level overview, it essentially helps usually avoid probate. So specifically for families that maybe they do have a little bit more in assets. They want more control over when and how they want distributions to be made to their children, maybe I half a million dollars, but I probably don’t want that to be distributed to my kids when they’re 18 or 20. Right. They might not be able to make the best financial decisions. So I can pick and choose with my spouse or by myself when, and how do I want those distributions made to my children. That also becomes private, right?|
|It doesn’t go through probate. So it’s not a public process that it’s going through. So at the end of the day, it really helps outline what are your wishes? There’s many families for example, that are also very passionate around charity, college that you went to, a nonprofit, whatever the case might be. So I think at the end of the day, we spend so much of our times and lives really building our wealth. And what does retirement look like? But a lot of times we forget to actually plan for when we’re not here. And we have to accept the fact that there will come a day that we’re all going to die. So let’s really make that conscious decision, sit down with our spouses and really get it done. Because at the end of the day, again, it’s not a decision for you. You’re helping your loved ones. You’re making it easier for them, not for you.|
|Radon Stancil :||Yeah. That’s very good. I’m glad the way you laid that out. Murs and I, when we work with individuals, if they don’t have a will, we would say you really need to get a will. And we would find that people would, again, procrastinate on that. They would say, yeah, I know I do. I 100% have to, but I haven’t gotten the time to go do that yet. So our first phase, and we started doing this probably about 10 years ago is we started saying, Hey, here’s a document that you can fill out. And then that’s going to introduce you to this attorney. And we got that relationship going and we kind of started moving them in that direction. And we found that by getting people moving, even just to start filling that form out, a lot of people started doing estate plans and getting those accomplished at a much higher rate, but still it was only probably 25%. It’s not everybody.|
|And so we were actively looking for again, I call it 99% of situations. How is it that we can help the person go ahead and just tackle this, but maybe we don’t have to worry about going and setting an appointment and going and driving somewhere else. And how do we do that? And then we met you and learned about Trust & Will. And we said, this is we think, an answer for not everyone, but it’s an answer for a lot of people. So can you explain to us and our listeners, because you opened this up and saying, a lot of cost, go set the appointment, having to get everything together. Those were those barriers. So what has Trust & Will done to kind of overcome those barriers? What’s different to help that person go ahead and get started.|
|Andres Mazabel :||Yeah. Yeah. That’s a great question. We started a little bit over four years ago. And when we looked at the market, we saw, obviously you have attorneys that are drafting the documents and then the online solutions that most people are familiar with is LegalZoom. And what we saw in the industry was a big missing point kind of in the middle, something that is specific to estate planning and inheritance. And then really at the end of the day is providing families with think of it as like TurboTax, like solution. So it’s documents that are drafted and designed by estate planning attorneys. They are state specific in all 50 states. And as you mentioned, most people, you use the 99% of, for example, for your firm, don’t have very complex and advanced estate planning needs. So what we’ve essentially created is a platform that helps empower the individual and the family to walk through the process.|
|They can do it online with the comfort of their home. And then also what’s been really helpful is the live member support. So we understand that most of the families that we’ve helped again, about 300,000 families that have started their estate plan with us, very likely, most of them it’s their first time creating an estate plan. So we lead with education and then two, we provide the live member support. So you start your estate plan. You log in, you’re going through the process. We provide education as you’re going through it. So if you’re a listener, you’re like, well, how do I determine if I need a will or a trust? One, we’re not going to determine that from this podcast, but we provide education to help you make that informed decision.|
|And then as you get started, you’re essentially being, kind of holding your hand at the platform as it’s guiding you through it. But then if you have a question you’re stuck somewhere, you can talk to someone. You can chat in. If it’s a little bit more complex, you can schedule a phone call. And then in certain specific states, we’re rolling out attorney support. If your situation is a little bit more advanced that you need attorney support.|
|And then at the end of the day, you’re going through the process. You finalize it, you can download the documents. Most people actually have us ship it out to them because it’s included in it. And then that’s kind of like your journey of starting your estate plan. And then we provide instructions on what’s the next steps? Notarization. How do you make it legally valid? If a family got a trust, how do you actually fund a trust? Like all the specific instructions are included in there. And then also we don’t have a time gap or how often you can reach out to us. After you create your estate plan, if you have questions, you’re confused about something that’s also where that live member support comes into place.|
|Murs Tariq :||Yeah. Yeah. And I got to say, because I am in the process and I’m using your company to get my documents drafted, I’ve seen the interface. I know how smooth and easy it is. And it goes page by page. Do you need a will, do you need a trust? Do you know if you need a trust? Okay. And then you get to a point where it says, do you need a individual trust or a joint trust? And then it says, if you don’t know what this is, click on this and read about it a little bit. So you can help yourself make a really good decision.|
|So the process from what I have seen as a user, I think is very smooth and like Radon said, we’ll be able to fit the 99% of the people because the majority of people have a very simple estate plan. And the issue is, is that they just don’t have the documents prepared. And so I see you guys really filling that void of, Hey, let’s get this done. Because a lot of times it’s really difficult to set that appointment, go get in your car, go sit down with the attorney, have that awkward conversation with the person that you’ve never met before. And then eventually get some documents down the road. This is just, it’s smooth. And the world that we live in, so technology oriented, I think there’s a lot of value here.|
|Andres Mazabel :||Yeah. Yeah. And I think at the end of the day it just provides families with another option. Right. And for most families, spouse, you’re married or even someone that’s single, at the end of the day, most families nationwide believe it or not just have very simple, straightforward needs. I’m a homeowner. I have kids, I have my 401k, I have a taxable investment account. I have life insurance. It’s pretty straightforward even for families that come from mixed marriages. That’s something that we can also help with. So really at the end of the day, it’s making the conscious decision of, we need to get this done. And then as you guys mentioned previously, that checklist that we help with, it’s like, it really disarms people. It’s like, it’s not as complicated as I thought it was going to be.|
|Here are the decisions I need to make. Here are the actual accounts that I need to input. And then from there it kind of guides you through the process. So I think really at the end of the day, it’s just making sure that you’re getting it done. And then also keep in mind, people can make changes and updates. I think there’s a oh man, like we’re making this decision of aunt Sally taking care of our kids. Well, what if, what if? Make the decision and you can always make changes and updates to it. It’s not a forever decision. Your estate plan can evolve as your life changes as well.|
|Radon Stancil :||So in North Carolina, we are a rather popular state for retirees and we get a lot of people that move from up north. We get some people that move from out west here as well. So you mentioned earlier about state specific. So somebody comes here and they say, I’ve got my estate plan. It was in New Jersey or it was in New York, Pennsylvania, California, wherever. And I’d like to have it be in North Carolina. And when you say state specific, two questions. Number one, could you explain what that means? So if the person is listening, why do we need to be state specific? That’s the first question. And then the second one is what your company does to make sure that you’re staying up to date with any kind of changes within the laws within say North Carolina or any state.|
|Andres Mazabel :||Yeah. Great questions. Question one is state specific really means that every state has very specific language that is going to be included in each plan. Now for most states, you’re not going to see a huge, huge change, but at the end of the day, the way that we built the estate plans, it’s to help abide by the actual state specific regulations that are in place. Two, we do, we have attorneys and staff as you would expect, and they’re doing semi-annual reviews of every single state. So what does this mean? We’re looking at both a federal and state specific to see if there’s any changes that we need to update. Give you an example. These don’t happen very often, but we had a one this year in June where the state of New York updated their power of attorney form. So we knew about it. We were proactive about it.|
|So as soon as that date went live, we reached out to all the members in New York to let them know of the change. And then what are the next steps? Because really at the end of the day, our goal and mission is obviously to make sure that families are protected with the highest quality of documents. And laws will change. Right. So if someone, for example, hasn’t updated their plan in five to 10 years, it’s very likely that they should, right? There’s been, for example, the Secure Act, there’s been various different acts that have passed that affect estate planning. So one, yes, when you change states, you should always look, if you’re planning on staying in that new state for a long time, it is usually always beneficial for you to seek out an attorney, go through our platform to get it updated.|
|And then if you haven’t moved states, but it’s been five plus years, it’s always beneficial just to get a second set of eyes to see, should you be updating your estate plan? And then in most cases like, this is something I face all the time in my private banking career, people create their plan and then their successor trustee, they no longer want them to be successor trustee or someone’s passed, or they’ve had more kids, they’ve bought property, they’ve sold property. So remember just because you have an estate plan one, it’s great that you did, but two, it’s just as important that you’re actually being proactive in making sure that it’s updated as well.|
|Murs Tariq :||Yeah. Yeah. I think that’s a great point. So you’ve done a great job of explaining the process and the value that your company brings to having this virtual solution. And so how long does this take? Because we know that time is the biggest barrier to anyone getting their estate plan. It’s so easy to procrastinate on all this. So say, you know all the answers, you know how you want everything to be laid out, you know where all your accounts are and you’ve got that all listed out. How long does this overall process take to get from answering the questions to documents in hand basically?|
|Andres Mazabel :||Yeah. I mean, if a family or an individual has their decisions ready to go, it will take them to actually input and go through the platform 30, maybe 45 minutes. We actually, we continue to invest in the platform to remove as many barriers as possible. So in the last month or so we actually launched a plat integration. So if you don’t want to sit there and type in all your bank accounts, great, we can actually plug them in via plat integration just to make it easier. So 30 to 45 minutes. Wills are usually a little bit less just because there’s less questions and the flow. And then you complete it, you pay for it. And then documents are shipped out. They’re usually arriving within five business days. And then super important is to making sure that families and individuals are executing the documents, meaning notarizing and or witnessing depending on the state.|
|And you don’t have to do the research. Depending on the state, we provide the very state specific instructions on that and then it’s executed. And then also it’s not just a matter of like the plan. Do people know your executors, your beneficiaries, do they know about your estate plan? Do they know that you named them as an executor? I had many clients unfortunately that would walk in, they had no idea that they were named a successor trustee. They had no idea what it meant and it’s a lot of work for some trust, right? So what we’ve done is one, we can electronically share the estate plan, it’s encrypted obviously, very secure, with your loved ones so they can get access to it. You can share it with your financial advisor. And then also too, we do an incredible job of actually educating that person. What does it mean that you’re a guardian? What does it mean that you’re an executor? So it helps that individual understand their role and what it means so that they prepare.|
|Radon Stancil :||Well, these are all great points and we certainly appreciate you talking with us today. Now I know Murs and I feel it’s so important that we actually, when we were talking and everything, we said, look, here’s how important we think it is. We’re actually going to go out and purchase these. And then if a client of ours is working with us, somebody decides to work with us, we’re actually going to pay for it for our clients.|
|So that they can go on and get this done. That’s how important we think it is. And we’ve been able to put that together for anybody who’s working with us. So obviously if a person’s listening right now and you’re a client of ours or you want to work with us, then you could get this and it’s a part of what you do in our relationship. And you would go through us to do that. But if a person’s listening and they say, yeah, well we don’t want to work with Radon and Murs for some reason, how would they go do it otherwise if they’re not going to do that? What website do they go to and what do they look for?|
|Andres Mazabel :||Yeah, absolutely. So it’s just trustandwill.com. It’s as simple as that. That’s how they actually get started. And then I really appreciate the fact that you guys are really implementing estate planning. I think from a consumer perspective, more and more people are starting to look for, how can I go to a firm that’s really going to take care of all my needs, not just manage my investments, but really look at like very holistic and comprehensive. So kudos to both of you, because I think that’s a great value add in terms of what consumers are really looking for.|
|Radon Stancil :||Well, great. Well Andres, thank you so much for buying out some time on your schedule, coming on and talking to us and to our listeners. We certainly do appreciate it.|
|Andres Mazabel :||Absolutely. This was fun. Thanks for having me. I appreciate it.|