C (3:00)

Creating a will and doing estate planning?

B (3:04)

Okay, so creating a will is estate planning. It's one aspect of creating your estate plan. And often it's a really important and foundational aspect of beginning the estate planning process. It's simple enough because it's basically a list of the important people who are going to take part in this process of helping to make sure that your assets are bequeathed to the important people that you're also going to list. And then, of course, what the assets are themselves. So think of it as a guide for someone to say, well, this person will be in charge of my things, and this person who is in charge will give my things to these people, and here are my things. And so it's a really neat way of setting everything out. And, of course, the will is also important because if you have minor children, there is usually a part of the will package that will designate who should take care of your children in the case of a parent's death. If it's only one parent, and if it's two parents, what happens to the children in case of simultaneous death?

C (4:17)

So you said children, but at what point in one's life should you start to think about a will?

B (4:24)

Well, I think it probably makes sense to think about a will once you start accumulating things. But for most people, it will be once they start, you know, they're finished with their education, they're maybe working, they could be married, they're starting to get their adult lives in order. I think that's a good time to start thinking about it. And there's really no special goal to have in mind, right? Because the idea is that you prepare this document. And the truth is, most of these documents have very general terms. So even if you don't own that much, the document will be there. And when you start owning things, even if you forgot you made the will, it will encapsulate all the things that you later own. So it's a great way to have something that you do have to spend some money on the outset to get the will. But then the will is there for when you start accumulating and building your life, and it will speak to the things that you own as you continue to own and grow.

C (5:25)

Here's a question. So you have children. Why won't they just inherit everything? Why do you need a will?

B (5:32)

Well, they will. So if you don't have a will, there are intestacy laws in every state that will dictate how your assets will be distributed. If you're married, they will go to the spouse. If they, if you don't have a spouse, they will. Will go to your next of kin and so on, so forth. However, if you don't have a will and you do go through intestacy, the assets are first frozen and then the court will appoint an administrator who will then decide who will then determine, okay, there are debts that need to be paid. And then we'll start the process of, of bequeathing your assets to your husband or your children or your wife and your children. Or if you don't have anyone like a spouse or children, then it kind of goes down the line and sometimes it can actually go up to your parents. So it's sort of you get to control with the will and make and facilitate those gifts, whereas otherwise someone will do it for you. It's just that you don't get to choose who. Who will do it.

C (6:34)

Let's take a few calls. Hillary is calling in from Westchester. Hi, Hillary, thank you so much for making the time to call, all of it.

D (6:43)

Hi, thank you for taking my call. My mother was extremely organized and much before she needed to, probably in her late 40s, early 50s, had created a binder which said on the front, I'm dead now what? There was even a picture of footprints on the sand. She a school teacher, so she didn't have many assets to speak of. But when she got frontal temporal dementia in her mid-60s, and things really happened very quickly when we were preparing to put her into some care, it was very helpful because she not only had estate stuff and will stuff, all of her finances, her accounts, the amounts it has, what was going to her husband, what was going happen to specifically going to my sister and I. And really like, funny little things, how she wanted to, like where she wanted her ashes to be, how she actually wanted her. Any donations to be given to Planned Parenthood and NPR actually was one of her things. She wanted money in her name to be given to. And it was a real comfort when she wasn't verbal anymore to like, hear her voice in these funny, organized lists that she had.

B (7:57)

Oh, that sounds so sweet.

C (7:59)

That's how my dad did that. We had a list and he said, if you're reading this, I'm dead. The good news is we don't owe nobody nothing.

B (8:06)

That was the second one. It was it was so perfect. It was his voice exactly. This is a question, a text that.

C (8:14)

Says, if I don't have anyone in my life who was responsible enough to handle my affairs, should I pass? Can I hire someone for this? If.

B (8:23)

Type if. Yes.

C (8:24)

What kind of person would I need?

B (8:27)

Yes, you can absolutely hire someone to be, for example, the executor. Or you can hire. You know, in the case of trust, people hire trustees. And oftentimes a lawyer might be a good person to point you in the right direction. They might be able to do it themselves, but if the costs are not aligned with what you had in mind, then you can ask them for what they recommend. There's no straightforward path. You kind of have to ask around. But typically, somebody who has a license, like a legal license or even an accountant could also. Could also be helpful, because an accounting or legal professional, they're going to be very familiar with the world of estates and taxes, which is very important. And having that expertise will really be helpful when the time comes.

A (9:17)

Let's take another call. Francine is calling in from Saratoga Springs. Hi, Francine. What's on your mind?

E (9:25)

Hi, how are you? Oh, my God, I wish my uncle had a will. So my uncle passed away back in February, and he was. He was a hoarder. And after I started cleaning out his place, I found out he has a lot of debt as well. So my mom is the own, is his next of kin, and I have become the administrator of the estate, I guess, so I could help her out because she's elderly. And so I, you know, I contacted all the creditors and let them know that when I sell the estate, he has about five acres in Cameron Mills, which is about four hours west of where I am. I basically, you know, I don't know if I should open an estate account or should I talk to a lawyer? You know, right now I'm just trying to clean out the place because it was, you know, a bad situation, but I want to be able to pay off that debt.

A (10:25)

Let me dive in here. So she's looking for sort of next steps. She's cleaning out the house. She's figuring things out. What are her next steps?

B (10:32)

So you're cleaning out the house, and you're figuring out, you know, what to do with your uncle's possessions and this land. And I do think that it would be helpful because there's going to be a lot of specifics involved, including the details that you shared, but other things that you'll discover in the process that you'll need probably an Estate lawyer to help with. And I think that's a great example of where it's better not to go it alone with Internet research or AI and to definitely speak to someone in the community, especially someone who's local. Perhaps an attorney in Cameron, in Cameron Mills might also be helpful. Someone who has experience with estates and actually real property. Real estate.

A (11:18)

We had a question here about trusts. I think. This is Michael on line six. Hey, Michael.

F (11:25)

Yeah, hi. I have a number of questions, but my wife passed away in 2020 and that time things were really terrible. So because there was one, one account shed that wasn't. Didn't show beneficiaries, everything had to go to probate and that took endless, like 10 months. So I, I didn't want that. I have a trust and I have several bank accounts there in the trust. However, checking is not. Because I don't think you can put a checking account in a trust. And some people have said I should try to keep a minimal amount in checking because otherwise it's, you know, it's a big amount will go to probate. And is that a good advice to keep less money than I would usually plan?

A (12:06)

Oh, that's interesting.

B (12:08)

So a lot of times people will have a trust and there will be accounts that are held under the trust and to facilitate making daily payments that maybe shouldn't need to be recorded by the trustee at every turn, it's good to transfer some of the money from the trust account to a personal account. And probably it is a good idea to keep just what you need in that personal account, because you can always transfer funds from the trust account to a personal account and doing that actually helps you to keep most of it in the trust account with just having what you need for daily expenses or routine expenses in your personal. And then you can. What the trustee should be doing is just recording a distribution out of the trust account, presumably your trust. You're the beneficiary and record the transaction of the trust account funds going into your checking account. And that should be good to keep the trust in order.

C (13:05)

Our guest is Katrina Robinson. She's a lawyer. She's telling us everything we need to know or some of the things we need to know about estate planning. Have you ever talked to a family member about estate planning? How do the conversations go? Our number is 212433, WNYC 212-433-9692. After a quick break, we'll get into trusts. We'll get into the function of an executor and all of Your questions stay.

A (13:43)

You are listening to all of it on wnyc. I'm Alison Stewart. My guest in studio is Katrina Robinson. She's a lawyer. She's talking to us about wills and estate planning. We've been saying trust here, Will here. Let's get into the definition of a trust. What's the easiest way to understand how a trust works?

B (14:04)

So, Alison, a trust is an agreement. And the way I explained it to my 6 year old daughter was, say, for example, my daughter's going to school in the morning and she says, mom, I've got this labubu. It's my favorite toy in the world and I need you to take care of it for me until I get home from school. So could you do that and I'll say, yes, absolutely, I will take care of it for you. I'll put it in a safe closet and when you get back from school, it will be here ready and waiting for you in good condition, very fluffy, ready to play with you. So she leaves. I take the labubu, I put it away, I put a little label on it in the name of or agreement, right? And then she gets home at 3 o' clock and I say, she goes, well, Mom, I'm here. Where's my labubu? I need it. Okay, let me get it from the closet and give it to her. It looks great. Nothing happened to it. All day long, she's super happy and she goes along her merry way. I've done what I agreed to do and we made an agreement. I fulfilled the agreement and the agreement's over. There are some things that were part of this agreement that I could not have done. I could not, for example, have taken out the Labubu and played with it myself. I could not have sold it on ebay and taken the cash and bought like a necklace or something. I could not have, you know, loaned it out. I could not do anything with it. As if I was the one who had the right to enjoy it. I did not have the right to enjoy it. I had the obligation to take care of it on behalf of my daughter. And that's basically what a revocable trust is like. You set up a trust, it's an agreement between someone who we call the settler, who settles an asset. So my daughter's a settler. In this example, the asset is the labubu. And she's making an agreement with me, the trustee. And my job as trustee is basically to take care of this specific asset on behalf of the settler until they want it back. Now, when she Took the Labubu back. At the end of the day, that's basically her revoking an asset. And so that's why I say it's like a revocable trust, which is the kind of trust where you can actually put an asset in the trust and you can take it back or take some of it back.

A (16:31)

But an irrevocable trust means what?

B (16:34)

Irrevocable trust is more like a completed gift. So, for example, suppose she said to me in the morning, okay, mom, here is my Labubu. I love it so much. I really would like you to take care of it for a very long time. Forever, if possible. And if something happens to me, could you give it to my sister? Because I think she'd really love it. And I'll say, okay, no problem. You don't want to play with this toy anymore, but it's very valuable. You want me to keep it safe for an almost indefinite period of time, I will do that. You can count on me. And I will follow your desire to give it to your sister if she wants it at a certain point later. So what I do is I take the toy, I put it back in the closet with a nice little label, and it stays there for a very long time. And when she gets home from school, she doesn't ask me about it, because the agreement that we have now is that I'm taking care of Labubu indefinitely. And she has, in a way, relinquished her access to it. But she, you know, she still considers it valuable, but now she wants to transfer this value to someone else. And I think irrevocable trusts are like that. It's when somebody wants to make a gift and they're really thinking about someone else who should benefit from this gift later down the line.

A (18:01)

I'm not saying that your 6 year old has tax implications, but what are the tax implications here?

B (18:09)

Well, yes, there are tax implications. So, you know, when you have a revocable trust, typically it's because you can. Because you can revoke the assets and the trust. It's almost like an alter ego for you. So it's sort of the trust, but it's also me. So anything that I would. Anything that I could do that would incur tax, if my trust does it, it also incurs tax and I pay it. Right? When you have revocable trust, what happens is that the trust, if there is no distribution from the trust, if no beneficiary of the trust gets an asset, then. But if there is a transaction, say, for example, we do sell the Labubu. Right. And this is 20 years from now. And it turns out it's a very special, rare Labubu. And we actually make about $200,000 selling this item. Okay. So that might trigger tax, but if we don't distribute out the $200,000 to. To the sister, the trust would have to pay the tax. But if the sister says, nice, I got a good deal, instead of taking this toy when I could have, I now just get the proceeds of this toy, and it's a lot of money, well, then the sister will have to pay tax. Assuming she's at an age where she can pay tax and she would take it as income to her and she would pay tax based on her taxable rate. Or she could say, you know what? I'm so happy that I have $200,000, but actually I only need 1000. So can the trust keep 199,000 and I'll just take 1000 and so 1000 to her will be attributed as income and she will have to pay taxes on that.

A (19:56)

We've got a line on these trusts here. This is John calling from Plainview. Hi, John, what's your question?

F (20:02)

Hi, Allison. Thank you so much. Question is the difference in pros and cons of putting real property like a co op, condo or a house in an irrevocable trust or a revocable trust, and in terms of long term care as well. Thank you so much.

A (20:21)

What do you think?

B (20:21)

Well, I think I actually just dealt with this issue in my co op, and the consensus was that it was actually just as beneficial for the co op to have the shares in a trust as it was for the shareholder to establish the trust and contribute the shares. I think it can do a couple things for you as an individual. Setting up a trust and contributing shares or actual ownership of a property into the trust, you are able to line up the succession of that property rather seamlessly. Because the beauty of the trust is that it doesn't go through probate. So if there are any other family members who live in the home, they can take possession of that home and live in that home. You know, from one moment to the next, they don't have to go through a probate or intestacy. So it really helps facilitate that. And then in terms of any common charges that you have to pay to a condo association or a co op, well, usually there's an account that will be dedicated to paying those shared fees. So for the co op or the condo, it's nice because they don't have to worry about an estate, you know, having to be settled for them to be paid.

A (21:35)

This is an interesting question. I have a will and a revocable trust. Both have the same instructions. The first is a trustee. The second trustee is there in case the first one dies before me. Do I need both of them?

B (21:48)

Both trustees. Oh, that's such a great plan. Because something could happen to you. And it's really great that if you can name a successor trustee just as a backup, really good planning.

A (22:01)

If you're thinking of being an executor.

C (22:05)

What'S important in choosing an executor for.

B (22:07)

Your will or to be a trustee for an executor? I would say the executor has to really understand what the undertaking is. And I think if they can have a good understanding of what your desires are, whether by a letter that you leave or ongoing discussion, they have to really understand what your intention is. And secondly, they have to have the competency to really read the will, understand the will, you know, track down assets, deal with family members, and do so in a timely and professional manner.

C (22:47)

Something you said. It's really important, aside from the wills, the trusts, the trustees, it's the important conversations to have right now. Things that, you know, that people need to know right now. What are some of those things that are very important?

B (23:01)

I think the most important thing is, you know, estate planning and just thinking about how you'd like to leave your assets to other people is really this act of generosity that we've talked about before. It's something that you're doing for people that you care about. It's really for them, because you know you'll be gone. So you don't have to worry too much. But you will. You are concerned, and you. You will have concern about what happens to people that you love and care about. And so especially when you are in that position, if you have any dependence, it's really crucial that you start thinking and having conversations with the people that matter in your life about what your intentions are. And if you are stuck and you just seem like you can't get it done, just try to get some help. And oftentimes you can reach out to friends for help. Friends can refer you to a professional, a lawyer, accountant. They may know someone who's had their will drafted, or they may know someone who set up a trust. And you just keep. Like a detective, you just keep following, you know, and also people's passwords, passwords. Well, passwords is a big one. So every time before I go on a trip, a business trip. I tell my husband where my passwords are just in case. But that's true. People forget that. You know, we have some such our digital lives are so important. A lot of what we do, a lot of our transactions, a lot of everything to do with money takes place with us in front of our phones or our computer. And the bridge between us and what we're looking at on the screen are those logins and passwords. And I won't give any recommendations as to how to keep your passwords because I think that's deeply personal and probably the way I do it is the one that they don't recommend. But you just have to make sure you have access to them and that somebody that you trust in your family can have access to them.

C (24:56)

Katrina Robinson is a lawyer and chief executive officer of the Teton Trust Company specializing in estate planning. Thank you for all your advice. We really appreciate it.

B (25:05)

Oh, thanks, Alison. Thanks so much. I appreciate you. Thank you.

G (25:09)

Our state has changed a lot in the last 140 years. We know because MultiCare has been here guided by a single purpose, making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services, and expanding healthcare access to those who need it most. Together, we're building a healthier future. Learn more@ multicare.org.

B (25:40)

NYC now delivers breaking news, top headlines, and in depth coverage from WNYC and Gothamist every morning, midday and evening. By sponsoring our programming, you'll reach a community of passionate listeners in an uncluttered audio experience. Visit sponsorship wnyc.org to learn more.