Navigating Health, Wealth, and Estate Decisions Video from Savant Wealth Management

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Welcome to today’s Savant live webinar. Thank you for joining us. Today, we’re discussing navigating health, wealth, and estate decisions.

I imagine many who are joining us today have had their lives disrupted by unexpected health events. We’re especially grateful to be joined today by people across the age spectrum. And whether you’re aiming to strengthen an existing financial and estate plan or looking for guidance on where to start, we hope our time together will reinforce that Savant has strategies and resources available to support you no matter where you are in life or across the country. I’m Danny Hutcherson, a managing partner and financial adviser at Savant and a gerontologist by training. We are very lucky today to have with us Savant’s director of wealth transfer, Dom Parillo. Dom, thanks for joining us.

Thanks for having me today, Danny. I’m really excited about the program we’re putting on. This is just such an important topic, and, I I’m actually really excited to hear, from you and your expertise. It’s a little bit of a divergence from the traditional tax planning and mechanical estate planning presentations. And I know our audience and listeners are going to be really interested to hear, what you have to share.

Well, thank you, Dom. It’s a pleasure to be here and to share with our audience what we see in practice every day at the intersection of health, wealth, and estate planning. So let’s take a look at our agenda.
First, we’ll cover the longevity paradox beginning with the demographics of aging, and then we’ll look at the current state of how health and wealth are linked, specifically in later life when care and caregiving come into focus. And finally, we’ll discuss some of the key estate planning documents that you can use to put your plan in place, some important terms to know, and what the process looks like in practice.

At the end, we’ll take some questions from you. Now while we probably won’t be able to answer everyone’s questions live today, please feel free to leave a question in the q and a box when it shows up on your screen, and we’ll be in touch with you. You can also visit Savant Wealth YouTube’s Savant Wealth’s YouTube page, where you’ll find past webinars on topics like this and others that can get you on the pathway to with a Savant advisor.

Or you can reach out to our team by going to savantwealth.com, and we can connect you with a team member who can help.

So for the next twenty, twenty five minutes or so, I’d like to share a few lessons from a decade of postgraduate training in gerontology, primary care, and public health. But the greatest lessons that I’ve learned on the significance of the link between our health and wealth came from being a family caregiver myself and from seeing so many people in my family and those we serve living with dementia and other major health conditions.

After thirty years as a financial adviser, I’m pleased to confirm that an ounce of prevention and planning can indeed be worth a pound of cure. Now chief among the reasons that I joined Savant in twenty twenty four is that Savant and especially our CEO, Brent Bradeski, have long recognized the connection between health and wealth. And it’s a privilege to work on the firm’s health and well-being initiative, which is one of Savant’s ten key planning areas. My goal for this first section is to help set the stage for Dom by framing some of the challenges and opportunities we face or will face with living longer, which will hopefully underscore why Dom’s insights are so important for us all and for those we love.

So let’s begin our discussion on health and wealth by examining how far we’ve come in terms of longevity, thanks to advancements in health care, and we’ll begin to explore what that means for managing your wealth. So in nineteen hundred, the average life expectancy of a newborn was only thirty two years.

A hundred twenty five years later, thanks to advances in medicine, public health, and standards of living, the life expectancy of newborns has more than doubled to over seventy one years. Now life expectancy today isn’t just longer for infants. The average number of years from a person’s current age until death has been extended across all ages, especially for those aged sixty five and older.

So much so that in the next decade, the total number of adults over sixty five in the US will outnumber children under eighteen for the first time in our history. Looking farther ahead to twenty sixty, people over age sixty five will vastly outnumber children, and there’ll be a lot more of us in terms of numbers. Forty five million people are people over the age of sixty five in twenty sixteen to nearly ninety five million people over age sixty five in twenty sixty. While the number of children and future generations of workers is expected to remain relatively unchanged. And what this means is that having a plan for care will be especially important over the next several decades as there are more people who will need care, but fewer care, fewer people to provide that care.

Now we expect this trend to continue, and this chart illustrates that, particularly among women who live several years longer than men on average. And this incredible growth in the number of adults has already the number of older adults has already brought us a range of demographic marketing taglines like the gray wave, the silver tsunami, very excellent book called the longevity economy. But these terms don’t really capture what life is like as we age and how families and their financial resources can be affected by unexpected events and specifically health events in life.

So underneath this opportunistic messaging of these of these books and marketing slogans, there’s a far more important reality that we have to address.

And a couple of definitions we’ll go through here before we get into how health ties into longevity. So the first is lifespan. Lifespan is simply how long we live from birth until death.

So when you hear the phrase life expectancy, which I used just a few minutes ago, that’s a projection. It’s an estimate of how long an individual or a group of individuals are expected to live, from a certain age until death. So from age sixty five until death or from birth until death. But what we want to focus on for this discussion is how long you actually live, which is your lifespan.

Now if our individual lifespan is how many years we’ll live from birth to death, our health span is how many of those years we live in good health, and specifically, how many years that we’re free from chronic disease, communicable disease, injury, or other disabling conditions that affect our physical and our mental well-being. Now the gap between the two, between how many years we live and how many years we live in good health, is the lifespan health span gap, which you can see here on this page and which is at the heart of the longevity paradox. And that paradox is, in our problem, our challenge is that this gap between how long we live and how many of those years are healthy, it’s actually getting wider.

So despite all the advancements in medicine allowing us to live longer lives, we’re just not seeing the same gains in years of healthy living. This chart shows the global gap between health span and lifespan before the data was skewed during the pandemic. You know, both of those trended downward, and it since reverted back up. But I’m sorry to say that the reality here in the United States where we spend more per capita on health care than any other country in the world is that our gap is the highest.

In fact, the gap between health and total years of life in the US has been rising dramatically since two thousand due primarily to the prevalence of obesity and metabolic disease, the opioid crisis, especially in some parts of the country like Kentucky where I’m from, and a healthy economy driven more by specialist care, health economy driven more by specialist care than primary care and prevention, which have more recently driven our health spans, as you can see on the lower right of this slide, downward, even as longevity gains, the upper slides, were realized.

Now despite living longer than men, women have a similar health span.

So that that means that while the age of while they might be living longer, the age of onset of any major health conditions is about the same. And therefore, there’s a much larger gap for women between their number of healthy years and their total years. So in short, women may live longer, but they’re really not living better. And the total burden in years of disease and disability for women is about twenty to thirty percent higher than for men on average.

Now why is that? I know we have, some academics and researchers, who are on this call right now, and an epidemiologist might tell you that that’s mainly a function of living longer. Older adults need more care later in later in life, and so if you’re living longer, you’re going to need more care. That is true, and we’ll look at that in a moment.

What these numbers also reveal is that the cumulative impact of economic and health disparities for women due to pay gaps, formal and informal maternity leaves, and what public health is coming to realize as a threefold caregiver burden, you know, is really impacting the number of years that they are living, needing care.

So despite the greater balance, there have been some improvements in childcare over recent decades. Well done, men.

And regardless of the wealth level, over their lifespan, women still provide the majority of unpaid care needs for children, partners, and parents. We’ve heard of the sandwich generation, right, you know, which historically is when, you know, people take care of children then go on to take care of parents. But it’s really this this part about partners and, yeah, and women living longer that for them, you know, leads to what we call a triple cheeseburger, you know, caring for children, parents, yeah, and partners. So for women over fifty five, this adds up to over five weeks per year of unpaid full-time work.

That translates to tens of billions of dollars in unpaid hours annually for those without a plan. For families who have a loved one with dementia or long-term disability, these annual numbers are even higher.
So although the impact of caregiving strain is difficult to quantify on an individual level, systematic review by the National Academies of Medicine concluded that spousal caregivers who are less likely to turn over care of their loved one to of their partner to paid workers, actually have a higher subsequent rate of mortality, more than four years compared to non-spousal family caregivers. And for this reason, adding care planning to your financial plan could truly be lifesaving. And it’s not just as simple as buying long term care insurance, especially when there could be preexisting health conditions that make that a challenge. Working with a financial advisor, especially one on a team with a certified financial planner who is a fiduciary, is key to navigating these potential hurdles.

Now before we look at spending in and how spending in later life can change with changes in our health care needs and how proper state planning can ensure your wishes are honored after you’re gone and when you can no longer speak for yourself. Let’s look at the need for care over time for just a bit to get a sense of why health and well-being is one of the ten key planning areas at Savant. So many families will face the moment when it becomes evident that a partner or a parent needs more care than we can provide. And for some, it begins with an urgent phone call, that something has happened to a parent or a partner.

And for others, it’s a slow process of becoming aware of a loved one’s changes in capacity for self care, for cognition, for mobility, for getting around. But it’s not always later in life that we need care. According to a twenty twenty five national caregiver study published by AARP last July, there’s actually a higher probability that an adult in your family under the age of thirty five will need care than between the ages of thirty five and fifty.

Although, overall, we can see on the right hand side of this chart that the need for care generally increases over time with the greatest likelihood occurring over age seventy five.
Now when we talk about care, what exactly do we mean?

So on this slide, we can see the most common reasons that we need care, and this, again, is from that AARP study. And most of them do apply to when we’re older. Dementia is near the top, along with mobility issues, the risk of falling, emotional needs, and other health conditions that can need to that can lead to the need for additional support, either to live independently at home or with assistance at home or in a care community.

Now reviewing this next list of activities of daily living or ADLs, which are essential self-care tasks, we see that the most prevalent care needs relate to physical strength and mobility. So maintaining our physical health is therefore key to retaining our autonomy and independence, which could then help delay the need for care.

Now IADLs, as distinct from ADLs, instrumental activities of daily living, are more complex skills that are needed for living independently from getting out to shop for groceries, maintaining your home, preparing meals, managing your finances, and medications. IADLs are especially important if you or a parent, perhaps, live alone.

On the right side of this chart, we see that care support needs are becoming increasingly complex as well. The percentage of people who need not just one help with at least one ADL, but at least three ADLs is shown to have risen from seventy four percent to eighty four percent in just the last ten years. Now this next slide is for our caregivers.

So the amount of unpaid care provided per week on average is around twenty seven hours. And about seventy percent of the time, that unpaid caregiver is also working. So for those of you joining us who, like us, have balanced work and care responsibilities, we know that this can be an incredibly challenging and stressful burden to carry.

Now for all respondents of the AARP study, the average amount of time that care was needed was around five and a half years. But if we take out those who didn’t need care at all from that average, those who did need care needed an average of seven years.

As I mentioned just a second ago, about seventy percent of caregivers work, and unsurprisingly, over about sixty percent of that care is provided, once again, by women. And that makes sense to a certain extent, given that men don’t live as long on average. But not every family looks the same, and this is why having a plan for care in place well before you or your parents or a partner need care is key.

Now as we wrap up this section on health care and needs, we’ll turn for a moment to the impacts, the financial impacts of providing care on caregivers. So we know that having time off from work is crucial for your mental health and for productivity, and over half of caregivers are forced to go into work late. Not only are they not taking time off, but they’re going into work late, they’re leaving early, or they’re to take time off from work not to go on vacation, but for their caregiving responsibilities. And many caregivers, as we can see from these responses, had to shift from full time to part time status or took leave, were actually reprimanded for attendance or performance issues, had to quit work entirely, or were passed up for promotions.

And all of this, again, is one of the consequences of not having a plan for care and then being put into an unpaid care caregiver role. So the findings on this slide, though, should really set off alarm bells for us all. If you have adult children, if you’re if you’ve received a diagnosis or reaching the age that you may need care, this is the reason to talk with a financial adviser and put a put a plan in place. So of those unpaid caregivers, nearly one third had to stop saving money.

So outside of their work impacts, these are their life impacts. So they had to stop saving money because of the impacts on providing care. In many cases, they’re pitching in to help, you know, those they’re caring for. Many others completely depleted their short-term reserves.

In some cases, their long-term financial resources, including 401ks and other retirement accounts. Over twenty percent of caregivers took on more debt, and some even had to borrow from family and friends just to make ends meet. And despite spending down savings and borrowing at a higher rate, still twenty percent of caregivers were late in making bill payments and saw nearly a thirty percent rise in we saw a nearly thirty percent rise in the number of caregivers who couldn’t afford basic expenses for themselves like food over the last five years.

All of this data reinforces the importance of having a plan for care in place.

Now to me as a gerontologist, this is the most striking slide.

From the same study with from AARP, we see the trend that for care recipients, fewer of them fewer of them had a plan in place in twenty five than just ten years ago.
But on the right side, we can see that caregivers, usually family, are taking up the slack and making plans for care on their own. So for those of you who have a written plan, you’d be in this category on the right. And as a gerontologist, that really gives me hope.

So now one might think that having significant wealth just makes a lot of these problems go away.

For high net worth families, though, without a plan, the stakes can still be high with complex financial pictures, complicated family dynamics, potentially multiple properties, financial dependence, access to documents, businesses that may not have a clear successor, and a strong preference, we find for autonomy and privacy without a plan in place.

All of these could be put at risk with an unexpected health event. Now for family caregivers, beyond the health and financial toll of stress we just looked at, there’s also the emotional weight of uncertainty and unspoken obligations and expectations, both for the person needing care and for those giving it.

For parents, it can mean the loss of control over your own narrative and wishes or in the most extreme cases, potentially the loss of decision making rights.

For adult children, not having a plan can lead them to having to make high stakes decisions while they’re concerned about the condition of their loved one without guidance, without, in many cases, having a full picture of their parents’ financial life and potentially adding stress to those family relationships. And for everyone in the family, there can be missed opportunities for the meaningful connections that can happen when you talk about your plan for care in advance, us yeah. Having that shared understanding and being able to to make decisions together as a family. The goal here isn’t just better documents or financial strategies. It’s having a framework for caring conversations and care conversations based on expert advice that honors both respect for each other, you as family members, and for the right to self agency for the person who needs care.

So what do we see usually, you know, in practice? We see that, you know, the most common industry solutions for care planning, when it is included in a financial plan, involve static population based life expectancies and care cost estimates that really ignore the individual realities of our lives. So at Savant, the advice that we provide is evidence based, personalized, and integrated with a more holistic view of investments, tax, and the estate planning picture. As we’ve seen on this call, the gap between lifespan and health span is getting wider, and it can vary even more significantly depending on your health and lifestyle, family health history, and even where you live. Now let’s talk for just a moment about the importance of location.

Savant currently has over fifty offices across the United States with clients in every state. And one of the key differences in financial planning at Savant is that our advisers consider not just when you may need care, but also where you may need it. From one location to another, care costs can vary by over fifty percent. So having a care plan in place that is specific to who you are, where you live, and what you want in your later years is really what each of us deserve.

Now the good news is that everyone on this call has already taken the first important step toward making a plan, which is gaining a better understanding of how our health can impact our wealth. And the next step is to begin building solutions with a trusted adviser, having a financial plan that considers not only how your health could affect your wealth, but also what your wishes are for when you can no longer speak for yourself and after you’re gone.

That is truly one of the greatest gifts that you can give to your family.

So, Dom, what are some of the key estate planning documents that we would need to formalize our preferences for care and our wishes when we’re gone?

Well, absolutely, Danny. We’re going to discuss some of the core and fundamental documents that I think every person should have. And this is a great topic that ties into your overall theme of planning for not only your health, but your wealth. Because when you think about your estate plan, it is a plan for the care of your assets and really your family after you’re gone from a financial standpoint.

So a formal estate plan can help you identify the right individuals that can serve it in key fiduciary capacities, during your lifetime if there is an unexpected health event. Because, folks, there are a lot of uncertainties in life. Right? You can do all the planning in the world, be of the utmost physical condition in the best shape possible, but you just never know what life is going to throw you.

So it’s important to be aware of all these concepts that Danny spoke about, but also have a plan in place to address those, unexpected circumstances. So that’s what a formal estate plan can address and also making sure that the wealth is held in a structure that you’re comfortable with to protect those that you love. And it doesn’t matter where you’re at in the age spectrum.

Right? You might be nearing the end of your plan, and it’s always hard for all of us to contemplate our own demise. Or you could be, in a caregiving position right now, assisting with an elderly family member, a parent, aunt, uncle, or maybe, have a special needs or incapacitated child. So all of these themes that we’re touching on, I think touch us all in a real way, Danny.

And, you know, part of this is just really making sure that you have a good foundation, well rounded estate plan. So on the next slide, let’s start with some of the basic building blocks. And I I think, and, Danny, I think you would agree that planning for incapacity is often overlooked when people Yeah. People think about their own estate plan.

Oftentimes, the focus is, how are my assets going to be distributed after I die? Right?

Tax planning. Right? Probate avoidance. Just overall distribution planning. But as Danny mentioned and illustrated in his slides, while life expectancies are going up, right, there’s a gap in your life expectancy and your and your health expectancy, meaning that people are going to be far more likely to need assistance from family members or other trusted individuals in making key financial decisions and health care decisions if they are in a long term care facility, for example, if they are legally incapacitated or just starting right need help.

Right? Because I just don’t I want to delegate some of this financial management to my kids or, again, another trusted individual or loved one. So a power of attorney document can allow you to designate an agent who can act on your behalf as if they were you for making either financial or healthcare decisions. And from our point of view, we deal most often with agents when there is an unexpected health event.

You know, mom or dad suffered a stroke or a fall, right? I know I’m named in the document. I don’t know much about mom and dad’s financial picture, but I need to start paying bills, right, and making decisions and taking a proactive role. So power of attorney’s going to allow you to name those agents who you want to assist with financial and health care decisions in the future.

In the absence of a financial power of attorney or power of attorney for health care, when you don’t have these documents, and you do become incapacitated, you’re unable to make financial healthcare decisions for yourself, very possible and likely that a court would need to appoint either a conservator or guardian formally over you so someone can actually have the legal authority to deal with your bank accounts, retirement accounts, investment portfolio, make critical health care decisions. And those individuals that, the court might appoint via default might not necessarily be the people you have in mind or might not be the people most equipped to help, right?

Because, different people in your life, have different skill sets, right? Some might be more financially minded, some might be more, healthcare So these documents are a way for you to nominate and appoint those that you think are going to do the best job for you when the time comes. And these are living, breathing documents, right? The idea is that you evaluate these over time.

So back to the power of attorney for property standpoint, again, is the document that allows you to name a financial agent on your behalf to make financial decisions. If you’re a married couple, oftentimes the spouse is named as the primary. If you have children, oftentimes adult children are named as the successor agents who take over after the first death, right, if the spouse was that was named, can’t serve. But, not everybody has a traditional family, right?

And I think one of the biggest challenges for those that don’t single individuals with no children is who to name. So keep in mind, there are professional trust companies and other professional fiduciaries who can serve in those roles outside of your normal sphere of of influence. So it’s good to speak with an expert to determine what your options are as far as addressing those concerns that you might have.

And when you think about the agent’s authority under a power of attorney for property, for example, those are the assets that are going to be in your name only. We will talk about will and trust concepts in a moment. But, basically, any asset that you own, not titled to a trust, that’s what your agent is going to be able to manage and take care of if you were, again, unable to do so for yourself. So absolutely make sure you have this document in place if you do not to avoid that that conservator or guardianship situation. And if you do have documents in place, it’s good to review the documents at least every three to five years or every time there’s a key life event.

And, you know, just a couple tips when you’re thinking about power of attorney documents, in contemporary estate planning, are bolded, bullet points on the slide, including digital asset authority. What does that mean?

It’s twenty six.

Everybody, whether you think so or not you do or not, has a digital presence online. Right? When you when you sign up for any service, oftentimes, you have to create a username or password. So attorneys are including express digital asset authority provisions or language in these documents to give your named agent access to your email, online presence, the ability to access your digital devices.

So, don’t overlook that in your planning. It’s something that does get missed that’s becoming more important. And also, quick tip, there’s different ways that you can give your agent authority to act as far as the timing goes.

So as practitioners, you know, again, we’re often dealing with power of attorney agents in emergency or unexpected health situations.

So you can make the document effective immediately, which gives your agent the instantaneous authority to act, or you can make the document springing, springing like the season, spring, which means that the agent can’t act until the happening of some future contingent event. Usually, when you’re certified by two physicians, or one, it depends what your document says, in writing, that specify that you’re unable to make financial decisions. So it’s a stylistic, thing, but know, my philosophy on this, and again, get advice from your attorney, your mileage will vary is, boy, those people you name in your documents, you better darn well trust them.

Because if you if you can’t trust them to make decisions when you have capacity, right, and can step in to take control, like, why would you name them in your document to begin with? So we find that when documents are effective immediately, it just makes things easier for that spouse, you know, that adult child to get on the accounts to get money without that that formal step or additional hoop to jump through. And that can be unexpected and especially add to the stress. So keep that in mind, right, there’s when you design your documents.

Now on the health care side of things, right, your health care power of attorney, your agent makes health care decisions.

And, the individuals that you name in these seats don’t necessarily have to be the same people. Right? You don’t have to have your lineup of agents in your power of attorney for property document match the lineup of agents in your health care documents. Think about the people that are going to be best equipped to make decisions.

Right? The person that is really financially savvy might not feel comfortable or be equipped emotionally to make health care decisions. Okay? So, name multiple agents in succession, you know, a backup. Not just one, it’s good to have two or three because you just don’t know if those people you name are going to be in a position to serve or alive, quite frankly, depending on who you name.

Another, I think, really practical consideration on the health care power of attorney, and Danny and I were speaking about this, earlier today, is, it’s a good idea after you update or put in place your healthcare power of attorney to actually provide a copy of that document to your physician and the named individuals in the document. Again, just in case there’s an emergency, situation. The pandemic was a trying time for all of us, and it really brought some of these issues to the surface. And, even if you have documents in place, if nobody can find them or they don’t know that they exist, it can create a lot of confusion as to who’s actually off you know, who you want and who has the authority to make decisions. It can actually delay, critical health care, processes.

So, really important documents, absolutely critical. And then with agents’ authority under power of attorney documents, keep in mind that when you’re no longer with us, when you pass away, that agent’s authority extinguishes, and they no longer have the authority to act on your financial accounts, which is on the next slide where we transition into, more some of the other foundational documents like wills and trusts. So we’ll start with wills because I think most people are familiar with that legal document. Right?

When you think of your estate, it’s my last will and testament. Right? But the wills dispose of your probate property. So it’s important to understand how assets pass at death, to understand the process for how those assets were actually distributed to your lost ones.

So, when you think about, assets that are titled jointly in the name of you and maybe your spouse, right, or another loved one, typically, those assets have a built in right of survivorship at the death of one owner, so there’s no formal asset distribution process.

Those assets just automatically transfer to the surviving owner by operation of law. There’s no probate process, which is the formal process of proving your will, qualifying and appointing an executor, noticing your creditors to distribute before the assets can actually be distributed. Similarly, with beneficiary designated assets, the named beneficiaries on those account forms that you fill out, with the IRA custodian or four zero one or life insurance company, those named beneficiaries receive those assets regardless of what the terms of your will or trust say. So your will only really distributes assets that are titled in your name only, that aren’t titled to a trust or passing by survivorship or by beneficiary designation.

And in your will, you’ll be you nominate, an executor or personal representative. The terminology is different depending on what state you live in. And, really, the executor is the legal fiduciary who’s going to take control of your estate assets and distribute them in accordance with the terms of your will. And, again, the probate process is a is a legal process that, basically guides how those assets are distributed under your will. It can be expensive.

Oftentimes families are hiring attorneys. There are time delays. Again, it varies based on what state you live in, what county you live in, quite frankly.

It could be a one or two month process, or it could be a twelve month process. It just depends on how backed up the court system is, before, the, you know, the estate can be closed, in essence, and everything finalized. Another important thing to keep in mind with wills, and I think this gets overlooked, is that your will is the, only document that allows you to name guardians for minor or incapacitated adult children. Little sneak peek there, thanks Danny, on the other topics.

Again, because life is unpredictable and you just don’t know when your last day with us is going to be, it’s really important if you do have loved ones under your care, again, minor children or incapacitated adult children, to review that plan of guardianship regularly as well. So who’s going to have legal custody of those children or who’s going to have financial custody as well that can be addressed, you know, through some of the trust terms in your in your will in essence. Now on the next slide, we’ll introduce you to trusts as a concept.

And by the way, you know, we’re covering a lot of ground in today’s presentation, but if you want more detail on these concepts, I invite you to check out our estate planning one zero one webinar that we have available on our website in our YouTube channel, savantwealth.com. It’s our website. But a trust is a legal instrument that also holds assets not only during your lifetime, but can distribute those assets post death. And revocable living trusts are put in place primarily for probate avoidance. That’s one of the big benefits. So with a revocable living trust, you can change the document during your lifetime at any time. It’s amendable, revocable, changeable, but assets titled to the trust itself, those assets bypass or avoid probate upon your passing because the trustee of your trust, the named fiduciary, has the automatic legal authority to take title to the assets and distribute them, in accordance with what your trust actually says.

Now we talked a little bit about executors.

Being an executor is a is a short-term job, and that’s subjective. Right? Two months versus twelve months, that can seem like a long time period. But, the executor’s job ends at a certain period of time, right, when the state assets are distributed. A trustee’s job can continue indefinitely depending on the design of your estate plan. So I think it’s really important to keep in mind that, the relationship that your trustee is going to have with your beneficiaries, those that are going to receive financial benefit from your trust, can continue well after you’re gone. So it’s good to think about, again, the right people in the driver’s seat there, and that’s something that you can discuss, what your options are.

It’s unique to every individual. And so what are some of the other duties that trustees have on our next slide? Do you have that ongoing relationship with beneficiaries?

When you pass away, your revocable living trust becomes irrevocable and it will have its own tax identification number.

And there’s ongoing income tax filing that have to be done by your trustee.

I mentioned this, your trustee is a fiduciary, so they have to act in the best interest of your named beneficiaries, and they have a duty to monitor their financial condition, right, in in relation to the terms of your trust. So how can these monies be held and distributed? Making sure they’re adequately meeting the needs of your loved ones, whether that be your spouse, whether that be your children, or other people that are important to you. They’re going to be in charge of, determining if a requested distribution from the beneficiary is appropriate or reasonable under those, again, the standard that you set forth in your trust.
And then in most states, the trustee is also responsible for providing annual trust accountings to the beneficiary. So, you know, a list of the assets, the disbursements. It can be it can be a heavy lift, and this gets in the theme of the right people that you can name. So one thing to consider is a professional trustee.

Right? Just depending on your circumstances. The you know, the volume of wealth that you have, the structure, because being a trustee is a little bit of a thankless job. And, you know, there is work and it can be intimidating.

So, you know, it’s good to speak with your financial advisor about options when it comes to naming fiduciaries.

Okay, on our next slide, these are just some snapshots of some of the tax filings. The ten forty one is the annual trust income tax filing that the trustee has to file on behalf of the irrevocable trust.
And we get a lot of questions about tax. So, when you think about, you know, taxes, there’s income taxes. So taxes on interest, dividends, capital gains, rate over time in an investment portfolio, for example. But then there are also transfer taxes to consider. So estate taxes. That’s what I’m speaking about from a transfer tax standpoint. And, right now, in twenty six, each individual taxpayer has a fifteen million dollar federal estate tax exemption.

However, you might live in a state like, Massachusetts that has a two million dollar state estate tax exemption, or Illinois, for example, that has a four million dollar state estate tax exemption.
So, once you have a good foundation in place from a document standpoint, you have the right people named that are going to handle, the financial aspects, the right structures that protect your loved ones. It’s also important to think about tax planning, not only income tax planning, but estate tax planning. So keep that in mind. And if you are making gifts during your lifetime, important to remember you have to file a gift tax return. That’s tip number two.

Right? So if you gift more than nineteen thousand dollars a year to any one individual, gift recipient or donor, you do have to file technically a form seven zero nine, a gift tax return.
And that doesn’t mean gift tax is due at that time the gift is made. You just simply are using up your lifetime exemption. Again, fifteen million dollars per person. It just reduces the amount available when you pass away against the value of your estate.

So if you are making gifts and they’re taxable gifts that require this this gift tax return that I’m referencing, it’s important to keep those on file. Right? We talked about the importance of providing your healthcare power of attorneys to your doctors and those named individuals. Really, really important to give your financial advisor a copy of your gift tax returns, your, you know, your CPA would have them, but also make them available to your trustees and executors in the future.

That’s something that gets overlooked. It can have implications if you have significant wealth or even live in one of those states with a low estate tax threshold. We don’t have it listed on the screen, but, when you pass away, if your estate exceeds the federal exemption, and, again, a state, exemption, an estate tax return can be required.

And that form is called the seven zero six or seven zero six. Think six feet underground. That’s how you can remember the difference between seven zero six or seven zero nine for gift tax returns. The seven zero six is filed after your death.

But, essentially, if, you know, if you’re a married couple and, you know, you we’re at the first step, we might want to explore doing what’s called a portability file to preserve that unused fifteen million dollar federal estate tax exemption. Again, it depends on the design parameters of your estate plan. So these are introductory concepts, but, I, you know, think it’s the next slide, Danny. I want to show the, our, estate and trust administrator’s guide.

One of the net bet, I would say, biggest gifts that you can give to your loved ones is just the gift of being organized, right, and documenting your wishes, making sure your estate documents are accessible.
So when you’re when you’re filing, we have those gift tax returns, you know, making portability decisions, you know, just keeping an inventory of your assets. That that’s going to make your executor and future trustee’s job much, much easier.

So Savant has a form and we can make this available to all of those that have registered for today’s webinar called the estate and trust administrator’s guide. It’s a form that allows you to capture other important information that’s not contained in the legal documents themselves, like who to contact if something happens to you under a health emergency stand or even post death. Where are important documents located? The name of your attorney, your financial advisor, your CPA, your insurance agent, your landscaper, right? There’s a lot of people that play a role in your life and you know those people and those players much, much better than your children do or your brother or sister, right, depending on your situation, who’s going to help administer your estate. So getting organized is a fantastic idea.
Get a fireproof safe to keep at home.

You know, make sure your important documents are in the fireproof safe, make sure your named executors and trustees have a key or the combination to get in, that’s another tip.

And, know, it doesn’t necessarily mean you have to disclose the value of your financial assets, but I think it is good to just let those people you’ve named know that they will have a role to play and who to contact when you pass away, because you might not always want to disclose the nature of your wealth that can have other unintended consequences. But when people start taking a more proactive role in your financial life, maybe your children, start to attend meetings with your financial adviser, you know, they start stepping into those agent roles that we talked about earlier.

You know, at that point in time, it’s going to become important to share with them more of the intimate details of your finances so they can make the best decisions and continue, you know, with your financial plan that you put in place.

So on the next slide, earlier I talked about reviewing your estate plan every three to five years at minimum.

There’s also key life events that can occur and also situations that might require more specialized or sophisticated estate planning, right? Because if you did your plan twenty five years ago, right, a lot can change in your life in twenty five years.

Your children, grandchildren, divorces unfortunately, right, blended family situations, just changes in your overall net worth profile. So there’s three there’s a there’s a there’s a number of situations on screen, but three I just really want to highlight.

A big one is special needs planning. Right, if you have a child who has a disability, you want to make sure that you have the right structure in place to take care of them after you’re gone. Danny spoke a lot about self care and planning for your own care, but he also touched on making sure you have the right plan in place to care for those that you are caring for. And that’s a really big area, special needs planning that needs particular attention.

You want to work with an attorney that specializes in that type of planning, because often we’re planning for the interaction of Medicaid, or other state needs based benefits for those type of individuals. Another, big one is, for business owners. Right? If you if you are operating a business and you don’t have a business succession plan or at least a structure in place for the continuity or potential sale of your business after you’re no longer with us, you’re going to be in trouble.

So there’s a lot of special decisions and considerations that go into planning for a business because you might not necessarily want your heirs, for example, to be the ones running the business. Right? And you might be in business with others. So making sure that you’re on the same page with any business partners or shareholders, or other constituents, really, really important.

You need coordination, write special provisions for the business. And then, blended families is the last one I’ll touch on.

Very, very important, that you are on the same page with your new spouse because oftentimes, it depends on when you’re married, how old your existing children are, but oftentimes, there’s special planning provisions to make sure that, each of the respective spouses’ loved ones are taken care of at death with the appropriate amounts and protected and appropriate structure. So, again, your mileage may vary, but really important to do the right and appropriate planning based on your situation. So these are again, are introductory topics to think about, get you started, review your estate plan with your financial advisor, with your attorney, make sure everything’s appropriate, at bare minimum, make sure the right people are named in the documents that are going to be the appropriate people to help with unforeseen circumstances. On our remaining slides, Danny, just a couple of thoughts on what to do after you experience a loss, a spouse, a parent, other loved one.

I mean, the first thing to do is just slow down and spend time with your family members and celebrate the life of that person that’s no longer with us. Rarely do financial transactions need to occur right away.
You know, there’s a process for changing title on assets and settling outstanding debts for a decedent. So I just want to underscore the importance of just spending that time getting through the grieving process and really celebrating the life of that that loved one that you have, because, you’re going to have help. You are going to have help from your financial adviser, from your attorney, from your accountant to navigate the financial considerations and property transactions post death. So on the next slide, these are some practical tips, again because there’s a process involved. We talked about the probate process, how assets pass earlier, you know, the advantages of trusts. But if you find yourself serving as an executor or trustee, family harmony is often something that’s really important to promote.

So, your first call should be to your parent’s financial advisor, whomever that loved one is that you lost, and their attorney. And then after you have, your bearings straight, you’ve identified their financial assets, what they own, think it’s important just to keep beneficiaries and other loved ones up to date on what’s going on. Again, you don’t have to share all intimate details, but one thing that can cause conflict is uncertainty and silence. So have that regular meeting.

Make time for it. Explain what’s happening. These are just tips. And if you do find yourself in conflict, there are mechanisms to resolve conflicts, you know, mediation services, arbitration.

We want to try to avoid those if we can. So back to you as the plan creator. Right? It’s important to make sure that your plan has the right structure to avoid any potential conflicts that you foresee. Right? Ambiguity is the enemy. Providing certainty in your plan on how your assets are distributed and what your wishes are can go a long way in avoiding these family conflicts.
So last couple slides, Danny.

Again, you maybe you find yourself serving as executor or trustee. You’ve just lost a parent. It’s a good time for you as the inheritor of wealth to review the terms of your own estate plan and make updates. You know, we talked we talked about estate tax issues earlier, but, if you receive an inheritance, that could dramatically change your net worth picture, right, and expose you to estate tax now that you weren’t necessarily planning for. You have the right structures in place.

The people in your documents that you named, are they the right people now? Did you name a parent as your trustee or executor that you’ve now lost?

So oftentimes, you know, it’s top of mind when you lose a loved one because you’re dealing with the settlement of their estate. Good time to review your own estate plan and make sure your financial affairs and estate planning matters are at all.

And then, on the last slide, we like to end with this, illustration, our road to an ideal estate plan. There’s a lot of bumps in in the road of your financial life, But, again, there are critical life events that I think really do necessitate a review of your own documents and situation. We covered a couple of them, you know, loss of a parent or other loved one, a marriage, a divorce, birth of a grandchild, change in net worth, change in in state domicile. So just keep that in mind.

Once you get your estate plan in place, the exercise is not over. We want to continuously evaluate your estate planning documents themselves and just make sure that everything is working as you intend.
Sure. Yes. And I’m going to go ahead, and we will give everyone the opportunity to click the link in the chat to schedule a free fifteen minute introductory call with one of our team members.
And, you know, as well, if you have a question for us that we don’t, we aren’t able to answer on this webinar, then certainly you can make an inquiry there as well. I yeah. As always, Dom, with our calls, I took a page of notes. Thank you.

And just a couple of highlights as we give people a time to click on that link. You know, I wrote down the importance of sharing your documents and your plan, not only with the people who are named specifically and those to carry out your wishes, but also important people like your medical professionals, the gift of being organized. And if you would like us to share with you Savant’s estate and trust administrators guide, please note that whether it’s in the q and a or in the link. And that, you know, doing estate planning is a way to maintain privacy while also giving you more control, you know, providing not only for your own care, but also those that those you leave behind. And finally, check your documents. You know, who is named, you know, have you moved, you know, and after a loss, slow down, communicate clearly and regularly, and keep notes.

So with that, we’re going to open it up. Yeah. I believe we have time for just a few questions. And, Dom, I have one in in following up. You mentioned taxes in the and I’ll take it off screen share here so we can see each other.

You know, a question in the chat is, do my heirs have to pay income tax on their inheritance?

I mean, this is a fantastic question, and I’ll give you the answer that that most estate planners do. It depends. It really depends on the types of assets that are inherited. So we spoke a little bit about the differences between estate and income tax.

Estate is the Tax is the transfer on wealth. Anything passed below the federal or state exemptions is estate tax free. But income taxes can look different depending on the type of asset you inherit. For example, if you inherit an IRA, withdrawals from that IRA in your hands as the beneficiary, those are taxed as ordinary income, right, in the year that you receive those distributions.

Whereas a capital gain asset, right, there might be no tax because, at death, if that asset was included in the estate of the person who owned it, there’s a step up and reset of the cost basis. So it’s really important, you know, if you do inherit wealth, sit down with your financial adviser, understand the tax attributes of the dollars that you’ve inherited so you can come up with a tax optimized withdrawal and investment plan. Realize. Danny, I’m going to throw a question to you.

It’s like there’s a lot popping up here, and I and I wish we had some more time.

But we will, you know, we will circle back with those that we can’t answer. Are there any steps we can take today to improve our health span?

So I don’t is that hitting the gym? Do you have a do you have anything you can share with us on that?

Well, yeah. I should probably do more of that and, you know, setting aside many of the podcasts that people could find online.

And, again, HealthSpan is the number of years we live in good health. The health, the first thing to do is to consult with your doctor regularly. So go to those annual appointments and actually follow your health care provider’s advice. So that’s something that you know, it’s like having the estate plan that you don’t make accessible to the people who are named them and the people who need to use those to rely on your instructions.

It’s the same thing. So number one is go to the doctor and follow their advice or a nurse and follow what they say. But a lot of what we’re seeing in the health and longevity space, both from medical professionals and public health experts, are really three things, sleep, movement, and nutrition. Maximize sleep quality.

Seven to nine hours, and the older you are, the more sleep you really need. It helps clean out those tau tangles and plaques in the brain in your brain. You know, as we use our brains throughout the day, you know, we use up a lot of our energy, and that creates some waste in the brain. So sleep is the, you know, nightly trash service that, you know, gets rid of, you know, all the junk and, you know, and helps you start the day fresh.

So often when you have a poor night of sleep and you don’t feel great, you know, it’s because of that process not having time to complete. Second is to incorporate movement into your day, even walks. So we’re not expecting it you know, anyone to go out and run marathons, but even a walk, especially after a meal, can aid in metabolism. It can reduce insulin spikes.

And then three is minimizing sweets and processed foods in your diet. This is a good time of year.

There are no major holidays coming up.

You know, right now. So especially a great time to minimize those sweets and processed foods.

Well, those are great tips. Well, thank you everyone for attending today’s live webinar. We really appreciate it, and, we’ll see you on the next one.

Thank you very much.

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