122. Wills and Trusts After Divorce with Ted Schneck

Jun 3

[Unedited transcript]
Ted - v. 2
[00:00:00]
[00:00:00] Meg: Hello everyone and welcome back to the podcast. I am excited today to have a guest on to talk to us about estate planning, essentially wills and trust and power of attorneys. Maybe you've never heard of estate planning. Maybe you have. Either way, it's a topic that I have not brought up yet on the podcast and there's actually some really important implications around estate planning during and after divorce and I wanted to get you all a lot more information so that if you have questions or if you haven't even thought of any questions, we're going to get you some answers so that you know what you need to address during and after divorce.
[00:00:42] Meg: I have a guest. I have Ted Schneck on. Hi, Ted. Welcome.
[00:00:47] Ted: Thank you.
[00:00:48] Meg: I am thrilled to bring him on. He is part of the collaborative community that's here in Washington State that I am also a part of, and he specializes in [00:01:00] estate planning. Why don't you give us a definition, Ted, What is estate planning?
[00:01:04] Ted: So estate planning, part of the reason why most people don't think about it- it's kind of a crazy topic to be talking about people because you're talking about what happens when they die.
[00:01:13] Ted: So a lot of people don't necessarily like talking about it because none of us want it to happen.
[00:01:20] Ted: But the truth is it's inevitable for all of us. and what estate planning is doing, there's some elements of sort of end of life type stuff, and preparing for that. But really, what a state planning is doing is putting together what happens to everything that you've accumulated, over the course of your life.
[00:01:38] Ted: And making sure that the people in your life who you need to take care of are taken care of. So really what you're doing, the main core of it obviously is your will and the will is very simply a statement of what you want to do with your assets, with your property that you've accumulated .
[00:01:55] Ted: Often you want to set things up to
[00:01:58] Ted: make sure
[00:01:58] Ted: that your children are cared [00:02:00] for, family members, gifts if
[00:02:01] Ted: you want
[00:02:02] Ted: to give them, things like that. So that's what we do, we take people have them look forward to what do you want to have happen after.
[00:02:10] Meg: Wills is probably the one that most people
[00:02:13] Meg: are
[00:02:13] Meg: familiar with.
[00:02:15] Ted: But there's a ton of different things involved. My
[00:02:17] Ted: website
[00:02:17] Ted: Seattle Wills and Trusts is because a lot of, a lot of planning around it involves creating these sort of trust funds, that will allow you to control how things work and where
[00:02:31] Ted: things go.
[00:02:32] Ted: Wills is just sort of the most common, you know, you see the reading of the will in the, in the movies and things like that. But there's a lot of different things. There's trusts. The other ones that are that are very important are powers of attorney. You mentioned earlier.
[00:02:46] Ted: And that's not really for after death.
[00:02:48] Ted: That's basically what happens later in your life. If you're unable to care for yourself or can't make decisions, usually around
[00:02:55] Ted: health care finances and sort of how do we set things up so that other [00:03:00] people can help you take
[00:03:01] Ted: care of your affairs at that time.
[00:03:03] Meg: And so why is it important for us to start addressing these estate documents during divorce.
[00:03:12] Ted: Well, so one of the biggest sort of tenets of trust in the states and wills and trusts is that whenever there is a major change in circumstances, life change, you want to stop and you want to think, do the documents that I have, or if I don't have any documents, The fact that I don't have any documents, does it do what I want it to do?
[00:03:33] Ted: Does it actually, , make sure that the people who need to be taken care of are taken care of? Make sure that I keep people who I want to be helping me or helping me? Things
[00:03:41] Ted: like that.
[00:03:42] Ted: And if anything is a major change in circumstances, getting a divorce is, is just that.
[00:03:48] Ted: When I was thinking through this, the original state of the marriage, you know, often what they do is what they call sweetheart wills. And, you know,
[00:03:57] Ted: I'm going to
[00:03:57] Ted: say his and hers, but it can be hers and [00:04:00] hers or his and his, , however it goes.
[00:04:01] Ted: usually says I, upon my death, everything goes to my spouse. And then your spouse says, and upon my death, everything goes to my other spouse. And it's wonderful because you trust that person and you know, that they're going to generally have sort of the same goals as you, if you have children together, you know, that they'll take care of the children,
[00:04:21] Ted: and so these sweetheart wills work great and they're Essentially most common when you're married, but now you're getting divorced and all of a sudden just saying, well, I give everything
[00:04:32] Ted: to her
[00:04:33] Ted: or I give everything
[00:04:34] Ted: to him doesn't work anymore and it's not going to work
[00:04:38] Ted: moving
[00:04:38] Ted: forward
[00:04:39] Meg: Because essentially can I just clarify if you had a will in place that said i'm going to give my partner Everything on on my death and nothing changes Like you don't
[00:04:53] Meg: change that.
[00:04:54] Meg: Does that
[00:04:55] Meg: mean that if you pass away, everything [00:05:00] still goes according to that will and would go to your ex?
[00:05:03] Ted: Well, actually not. Fortunately not. Okay. The state's interest in this and the laws that the state puts together are basically the state trying to say, you know, what do we think you would want to do?
[00:05:16] Ted: Okay. And
[00:05:16] Ted: so, for instance, if you don't have a will right now, the state's simply going to say, say, this is how we assume you wanted it to go.
[00:05:23] Ted: And we're going to divide it up among, you know, your spouse, your children, parents, people like that. Okay, but the state also assumes, and rightly so, that if you've divorced somebody and you've got a will that says, , I give all of my assets to my spouse, that you probably don't want to do that. And so the state , has, issued a law.
[00:05:46] Ted: that basically says, , If you have a will and it's this sweetheart will I give to my spouse all of all of my assets we're
[00:05:52] Ted: gonna avoid
[00:05:53] Ted: that. Okay, we're not gonna avoid the will the will is just fine But we're gonna we're gonna take that section and [00:06:00] carve it out And the way they do that is they basically declare, and , it's a strange way of doing it, but it works really neatly.
[00:06:06] Ted: We're going to pretend as though the divorced spouse pre deceased you, died before you. And so what happens in a will is, you know, if I say, I'm going to give 10, 000
[00:06:18] Ted: to my
[00:06:18] Ted: friend, Joe, but Joe is dead. Well, there's nobody to give that money to. So you
[00:06:24] Ted: can
[00:06:24] Ted: either have a backup. Plan in the will
[00:06:27] Ted: most wills
[00:06:27] Ted: will have sort of an alternate and it will fall to the alternate or if there's no alternate It basically just comes out of there and gets thrown into the general pile.
[00:06:36] Ted: , the same thing happens with a former spouse. So Upon the the signing of your divorce decree. You don't have to worry that that oh my god I said
[00:06:45] Ted: that my spouse
[00:06:46] Ted: gets all my money, you know, that's not going to happen , the the state is going to treat it as though that spouse pre deceased ,
[00:06:54] Ted: and then if you have a backup, and this is this is where you've got to be careful though, because then if you have a [00:07:00] backup set up, it will fall through to the backup plan. Okay, you really want to take a look at what some of those backups are. Let's say that that You know, you're really close to your spouse's family and you said, Okay, and if it doesn't go to my spouse, then I'm going to give half of it to my spouse's brother or something like that.
[00:07:19] Ted: Or if your spouse had Children from a previous marriage, I'm going to give this much to my stepchildren. Okay. And all of these, the law that says the pre deceased part, It only applies to the spouse. So if you've got family members or anybody else, the same thing, you know, if you say that the executor of my will is my brother in law because, you know, or my mother in law, you know, is going to serve this role or something like that, that's completely unchanged.
[00:07:50] Ted: So these are the types of things you just
[00:07:52] Ted: have to
[00:07:52] Ted: look through and get a sense of, do I really want it to be set up
[00:07:56] Ted: this way
[00:07:56] Ted: or, or not, because those type things are going to [00:08:00] apply and you can get some surprising results.
[00:08:02] Meg: Who would have thought of that, , when you're making these documents , so many people that I've heard of, it's the birth of their first child that kind of motivates them to create these documents and everybody's excited about the baby coming and yeah, writing down Uncles and aunts into
[00:08:20] Meg: these documents makes a lot
[00:08:21] Meg: of sense.
[00:08:22] ,
[00:08:22] Ted: it also gets interesting.
[00:08:23] Ted: So, your spouse is cut out of the will, essentially. you've also got to consider, it gets really interesting. Part of what I like about doing wills and trusts is that it's this kind of about, you know, well, we want this to be set up this way, but we want it to happen that way.
[00:08:38] Ted: So let's say you have young children. . and your fallback is, okay, it's not going to go to my spouse. It's all of my assets are going to go to my young children. Okay, well, that's great, except who's the guardian of your young children? Your former spouse. , so you're no longer around. The children get all of these funds, but it's the spouse who controls [00:09:00] all of the funds that belong to the children.
[00:09:02] Ted: And he, she might do anything with them.
[00:09:07] Ted: So another issue that
[00:09:08] Ted: comes up, it's similar but a separate, issue. So you've got this one issue where if you give the funds to your children that the spouse doesn't necessarily misuse the funds in a way that you don't want them to be used, you want to make sure that they're there.
[00:09:20] Ted: another issue that comes up often, , let's say somebody new is coming into your life. Okay. And you create one of these, wills where basically you say, great, I'm in love with this person. I want
[00:09:32] Ted: this person
[00:09:32] Ted: to have all of my assets. You give it to them. And then unfortunately you pass away.
[00:09:37] Ted: Okay, we'll, and we'll circle back for a few minutes later on, but I, but I just want to kind of plant a seed right now. you've got to beware because now, you have given all of your money away to somebody who is not the parent of your children, who is the step parent of your children. And if that person gets remarried, if that person has other children, things like that, all of that money is now in their [00:10:00] control.
[00:10:00] Ted: And so they, could then put in their will, I give all of my money.
[00:10:05] Ted: which they now
[00:10:06] Ted: have because you've given it to them, to my children, my birth children, and I give none of the money to the stepchildren. So you've got to be very careful
[00:10:16] Ted: to make sure
[00:10:17] Ted: that you've got everything set up in a way that the people who you care about are protected.
[00:10:22] Ted: There are other situations where, sometimes in a will you'll have, a brother or a sister who you're caring for, or, an elderly parent or somebody like that. Well, if, the money goes to your children and your former spouse is taking care of it, well, when it was your money, you would use it for
[00:10:39] Ted: the
[00:10:39] Ted: children and you would use it for care of the of your brother, your step parent, your parent you just have to make sure that that everything is set up so that everybody you want to is taken care of. And that's really what it
[00:10:51] Ted: all comes
[00:10:51] Ted: down to.
[00:10:52] Meg: comes
[00:10:52] Meg: up for me is just thinking that
[00:10:54] Meg: there's so many unique circumstances that there's [00:11:00] so much creativity essentially that can come into it so that you can have it look exactly how you want it to look like.
[00:11:07] Meg: It doesn't have to be cookie cutter there. You don't have to, just follow a certain
[00:11:14] Meg: recipe.
[00:11:15] Meg: You can
[00:11:15] Meg: actually craft it depending on what your family looks like.
[00:11:19] Ted: Yeah, I always I always tell people, you know, the cool part about a will will is essentially a contract with yourself. You know, you're, you're telling your future self, unfortunately you won't be around to see what happens,
[00:11:30] Ted: but you're
[00:11:31] Ted: telling your future self , how you want things to be handled.
[00:11:34] Ted: I joke when I'm telling people about, you know, if you wanted to, to give all of your money to your dog, you can do it. You know, if
[00:11:41] Ted: you want
[00:11:41] Ted: to give all your money to charity, you
[00:11:43] Ted: can do
[00:11:43] Ted: it. If you want to burn it. In a big fire, you could do it. . You get to decide, but great power comes great responsibility.
[00:11:51] Ted: you need to, to stop and think and make sure, cause you know, there are people that you care about. And you need to make sure that they are taken care [00:12:00] of when, when
[00:12:01] Ted: it comes
[00:12:01] Ted: up another, another example.
[00:12:03] Ted: So you've got a
[00:12:03] Ted: 12,
[00:12:04] Ted: year old and a 10 year old or something like that. and you give them all your money essentially, because you want to make sure they're
[00:12:10] Ted: taken care
[00:12:11] Ted: of. And they've got a guardian in place who will, Buy what they need food, medical care, education, health, education, welfare, things
[00:12:18] Ted: like that.
[00:12:19] Ted: by law, when they
[00:12:20] Ted: turn, and
[00:12:21] Ted: this isn't really a divorce thing,
[00:12:22] Ted: but this
[00:12:22] Ted: is something that, that
[00:12:23] Ted: you need
[00:12:24] Ted: to consider anytime you have young children, when the children turn 18, they're now legally of age, and they get all of the
[00:12:32] Ted: assets. Okay, so if you have
[00:12:34] Ted: 000 fund
[00:12:38] Ted: that belongs to the children that a guardian's been taking care of on their 18th birthday, they own
[00:12:43] Ted: all of it.
[00:12:44] Ted: I always use the expression, you need a will, you know, you don't have to have a will, the state will make sure kind of that
[00:12:50] Ted: your kids
[00:12:50] Ted: get things and things like that, but on their 18th birthday, they get everything.
[00:12:54] Ted: Okay, and we have a 17 year old in the house, and there is no way I would want to put a million dollars in his bank [00:13:00] account on his 18th birthday, because it's not going to go well,
[00:13:03] Ted: I mean,
[00:13:04] Meg: That's
[00:13:05] Ted: so,
[00:13:05] Ted: you know, so, so
[00:13:07] Ted: anytime
[00:13:08] Ted: you have a have a big change in circumstance, and like I said, Divorce is it
[00:13:13] Ted: you want to sit
[00:13:14] Ted: down and you want to understand.
[00:13:15] Ted: Okay, if I die and we're all going to do it someday. what's actually going to happen
[00:13:21] Ted: And how can I set up this will in these documents in order to make it happen the way I want to the way it needs to happen
[00:13:30] Meg: Yeah.
[00:13:30] Ted: essentially.
[00:13:31] Meg: So just just talk us through that one example just a little bit more.
[00:13:36] Meg: How do we avoid. Our 18 year old getting that account when that's probably not what
[00:13:43] Meg: we really want
[00:13:44] Meg: We want them to be able to pay for college we want them to be able to, make a move but , we don't want them to burn
[00:13:50] Meg: it
[00:13:51] Meg: in their first, , three years.
[00:13:53] Ted: This
[00:13:53] Ted: is
[00:13:53] Ted: why I
[00:13:54] Ted: call it wills and trusts. Okay, because the trust is the part that takes
[00:13:58] Ted: care of it.
[00:13:58] Ted: And so [00:14:00] very often , it's relatively simple. but it's, it's very common to build into the will sort of an, an age trust, a child's trust. which basically says, all of my assets or a million dollars or whatever, number, however you want goes into a trust for the benefit of
[00:14:17] Ted: my
[00:14:17] Ted: children.
[00:14:18] Ted: . And the trust, you have a trustee, could be a friend, somebody,
[00:14:21] Ted: a family member, somebody who you
[00:14:22] Ted: trust, who takes care of this money and you give them instructions that basically says, says, I want this money to be distributed for health, education and welfare.
[00:14:32] Ted: Okay. If they want to go to school, I want them to have money for that. If they need it for their health, for day to day expenses, whatever, whatever they need, you can put in, you know, I want them to travel and I want them to be able to buy gifts and do all sorts of stuff, but you give the instructions and then what you usually do is you put a couple of age brackets in and you say, on their 20th birthday, I want them to get
[00:14:54] Ted: a quarter of what's in there can be anything. I want them to get 1, 000. I want
[00:14:59] Ted: them to
[00:14:59] Ted: get a [00:15:00] quarter, you know, on their 25th birthday, they're going to get a different another portion on their 30th birthday. They get another portion or you could say, you know, if they get married, you can set up any sort of rules that you want, but that's, that's kind of the common way to do it.
[00:15:14] Ted: You set up
[00:15:14] Ted: a trust
[00:15:15] Ted: with somebody who you trust to, to manage it for them and just, you know, make them stay responsible. The flip side, I was talking a little bit earlier about, so now you get remarried and you want to take care of your spouse.
[00:15:28] Ted: A trust that's a surviving spouse
[00:15:31] Ted: that says, I give to my.
[00:15:34] Ted: Husband my assets in trust and they're going to be held in trust and the trustee, who's one of her relatives will make sure for as long as he's alive to
[00:15:46] Ted: give
[00:15:46] Ted: him the money that he needs for his welfare for this, for that, for that, but upon his death. My death spouse's death all of the money in that fund immediately goes to my children. So [00:16:00] this way I can't say in my will. Oh, thanks for the thanks for the two million dollars I'm gonna go and you know pass it along to
[00:16:07] Ted: my friend harry. It's like no
[00:16:10] Ted: It goes, it goes back, you know, so she controls where it is. This, you, you can do things like this. You can set things up where you're giving something.
[00:16:19] Ted: You're taking care of the people who you need to take care of, but at the same time you're, you're maintaining control over So these are just the types of things that we play with
[00:16:28] Meg: It's just so creative and so unique for each family. I love that so much. Another question that I had, if I'm going through a divorce.
[00:16:37] Meg: Should
[00:16:38] Meg: my divorce attorney be bringing up all this estate planning as part of the divorce process?
[00:16:44] Ted: You know, should they be bringing it up? 100%. They really should. There's there. There are there are issues that come up. do
[00:16:52] Ted: they bring it up? They don't think about it. Most
[00:16:55] Ted: most
[00:16:55] Ted: people don't, especially if you're a younger couple, you know, if you're more senior, [00:17:00] then, you know, you start thinking about these things.
[00:17:02] Ted: If you're
[00:17:02] Ted: a younger couple, it's like, well, we don't really, you know, we don't need to worry about this. but it's, it's interesting because there are certain quirks that even happen in the process. So, you know, that, that usually you don't need to be aware of, but that, you should be aware of, which is even planning during the divorce process.
[00:17:22] Ted: So, you know, when you're in the middle of a divorce, Then,
[00:17:27] Ted: God forbid
[00:17:28] Ted: something happens
[00:17:28] Ted: to you.
[00:17:28] Ted: and like I said, it's
[00:17:29] Ted: a, it's
[00:17:29] Ted: a weird business to be in because you're, you're talking to people about their own death, which is just not that fun necessarily. But, you know, if something happens to you, what happens?
[00:17:40] Ted: Okay. And so there's, there are a couple
[00:17:42] Ted: of like
[00:17:43] Ted: interesting quirks. One of them is that the law that I was telling you about before that says that if you have a sweetheart will. And all my money goes to my spouse and you enter your divorce decree. The spouse is considered pre deceased for the will.
[00:17:59] Ted: If [00:18:00] it's the day before the entry
[00:18:02] Ted: of
[00:18:02] Ted: the divorce decree, the law doesn't apply at all. Okay. So, so if you have a million dollars. That you're giving away in your will and it
[00:18:11] Ted: says, I
[00:18:11] Ted: give it to my spouse if, if something happens to you the week before your divorce decree is signed, sorry about that.
[00:18:20] Ted: All of your goes to your almost former spouse. I'm going to back up half a second because because I'm going to say one thing.
[00:18:27] Ted: Okay, you know, I'm going to do that. I'm going to do the lawyer thing right now, which is that nothing that I say is legal advice. Okay. So anybody who's listening to this. By all means, please do not base your legal advice on on this. every single person's situation is different. The cases are different.
[00:18:43] Ted: So you need to go and hire
[00:18:46] Ted: somebody, ask your attorney,
[00:18:47] Ted: things like that.
[00:18:48] Ted: I just
[00:18:48] Ted: want to make sure from from my sake. but
[00:18:52] Ted: Along those
[00:18:52] Ted: lines, this is sort of
[00:18:53] Ted: meant to
[00:18:53] Ted: be a starting point. So you can sort of ask the questions and do it, but you know, you take a look and you, and a lot of [00:19:00] people have powers of attorney.
[00:19:01] Ted: And what that says is if I've, if I'm ever incapacitated, if I'm in a coma, if I get dementia and can't handle my affairs, then I want. This person to have full access to my bank accounts to, you know, make medical decisions for me, , health and finances are generally the two that we apply, same issue happens, the state will say that that provision that says, you know, if I am unable to manage my finances, I want my spouse to have full access
[00:19:32] Ted: to all
[00:19:33] Ted: of my accounts.
[00:19:34] Ted: The day after your divorce decree, the state says that doesn't apply because we're pretty sure that you didn't want that
[00:19:41] Ted: The week before
[00:19:44] Ted: hundred percent. You should always be thinking about, if something happens, is the right person listed as my power of attorney, you know, will the funds go to the right place? Another issue that comes up is beneficiary statements.
[00:19:58] Ted: So, my [00:20:00] 401k says, that upon my death, all of the funds goes to my wife. Well, if I'm getting divorced, okay, so state law says that anything in the state, which is basically, you know, transfer on death, you know, like bank accounts and
[00:20:17] Ted: things like
[00:20:17] Ted: that, your IRA, things like that, that also, Upon divorce, we'll clean, we'll clean that up.
[00:20:23] Ted: Interestingly, Washington state law is preempted by federal law. So wherever federal law applies, then, then that doesn't happen. And one weird situation where it applies is if you have
[00:20:36] Ted: a regular
[00:20:37] Ted: 401k.
[00:20:38] Ted: whoever's listed as the beneficiary gets it no matter what. So if you do not change your beneficiary designation and say, it's no longer my former spouse, it's my child, it's my brother, whatever, literally 100 percent of your 401k may just go to the former spouse,
[00:20:58] Ted: regardless of whether
[00:20:59] Ted: you had that intended or [00:21:00] not.
[00:21:00] Ted: These are just the types of things that you want to spend some time thinking about at a minimum.
[00:21:04] Ted: And sadly, from your point before, is that, that, you know, like I said, most family lawyers don't think about this. And so your family lawyer is not going to pull you aside and say, great, in today's session, we're now going to talk about, you know, what are your beneficiary statements like?
[00:21:20] Ted: What are your, you know, it's like, like, yeah, you're kind of on your own. You can ask them about it. And hopefully they'll have some answers for you. but otherwise just know in the back of your head that you need to take a look
[00:21:31] Ted: at these things.
[00:21:32] Meg: It's one of those areas that I think,
[00:21:34] Meg: how
[00:21:34] Meg: would we even know to think about it? how would we even know to ask those questions? But I can see how
[00:21:40] Meg: just a short
[00:21:41] Meg: checklist of,, check your beneficiary on your savings account, check your beneficiary on your IRA, right? Check your beneficiary in, you know, your brokerage account or , like,
[00:21:53] Meg: just these little places, , let's
[00:21:55] Meg: clean that up.
[00:21:55] Meg: And then I also want to just put out there, You know, I'm
[00:21:59] Meg: sure there's
[00:21:59] Meg: [00:22:00] some listeners who are like, I'm fine. If my ex gets it,
[00:22:04] Meg: my
[00:22:05] Meg: ex is going to have the kids. I totally trust him. Like, I don't want to be married to them, but I totally
[00:22:10] Meg: trust
[00:22:11] Meg: them to take care of the kids. It's totally fine. And that's like, okay.
[00:22:14] Ted: now. You know, that's, that's a, that's a flip side as well. You
[00:22:17] Ted: know,
[00:22:17] Ted: you may be, you know, we're divorced, but we're the best of friends. and I want to take care of that person. You know, interestingly, state law is going to cut that person out
[00:22:26] Meg: Oh, isn't that interesting?
[00:22:28] Ted: You can go in and you could say, I want to give, you know, half of my estate to my former spouse.
[00:22:35] Ted: You can
[00:22:36] Ted: override that.
[00:22:36] Ted: I think the whole point is just to be very conscious you know, make sure that what you're doing you're doing because you want to do it
[00:22:44] Ted: and not because
[00:22:45] Ted: you accidentally forgot to change
[00:22:47] Meg: Mm hmm.
[00:22:48] Meg: I can see too, I mean, you've given us a few examples, but how things
[00:22:52] Meg: just get
[00:22:52] Meg: ever so much more complicated when there's second marriages that come into it. And we have step [00:23:00] kids and we have our kids and,
[00:23:02] Meg: , there's a range of ages and there's just a lot of different pieces.
[00:23:07] Ted: Yeah.
[00:23:07] Ted: The thing that I see, you're in love and when it's working, it's it's easy. It's wonderful. You know, everything is everything is smooth. but you do. Unfortunately, it's like,
[00:23:17] Ted: I hate having to be the person who you.
[00:23:19] Ted: sort of cautions you about things because it's so nice to be, you meet somebody new and it's wonderful and you're in love and, you know, but what happens, you know, are they going to take care of your children the same way that, you know, that you would have,
[00:23:34] Ted: if something happens
[00:23:35] Ted: and They get remarried and, you know, and start another family.
[00:23:39] Ted: Are they still going to take
[00:23:40] Ted: care of you? You know, you've
[00:23:42] Ted: got to, you've got to just make sure that the things that you
[00:23:44] Ted: care about are
[00:23:45] Ted: really taken care
[00:23:46] Ted: of.
[00:23:47] Meg: .
[00:23:47] Meg: And this seems like this is also a place where prenup agreements kind of interact with the estate planning.
[00:23:55] Ted: Very
[00:23:56] Ted: much so. And it's interesting. I just made it made a little note because I wanted, to mention some of it. [00:24:00] yeah, state planning, it's very interesting in the
[00:24:01] Ted: divorce context
[00:24:02] Ted: because
[00:24:03] Ted: you've got
[00:24:03] Ted: community property and separate property.
[00:24:05] Ted: and. You know, where you have, for instance, you know, this is another thing that I talk about when I'm when I'm writing wills
[00:24:12] Ted: for people
[00:24:13] Ted: is it's possible.
[00:24:15] Ted: It's very possible that sometimes you give away an asset that you don't have to give away.
[00:24:20] Ted: When somebody passes away. You have to look at what is the community and what is separate. Property. Okay. Community property. Obviously, everything that you've accumulated during the marriage and things
[00:24:32] Ted: like that.
[00:24:33] Ted: separate property or things that you
[00:24:34] Ted: had before
[00:24:35] Ted: the marriage inheritances and, but separate property sometimes gets commingled into community.
[00:24:41] Ted: when you pass away, the surviving spouse has an interest in the community. . Half of the community is going to belong to the
[00:24:49] Ted: surviving spouse.
[00:24:50] Ted: And in some cases, for instance, you know, real property, joint tenancy with, with rights of survivorship, the rights of survivorship part says [00:25:00] when one person dies, the other person owns the whole thing.
[00:25:03] Ted: And so, and so if you've got a piece of property that basically, you know, says,
[00:25:11] Ted: says
[00:25:11] Ted: upon my death. This property automatically transfers to the other person and you write in your will. I give my interest in that property to my sister or something like that. Well, you're interested in the property is nothing because that property is already transferred.
[00:25:27] Ted: The same thing with joint bank accounts.
[00:25:29] Ted: You know, the whole point
[00:25:31] Ted: of it is if one person dies, the other person has control over over the full account. And again, there's
[00:25:37] Ted: different rules that apply to different things. This is part of where I want to say, you know. Don't take this as legal advice.
[00:25:43] Ted: Just be
[00:25:44] Ted: just be aware that these things happen out there and that, you know, literally you might be giving away, you might
[00:25:52] Ted: be putting
[00:25:52] Ted: in your will something that you don't own because it, because it was part of the community and it was
[00:25:57] Ted: part of
[00:25:58] Ted: the other, the surviving [00:26:00] spouse's
[00:26:00] Ted: assets.
[00:26:01] Meg: Can I ask a clarifying question, though, on that, which is, it's, you still want that in your will, because it's In case the other person passes first, it will be your full property to then.
[00:26:15] Ted: That is wonderful.
[00:26:16] Ted: Yes,
[00:26:16] Ted: that is something that I that that I should have mentioned. You're absolutely right. You still want to because, your will is going to get read when you die. That could be,
[00:26:27] Ted: you
[00:26:27] Ted: know, 20 years from now, 50 years from now.
[00:26:29] Ted: Okay, we always I always tell people, try not to have a 50 year
[00:26:33] Ted: old will,
[00:26:34] Ted: it's probably not going to, you know, Probably not going to say the things that you, Oh, really? I, you know, I, I, I gave that to my friend, Billy, who I haven't seen in 40 years. That's awesome. You know, but, but you're right. Because you don't know what the situation is.
[00:26:49] Ted: Because if, if you're the surviving spouse. Then 100 percent of those assets belong to you. So you do want to mention it. The truth is that that in any well written will or actually in any will you [00:27:00] can't avoid it. there's something called the residual clause and what the residual clause says is is it's the everything else clause. So, you know, I give 5, 000 to my friend, so and so, 50, 000 to their 20, 000 to charity, and then the, then the residual, everything else after we're done giving away stuff, everything else goes. So if you don't mention, you know, Something, you know, Oh, I forgot to mention that bank account and actually because I didn't think
[00:27:30] Ted: it would
[00:27:30] Ted: be mine, but actually it's mine.
[00:27:32] Ted: Then it what it falls into is the everything else column and usually the everything else is I give everything else to my children or
[00:27:39] Ted: something like that.
[00:27:39] Ted: So that's that's basically how it applies the other way. And this is the other part that I wanted to mention about community property separate property because you mentioned prenups and
[00:27:48] Ted: things like that.
[00:27:49] Ted: prenups. Property settlement agreements, things, things like that that
[00:27:53] Ted: you get
[00:27:54] Ted: during the process. And this, these can be very valuable. you
[00:27:57] Ted: know, you can, you can sign a property settlement
[00:27:59] Ted: [00:28:00] agreement, especially
[00:28:00] Ted: My wife, Ariella does, does collaborative cases. And so they'll do a lot by contract outside of
[00:28:07] Ted: the
[00:28:08] Ted: divorce decree.
[00:28:08] Ted: So you can wait and have
[00:28:10] Ted: the divorce decree
[00:28:10] Ted: come down and the judge will say, okay, this asset belongs to party number 1. This asset belongs
[00:28:16] Ted: to party number
[00:28:17] Ted: 2 at that point. They're separate assets. You know, she owns hers. He
[00:28:21] Ted: owns his.
[00:28:22] Ted: We go our own way. Until then, there's this weird mix, but you can take a
[00:28:28] Ted: prenup or a postnup. You
[00:28:30] Ted: can take
[00:28:31] Ted: a,
[00:28:31] Ted: property settlement agreement and basically say, okay, we're going to decide that of the community property, this, this, this, and this is mine. And this, this, this, and this is yours. And once
[00:28:42] Ted: we've signed that agreement,
[00:28:43] Ted: now, interestingly, you don't have that issue. Okay, because now we know what's separate his separate hers separate one separate two
[00:28:53] Ted: You still have the
[00:28:54] Ted: issue.
[00:28:54] Ted: Of course, like I said before the the the gotcha issue Of you know, I still have a [00:29:00] sweetheart will so i've got mine and You know, he's got his But i've got this sweetheart will
[00:29:07] Ted: provision that
[00:29:07] Ted: says on my death everything goes to him and it's like oh, well, never mind. Like I said, these are just the things that, you know, you want to change your will.
[00:29:15] Ted: Unless they're your best friend, and you really want them to get everything afterwards. and even then you want to change it to explicitly say that you want to, but you want to make changes. You want to rethink through and then you want to do what you can. You can't always do everything until the divorce
[00:29:30] Ted: is final, but you
[00:29:31] Ted: want to do what you can to sort of define what's mine and what's theirs and get this separate.
[00:29:37] Ted: Otherwise, the community property can really throw a monkey wrench into. Into, you know, what you think was yours.
[00:29:43] Meg: So good,
[00:29:44] Meg: Ted.
[00:29:44] Meg: I think we planted a gazillion
[00:29:46] Meg: seeds in everybody's mind. And I want to give folks,
[00:29:50] Meg: kind of a pathway. I want to emphasize that you don't have to understand the form. that your will needs to be in or whether you [00:30:00] need a trust or whether you need a different kind of agreement, right?
[00:30:04] Meg: All you need to do is know what you want
[00:30:09] Meg: and in
[00:30:09] Meg: a , broad sense of it? Know what you want and then reach out to someone like Ted
[00:30:14] Meg: and
[00:30:14] Meg: describe to you, this is what I want. Can you help me make this happen? So, if, if what you want Using the great example you gave, if what you want is that, you have remarried, and you want to make sure that if you pass, your new spouse is taken care of, and that if they pass, or when they pass, then everything else goes back to your kids,
[00:30:41] Meg: that's all
[00:30:42] Meg: you have to tell Ted.
[00:30:43] Meg: and then he figures out the
[00:30:45] Meg: structure and
[00:30:45] Meg: how to,
[00:30:46] Meg: how to make it happen.
[00:30:48] Ted: Yeah, and keep and keep in mind, you know, the process doesn't need to be complicated.
[00:30:54] Ted: If you've got 50 million and own four companies and things like that, you want to hire a [00:31:00] very sophisticated estate planning attorney to help you manage everything. For most people, though, it can be pretty simple.
[00:31:06] Ted: Okay, you you come
[00:31:07] Ted: on in and we, and we put it together. I'm actually
[00:31:10] Ted: in the process,
[00:31:11] Ted: sometime in 2024, sometime this year I'm coming out with automated will building software that, that's
[00:31:17] Ted: gonna help
[00:31:18] Ted: people, that will allow you basically to come in and type in your situation and what you have and hit a button and out will come the will or
[00:31:27] Ted: you know, and you'll also
[00:31:29] Ted: have some access to me as well, but sort of, you know.
[00:31:31] Ted: Keep, keep your eyes out for that. but keep in mind that, that this is, it can
[00:31:37] Ted: be very straightforward.
[00:31:38] Ted: You don't need to make it very complex,
[00:31:40] Ted: Whenever I'm working with somebody, we'll sit down over, either over coffee or we'll sit on a call just like this and we'll talk about their situation and we'll just talk through some situations
[00:31:50] Ted: and I'll
[00:31:50] Ted: ask some questions and we'll gather
[00:31:52] Ted: some stuff.
[00:31:53] Ted: You don't have
[00:31:53] Ted: to sit
[00:31:54] Ted: there and go, Oh, I've
[00:31:55] Ted: got to
[00:31:56] Ted: understand everything before I go.
[00:31:57] Ted: It's like, come on in. We'll have some [00:32:00] conversations and I'll help you or any good, you know, wills and
[00:32:04] Ted: trust attorney will help you
[00:32:06] Ted: kind of understand what's available. And, How to do it.
[00:32:11] Meg: Yeah. I love that. Thank you so much, Ted. This, like, so much good information here. I hope everybody has some new ideas about how to approach wills and trusts and your whole estate planning to take care of the people in your life that are most important to you. And I really appreciate you sharing your expertise with our audience here today.
[00:32:33] Ted: Thank
[00:32:34] Ted: you, Meg. It's my pleasure. It's been fun
[00:32:35] Meg: Yeah. So you all, I will put Ted's website in our show notes so that you can go check it out It's Seattle wills and trust.
[00:32:43] Meg: com. but I'll link it in the show notes and, give him a call, have a, have a coffee chat and, and see how he can help you too. Thanks so much.
[00:32:53] Meg: And we will talk to you again next week. Bye now.

Divorce affects what will happen to your assets when you pass. You want to take care of your kids, and perhaps your new partner. But how can you make sure that happens once you’re gone?

Estate Planning attorney Ted Schneck visits to share what we should know.

We cover:

What is Estate Planning? Ted explains the basics of estate planning and why everyone should consider it, especially after a major life change like divorce.
Updating Your Documents: Revising your will during a divorce ensures your assets are protected and distributed according to your current wishes.
The Role of Trusts: Learn about different types of trusts and how they can help you control and safeguard your assets for your children and loved ones.
Power of Attorney Considerations: Intentionally choosing who will be your power of attorney (guessing you don’t want it to be your ex…)
Common Pitfalls and How to Avoid Them: Ted shares real-life examples and provides actionable advice on avoiding common mistakes in estate planning.

This episode is a must-listen for everyone EVEN if you don’t think you have a lot of assets to leave your family!

Listen Now!

For more information on estate planning and to connect with Ted Schneck, visit his website Seattle Wills and Trusts.