Welcome to the Good Steward Law and Wealth Podcast, hosted by Ledly Jennings. In this episode, we’re exploring the roadmap for creating a comprehensive estate plan, emphasizing the three critical stages of life: proactive planning when you’re alive and well, addressing potential incapacity, and preparing for life’s final phase. Ledly warns that if you don’t prepare for these phases, the government has a plan that may not align with your wishes. From the importance of insurance and long-term care to ensuring your children’s financial framework is secure, this episode covers everything you need to build a plan that protects your assets, minimizes risks, and provides peace of mind for you and your loved ones.

IN THIS EPISODE:

• [0:31] The three phases of estate planning
• [2:16] Phase One: Proactive planning when you are alive and well
• [4:33] Phase Two: The incapacity phase
• [9:35] Phase Three: Death
• [15:14] Designing a financial framework for your children

KEY TAKEAWAYS: 

• Estate planning is not just about creating documents like wills but about building a comprehensive roadmap that accounts for life’s various phases—being alive and well, potential incapacity, and eventual death. Planning proactively ensures your family is protected and not subject to default government plans.
• A will is insufficient for robust estate planning because it only addresses who gets your assets, leaving other critical aspects like timing, management, and protection up to the courts. Trusts offer a flexible and protective mechanism for managing and transferring assets, shielding them from risks like creditors, lawsuits, and divorce.
• Effective wealth building includes saving at least 20% of income, utilizing tax-efficient accounts like HSAs and Roth IRAs, securing affordable term life insurance, and planning for long-term care and disability to safeguard financial stability during life's uncertainties.

RESOURCES:

L. Jennings Law - Website

L. Jennings Law - Facebook

Ledly Jennings - LinkedIn

L. Jennings - Instagram

L. Jennings Law - YouTube

The HSA Triple Play - The Most Powerful Retirement Account and Long-Term Care Strategy

Unlocking the Power of the Beneficiary-Owned Trust

ABOUT THE HOST: 

Attorney Ledly Jennings, founder of L. Jennings Law, specializes in protecting legacies and ensuring smooth transitions of personal and business assets. With offices in Arkansas, his firm offers expertise in estate planning, elder law, probate, and business planning. With a J.D. and MBA, plus valuable experience at Stephens, Inc., the state's largest investment bank, Ledly serves high-net-worth clients and family businesses statewide.

GSLAW-Ep. 19 - Your Family's Roadmap-Transcript

Ledly Jennings: Hey everybody, welcome back to the Good Steward Law and Wealth Podcast. Excited to have everyone here today, because today we are going to talk about the roadmap roadmap. For your family, um, mainly roadmap for estate planning, but really this applies to your family's wealth values, everything. So what does a roadmap and a plan for your family look like?

It, it talks about what happens if life goes wrong. Uh, but what happens when life goes right? How, how do you plan for that? And when we think about our roadmap for a family, you know, really, I start as I always go with about age 35, I've been, I've been on that age here lately. When you have a job and a family, young kids is kind of at that point in your life when you're building wealth.

What does the roadmap look like for your family? Well, there's three time periods that we're going to talk about. The first time period is when you're alive and well. The second time period is if you are incapacitated and the third time period is upon death. So we want to plan for each of those situations in your roadmap.

Well, the first stage, proactive planning while you're alive and well. This is when clients come to me, like I said, say that age 35, they're married, they have kids, they want to plan, um, for their family because they're in a stage now where they're They know where they are in life. They have a job, they have steady income.

That's usually the stage you're at when you're a younger family. So when I start talking with people about this roadmap for growing and building your wealth, We want to first make sure are you contributing enough to your savings to plan for your future? My general benchmark for that is about 20 percent of your income.

You need to at least be saving In various forms, but the first part is contributing enough The second is are you contributing in the right places? meaning are you doing the most tax efficient manner that will Um, let you take home your, the most money. So it's, it's not about what you make, it's about what you keep.

It depends on your situation, your income, and your goals. So when we meet, we always talk about that is what are the goals, and then we solve for that based on the asset location. The next thing we look at is, are you getting the best rates and the best deals out there? This comes into play, you know, one, with your mortgage rate.

Do you have a good mortgage rate? Um, insurance, um, car insurance, life insurance, all that. Um, are you getting the best deal for things that you need? So, optimizing our income. That's the growth and building phase. And then we look into part B, which is the risk phase. Are we prepared for what could happen?

So if you died. Your wife and kids most likely could not maintain their lifestyle, pay their bills without your income. That's where life insurance comes in. I'm not a huge component of other types of life insurance, but I am of term life insurance because it gives you peace of mind and protect your family.

Everyone can have term policy. Ours are cheap, you know, maybe I think 60 bucks a month, something like that. And that gives us enough, um, benefit to, if I passed away and my wife loses my income, she can maintain her lifestyle. We can pay for the home. We can pay for kids, school, all that they're provided for.

So we don't even need the life insurance policy. So it serves a specific purpose. Um, so when you hear life insurance, I'm not talking about whole universal, anything like that. We're talking about term here when you're being a proactive planner. So that's phase one in the roadmap. And then we look at phase two of the roadmap, the incapacity phase, you know, what happens if you're in an accident, it can be a car accident.

It could be a stroke. Um, it could be down the road with dementia, Alzheimer's. Um, anything can happen and in fact, a lot of it will, you know, accidents are common, but when you start talking about dementia, I heard a stat the other day that one in three people, um, get diagnosed with dementia, two out of three people need long term care at some point in their life.

You need to name someone you trust to make those decisions for you. I mentioned earlier that. You may not know it, but the state has a plan for you. Same with this, uh, the government's plan for your incapacity is called guardianship. They appoint someone to be your guardian and manage your affairs, and it may not be the person you wanted to appoint.

So you need to name someone proactively that you trust and that you plan for. Um, and I say this, uh, a quote I heard that good parents plan for their absence because they know life happens. So it's your job as a parent and as a leader of your family to plan for what could happen. It's your responsibility.

My favorite way to pay for long term care. Another one is long term care insurance. For the most part, long term care insurance is not affordable and by itself, but there are different types that are asset based that can make it affordable. So talk with your advisor about that also, but you need to be saving and planning for that in some form or fashion.

And that's a way to protect your family during temporary periods. Life insurance protects death, but disability insurance protects while you're living. Um, so that's very valuable and you can get pretty affordable rates for that too, through maybe it's your company has a plan. Uh, us attorneys, our bar association offers a very discounted rate for disability insurance.

So we go that route, but just we help clients search through the different options that they may have for incapacity. Now let's talk about that final stage in the roadmap. Um, death, you know, what happens at the end of the line, whenever we've reached the end of our road, how do we plan for our death? Well, I'll start with the statement that a will is not enough.

It just answers who gets it. And more importantly, the person that answers that question is the court. So the government answers the question, they follow the wheel, but they decide who gets it and how gets it. So I don't ever want to be involved in the court system if we can avoid it. And we proactively plan for that to avoid the court system.

So an estate plan is more than just a wheel. Uh, there's a lot of ways to avoid probate. The main one being a trust. I think a trust is the. Basis of every good estate plan. So that's where we start with planning for death in most cases is a trust. Now, how do you do that? The main thing there is it avoids probate.

And how you protect them. Um, inheritance is known as a gift of love and how you show love is protecting the assets in the best way possible for the things that really matter. And what matters is, yes, it can be your financial assets, but it's a lot of other things. So. We want to protect our children and how we pass things on.

And I'll start with this, that passing things on to your kids outright is dangerous. Meaning if you die, you just give it to them outright, free and clear. It's theirs. That is dangerous. It is like, um, An attorney used this example a lot that I work with. It's like putting your stack of money on top of a table in the middle of a tornado.

But if you pass it on to them in a protected trust, it is protected from creditors, from divorce, um, from lawsuits and from their own ability to, or bad ability to manage money. So most of my clients want to protect their, their kids from creditors and divorce. You know, you never know what happens. Even the most successful kid that's a doctor can still be sued for malpractice.

So why not protect your kid from that? And it can be done in a very flexible manner. Um, one, if they are young kids, you know, under 18, you have a 12 year old at home. You don't want to leave them their inheritance outright. So when at age 18, they get all this money. No, you want to leave it to someone else to manage for them, whether it's another family member, friend, or bank.

They're the beneficiary. And they're the trustee, meaning they make the decisions, but it's protected. Um, so that is how you want to leave things to someone. The old school way of planning and a lot of trust I review is, you know, at age 30, my kid can get a third. At age 40, they get another third. Age 50, they get the rest of it.

So you say what they can and can't use it for, and it can be up to their discretion. Um, some people worry about the admin cost or their access to the capital. I draft my trust, very flexible to where you can access what you need when you need it. There's a, even a more flexible power called a five and five power that you may have heard.

Um, well, you probably haven't heard of, but a lot of attorneys use that at least that are specialized. It allows you to access 5 percent of the trust, uh, for any reason. Um, but if you're trusting and it's up to your discretion, you can access it for any reason as well. So that's the roadmap for how you plan for your death and your kids and your grandkids.

Um, one thing I've been looking at with my family, we are designing a, Financial framework for our kids. You know, if something happened to us, how do I want them to think about investing and making money? And it starts with just a framework that I use in my clients, but generally it's just a roadmap of what you do.

And then our framework goes into a lot of other stuff about. Types of assets to invest in, you know, invest in assets that don't require your time, like real estate, um, various other things that you can scale and build wealth. So we go really in depth, but another thing you can do is proactive education, make a list of books that you want your kids to read videos.

You want them to watch. Professionals you want them to talk to because it is more than just the wealth. Um, wealth means a lot more than finances. Um, wealth is a lot of things for a lot of people and it varies from family to family, but you need to provide that road map for your family. So I hope this provided you at least some roadmap, um, where when you're planning for your family, you need to plan for.

Thank y'all for listening. This is where we consider everything a gift, and it is our job as good stewards to manage what we've been given to the best of our ability.

Narrator: Thank you for tuning in to the Good Steward Law and Wealth podcast. If you're ready to take control of your financial future, visit good steward firm.com to book a meeting and sign up for our newsletter.