Shownotes
Brandon Borgmann is a valuable member of the Carlisle Patchen and Murphy law firm.
Brandon is an expert in estate and business succession planning, probate special needs law, and tax. He provides legal counsel to individuals, business owners, and families, helping them with estate planning, tax planning, and business succession planning.
He shares insights on the importance of estate planning, discussing when people should hire him and the various life events that can trigger the need for an estate plan. From having children and getting married to inheriting assets or moving to a new state, these events can all impact one's estate plan.
Brandon emphasizes that estate planning is not just about money, but also about ensuring the well-being of minor children and making decisions about their future. He highlights the importance of tailoring estate planning services to individual clients, considering their unique circumstances and preferences.
Some areas we cover include...
- Discussion on why everyone needs an estate plan and when the need arises (age 18 and life events such as having a child, getting married, getting divorced, etc.)
- Importance of powers of attorney for parents of children turning 18, allowing access to medical records and financial management
- Range of clients and their financial situations, from young married couples with negative net worth to those with millions of dollars
- Importance of planning for the care of children and management of inherited assets after the death of both parents
- Tailoring estate planning services to each client's specific situation and preferences
- The inclusion of documents such as powers of attorney and the avoidance of guardianship in case of incapacitation
- The emotional nature of estate planning but the importance of making choices oneself rather than leaving them to strangers
- The goal of estate planning is to achieve the client's intent and maintain control over decision-making
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Transcripts
Brandon Borgmann practices estate and business succession planning with Carlisle firm
hen and Murphy law firm since:Brandon Borgmann: Oh, you're welcome. And thank you for having me. I, uh, appreciate it.
Brett Johnson: That's a mouthful of is.
Brandon Borgmann: It is. And, uh, when you try to work your bio through, you want to be accurate, but, uh, know, not put people to sleep as they read through it.
Anyone and everyone essentially needs an estate plan
Brett Johnson: No, that's so with all that that Katie covered, I mean, what situations in people's lives come up that they need to hire you for then?
Brandon Borgmann: Yeah, uh, typically, we say anyone and everyone essentially needs an estate plan in some way, shape, or form. And it's usually once you hit age 18, we say that need can arise. Uh, I have a lot of clients that work with that. When their children hit age 18 and they become legally adults, maybe not behaviorally adults, but legally adults, they, uh, no longer, as a parent, have the right to access that child's medical records. They no longer have the right to manage their financial matters. And so, a lot of times, before we send a child off to college, we like to put powers of attorney in place, just in case, so the parents can access medical records if something goes wrong, or manage finances if they need to. So we always say, hey, once you hit 18, there's at least a very basic level there. But outside of that, it's a lot of life events, uh, that drive people towards us. So, having a child, getting married, getting, uh, divorced, someone passes away in the family, you inherit something, you, uh, move to a new state. These are all things that kind of, we always say are triggers, uh, to come in and have a talk with us and get a plan, uh, put in place. And, uh, outside of that, I wouldn't say there's any kind of financial or monetary threshold that we look at. It runs the whole gambit. I have a lot of clients who are young, married couples, maybe just had their first child and, uh, you add up their net worth. Once you factor in mortgages and student loans, it may be in the negative. So it's not necessarily always about, hey, planning for money and moving the money. But if you have a small child, a big part of it is planning about who's going to take care of your child, right? Should both parents pass away while the child's under 18. And more important is what does happen to the money that's there after both parents pass away. Because the default law is once a child turns 18, if we don't plan for it, we give a lump sum to that 18 year old. And usually lump sums of money and 18 year olds are a bad mix. Uh, and so we have had that situation come up now, thankfully, knock on wood, in that situation, we had three and a half million going to an 18 year old who at first decided probably high school wasn't something he needed to finish. But he did. He finished it out. And now actually, he runs his own company now and is doing fantastic, uh, since then. So that's one of the success stories there. So there from the gambit all the way up to millions of dollars, uh, where most people think that's where you need the estate plan. It runs the whole gambit there.
Brett Johnson: Yeah. And it's funny, I think you're right that we don't envision those life situations. Oh, it's never going to happen to me. We answer that questions like, oh, it's never going to happen, never going to happen. But it does. Mhm, and it's so simple to plan for, to think about, but because it is very nitty gritty in regards to the details correct. Because it can be all, come on, that should be easy enough to do, like not necessarily.
Brandon Borgmann: We get some pretty refined planning put in place. It depends on client philosophy, too. Uh, some clients that want to control every last thing from the grave and put as many strings on the inheritance as they can. On the other side of the spectrum, I have clients who are like, give it to them. If they blow it, they blow it. That's called life. I'm dead, I don't care anyway. Uh, and so I always tell clients there isn't a totally right or wrong answer to the planning. There are certain things we always want to do with everyone's estate plan, but there's a lot of variation above and beyond that. And some of it's philosophical. Sometimes people have religious ties into it. Uh, just, uh, money management perspective. Ah, charitable elements to it as well. And so the world's kind of wide open. Um, some people want to put incentivizing provisions, uh, in trust documents with financial incentive, substance abuse issues, uh, kind of built in requirements of premarital agreements. You'd be surprised at some of the things that we end up drafting.
Katie Ellis: So it really sounds like you tailor your services to the client that you're seeing.
Brandon Borgmann: We do. Um, I always tell clients that there are certain documents that we will put in place no matter what the situation is. And that kind of goes to, um, another area of estate planning that most people don't think about, because everybody thinks about estate plan. Think, okay, that means I'm dead and what happens next? But the other element is we always want to plan for the possibility that somebody, they're still alive, but they have lost capacity. Right. They can't make healthcare choices, they can't manage finances. So a big part of estate, uh, planning is putting documents in place called powers of attorney to allow the client to pick who's going to be making those choices for them when they no longer can. Because the alternative here in Ohio is when you become incapacitated, you don't have a power of attorney. We got to march down to the probate court and get a guardian appointed for you. And that's a very involved process. It's a very lengthy process. It's a very invasive process. I mean, it's basically putting almost the entirety of your financial and health care life into the public record at the probate court. M you're judicially declared the phrase they use is incompetent. I wish the law would change it. I think incapacitated is a little bit more kinder, softer word. But no, in a guardianship, we actually have a court entry declaring somebody incompetent. And so, again, powers of attorney avoid that. And so those are some of those basic documents. I don't care if you have $0 or you have $100 million, we want those documents in place across the board. But then when we get into things like wills and trust, it's always very specific to each client's situation, what they want to have happen. We can draft it different for each child's situation or it just varies. We just got to really listen to what they're telling us and what their life situation is and make sure that at the end of the day, we're achieving their intent. Right. That's the goal. That's the goal.
Katie Ellis: So it sounds like if there was something emotional or like, oh man, I don't want to go into those topics and think about those things. It sounds like it's better to do it yourself and be able to make those choices than hand that over to someone you don't even know.
Brandon Borgmann: Yeah, it is, uh, because again, you pick who's stepping in your shoes, if you will, uh, who's running the show, where in a guardianship, it can be anyone who happens to apply and the court thinks is a good fit as your guardian. Right. So a lot of estate planning also is about control. Not, uh, only controlling who's going to make decisions for you, but if you have minor children, you're controlling who's going to be making parental decisions for your minor children in the event you pass and they're still minors.
Brett Johnson: Right.
There are other pieces to estate planning that separate from material wealth
Brett Johnson: So you mentioned a little bit earlier, when we're talking about family wealth or even business wealth, we often think we aren't. If you're not in the millions of dollars, why am I hiring an attorney? That m sort of thing. So, um, can you demystify that thought of you don't have to be a millionaire to be that? I think we touched upon it a little bit here, but I think we need to dig a little bit deeper because of stories I hear it's well worth it, even if you just have $1 to your name. There are other pieces than just the money wealth that mhm are important. Can you demystify that a, a little bit? Little bit?
Brandon Borgmann: I sure can, yeah. A big part of, uh, estate planning that kind of detaches from material wealth, one is those powers of attorney planning for incapacity. That's a big part of it that most people don't think about because guardianships can, again, get very involved, get kind of messy sometimes. And so it allows your affairs to be managed privately. And that's a big reason why you would want to come and have an attorney work through your estate planning with you. Uh, another kind of non financial reason is, again, minor children. Your estate plan is the place where you can express who you want to basically be the substitute parent for those kids, um, who's going to be making schooling decisions for there, who's going to be making health care decisions for them. And if you don't take that time and put it in these documents, then it really is up to initially a court to decide what's in your child's best interest. And kind of anybody can, uh, apply to be the guardian. So I have clients who express that preference, uh, but I also have clients who express a preference who they would not like to be in that role or even express a preference that they want a two parent household. Uh, right. And so maybe they say, hey, my sister would be a great guardian for my children, and I want her and her spouse to be, uh, the guardians, as long as they're married at the time. Kind of stipulations there. So can really think through it that way. But those are the things that kind of come into play. Regardless of your asset level or anything about saving tax and, um, that and just making things easier and simpler for your survivors. Frankly, we can set things up to avoid probate. Uh, right. Probate has become a little bit of a four letter word these, uh, days and it's not unwarranted. Uh, I'll tell you what can make probate really frustrating is are the parties involved. And if people want to throw a wrench in the gears, they can do so. Uh, but avoiding probate is a pretty simple process. It, uh, doesn't take a whole lot of effort. It's mostly paperwork, to be honest with you. It's all about how you own what you own when you pass away. And we can guide our clients through that and help them through that process. But again, just the ease of that. Uh, and then something as simple as talking about funeral plans, burial plans, disposition, uh, of what we say your bodily remains right after you're gone. Uh, and there's a form. Ohio law has a specific form. It's very aptly called a disposition of bodily Remains form. And it sounds OD, but that, uh, can be a lifesaver because a lot of people, they pass suddenly, their spouse or their kids or family members, they don't really know.
Brett Johnson: You're not in their mindset to even think about that.
Brandon Borgmann: No. And I've had so many clients say that pre planned or prepaid burial, funeral contract that mom or dad decided to put out there was a godsend because they knew they were doing what mom or dad wanted. They didn't have to figure that out. They didn't have to fight with their siblings about what song do we play and what, um, Bible verse do we read, and it's all there for them. So they're focused on each other and just kind of dealing with the loss.
Brett Johnson: Yeah. Uh, when we initially sent just a basic will when we got married, I remember us wanting, um, our kids guardian if we were to pass that they lived it was, uh, my wife's sister and brother in law, uh, my sister in law and brother in law, they lived in state. And I remember going through some paperwork for that to even happen, because the state of Ohio kind of takes care of their own, unless you specifically say that person's in Indiana, it's a little bit of a hurdle to go through if you're looking at a guardian to be out of state, uh, to do that. So, again, if you don't take care of it ahead of time, it becomes a headache. Yeah.
Brandon Borgmann: And we talk through that. Uh, we ask, who do you think is going to be in that role for your kids? Where do they live? Because when you think about that, if they live out in California and you're here in Ohio, yeah, they might be great guardians for the kids. But situationally, if you need a guardian, that means both parents are now deceased and the child's under 18. So not only has the child lost both parents, but now we're telling them, you got to move out to the West Coast, to a whole foreign world. So those are some of the considerations that we also try to work people through.
Special needs law intersects with estate planning and trust creation
Katie Ellis: So to move on to a different topic that you take care of, um, can you describe what special needs law is and how does it intersect with the estate planning and trust creation?
Brandon Borgmann: Absolutely. So, special needs law, um, really what it is, it's an area of estate planning that is focused in on usually it's children or other beneficiaries or someone that a client wants to give an inheritance to that has some kind of limiting condition, developmental delay or other disability. And most of the time they may be receiving some type of public assistance benefit as well. Most of those public assistance benefits are what we call means tested. So in order to receive those benefits, you have to have income that's below a certain amount per month and you have to have what we'll call resources below a certain threshold. Now, those resources and income thresholds are very low. Right. You have to be quite impoverished, uh, to qualify for some of these programs. Uh, and at the same time, a lot of parents say, I don't want to disinherit my child just because they have special needs. And historically, what we have seen happen is they disinherit the child and they son, uh, know your brother Jim can't inherit because he's on public system. So John, we're giving you all the inheritance with the hope and understanding you're going to use some of that for your brother. Sometimes that works out, but that's kind of fraught with peril sometimes because maybe John doesn't hold up his end of the bargain. Uh, maybe John gets divorced, uh, and loses some of the inheritance in a divorce. Maybe John gets sued because he's in a car crash and then suddenly was intended for the special needs child, is lost in that fashion. So special needs planning is it usually kind of very specific types of trust agreements that are drafted to comply with state and federal law so that the special needs child can not only continue to receive really crucial public assistance benefits to meet their daily needs and their activities. But then we have a supplemental source from the Trust to pay for things above, um and beyond. So maybe you have a little bit better grade medical equipment, maybe they can take a trip, maybe they have other life enrichments. And again, these are things that are in the federal and state law that allow these types of trusts as long as they're drafted a particular way. And it's kind of an acknowledgment saying, hey, just the basic public assistant program really isn't going to always be enough. So we allow parents to supplement that. And that's a big part of what the special needs planning is. It's preserving those benefits.
Brett Johnson: It sounds like the earlier the better then, because of all the changes you talked about the potential modifications over time.
Brandon Borgmann: Yeah, it is. Those regulations change by the day, it sometimes feels like. And so you want to get in place, get it set up and get that, uh, ready to go. Who knows what the future may bring there. But, uh, yeah, we just want to preserve that.
Brett Johnson: Yeah. Wow, that's great. Um, and shifting it into another because there's so many areas that you cover with the law firm, which is good because it makes it a very rich episode we get to talk to you about, but let's go into the business owner succession thing.
Business owners and individuals should engage in business succession planning
Brett Johnson: And I think before we started recording, you were mentioning, which I'd love, katie and I both jaw dropped. Like, you're talking about generational succession of four, five, six generations. So what are the key reasons why business owners and individuals should engage in that, uh, business succession planning? What are the nuances to that that a lot of us don't understand? We don't get that. It's like, oh, that family's gone on for five generations, but it didn't just happen.
Brandon Borgmann: Right? No, it's careful planning, and it's careful planning over a long period of time. Uh, and really a big portion of it is, if they have next generations who want to come into the business and they plan to have them come into the business, it's usually starting that next generation as early as they can. And it's not like we're thrusting them in and start you need to know how the business works. A lot of time, it's bringing them into family meetings and just introducing basic concepts to them. What's? Uh an LLC. What is a trust? How do some of these legal concepts work? So they start building the base up, and of course, they're spending time around the company. So it's not just time in front of boring attorneys. All the time, they're understanding how the company runs. But some of the legal concepts. And the earlier we see these companies that are getting into gen four, five and six, uh, the earlier we see that involvement, we see a different type of mentality in the children or the next gen. Because if you're not involved and you don't know anything, and suddenly the generation above you dies, and it just all drops into your lap. A lot of times we see people look at that as like a windfall. They won the lottery, they won a prize, or whatever it is, and it's just all it is. And they kind of maybe treat it that way, uh, where if you've been involved with it for a long time, you know the history, you know what's gone into the growth of the company, what your ancestors have done, if you will, to get to where you are. Uh, they view it more as a legacy and are usually a bit better stewards of it over time. And so that's one element of the succession planning, is who's going to be taking over and how do we start kind of getting them ready for that? Uh, then the other element to the succession planning is if we have multiple owners, but not necessarily we're not looking for generational, uh, ownership transfers. The discussion usually starts with, hey, you like your business partners, right, and say, yeah, we always like each other. Well, do you like your business partners? Spouses or significant others or children? Uh, oh, yeah, they're great, they're fine. Do you want to be in business with your business partners, spouses, significant others or children. That's usually when they're like not really. No. Right. And so they don't really think that through. Because if, say, you have a three member LLC, each has an ownership interest, which, think of it, it's almost like you own a share of stock. Right. If you pass, you have an LLC interest that we need now to administer. And if it ends up in the hands of a, uh, surviving spouse who knows nothing about the business. Now you've got two owners in the business running the show, and a third owner who's not involved and probably knows nothing about the business yet, probably wants some economic value out of that process. So we do things like buy sell agreements, which we have obligations to buy each other out. Or we couple that with life insurance. Right. So we fund it through life insurance so they can just automatically buy out. So it gives business owners the right, an ability to control who they are in business with.
Brett Johnson: Um, and it's never too late in the process of a business. Okay.
Brandon Borgmann: Yeah.
Brett Johnson: If you didn't do at the beginning, it's not too late.
Brandon Borgmann: No, actually, uh, just, uh, earlier this week, I sat down with a father son combo, uh, that's been around for 43 years now. And, uh, just now putting our succession plan in places between that. So, yeah, never too late to start.
Brett Johnson: Good.
Katie Ellis: Okay, well, you are just a wealth of information and advice and support. Uh, thank you so much for doing this with us.
What do you think your clients like best about working with you
Katie Ellis: Just one last question, though. Uh, if we were to ask your clients what they like best about working with you, what do you think that would be?
Brandon Borgmann: Uh, I hope it's just I make the process easy for them. Um, I try to be warm and open about the conversation. Um, try to demystify it a little bit. Uh, I say maybe it sounds complicated, but that's just attorneys creating job security, right? If we didn't make it so complicated, you wouldn't need us anymore. Uh, but no, just try to make the process easy. Be personable, be friendly, be cognizant of family needs trying to breach maybe what might be difficult topics, uh, to talk about, but just me being the intermediary there and alleviating. A spouse having to say, well, what if I die and you get remarried? And what happens to the assets kind of just leading them down that path and having that breaking the ice for them. So maybe that personal touch and just being, uh, open upfront and just kind of easy to work with, I hope, is what most of my clients appreciate. Yeah.
Brett Johnson: Super.
Katie Ellis: Fantastic.
Brett Johnson: Yeah. Thank you so much. This has been, as Katie said, informative. And, uh, if anyone needs to contact you or should contact you, what'd be the best way to start.
-:Katie Ellis: Great. And we'll put all of that information in the show notes.
Brandon Borgmann: Thank you.
Katie Ellis: Thank you.
