Cynthia de Fazio 00:00
You Cynthia, welcome to Retire Smart Austin. My name is Cynthia DeFazio, joined today by Phil Capriotti, senior of Empower Wealth and Tax and to our viewers at home each week, we like to tackle subjects that revolve around your retirement and most successful retirements to have one thing in common, a plan. Well, what about an estate plan? Have you thought about estate planning? Today’s show is going to be just about that. Phil, I just love this topic. And first of all, how are you? I love your suit, beautiful and blue.
Philip Capriotti 00:58
Wonderful. You’re gorgeous as well. As usual, I am wonderful. I’m still getting over and trying to get over having both of my sons on the program over the last several weeks. Fantastic. It’s been great. You know, we’ve talked for so many years about this. The company is generational. We’re setting up a plan. I want to pass it off to my children after we truly grow it to the size that it really needs to be. We want to provide more services to clients. We want our- we want to not only work with our clients and have our children work with our clients. We want to have my children work with our clients’ children. And this all revolves around setting up a proper estate plan. Most definitely. Yeah. So today is a great topic. We have our own estate planning attorney, and for those of you who call in, you have the opportunity to not only get your tax efficient retirement income plan and your portfolio, Morningstar portfolio review and an observation, but also to create- have a complimentary interview with our Estate Planning Attorney. So, a lot of folks, whether you have a will or not, whether you have a trust or not, number one, it should be reviewed and updated at least every five years. Beneficiaries should be reviewed and updated yearly, new children, grandchildren and so forth, being born. But it’s- I can’t begin to talk about it enough. Over my last 30 years, I’ve seen so many problems with individuals who were ultra wealthy, and really, they thought they had an estate plan that was viable, but in fact, they made common mistakes, like having one of their children distribute the assets of the estate we’re going to get into that. It causes family conflicts most of the time, and so it really doesn’t have to be. So today we’re going to go over all of the reasons to have a properly constructed estate plan, and what are all the variables that go into that.
Cynthia de Fazio 03:14
Most definitely, because a lot of people always think I’ll get to it down the road. I don’t need to think about estate planning right now, but we don’t know how long we’re going to be on this earth, so it’s important for everyone to have that put in place.
Philip Capriotti 03:28
Procrastination is the key to all ruin as far as I’m concerned. You know, I was very big on time management. Not so much when I was a kid, but once I got into college, I think I took my very first-time management course, and I realized, oh my gosh, just do it. Now, if you pick up a piece of trash, don’t set it over on a counter. Put it where it goes, point A, point B. Point A, point B. Same thing with estate planning, okay, don’t just think about it. Do it.
Cynthia de Fazio 03:59
Absolutely well, most importantly, Phil, if you think about the main reasons that people should be thinking about estate planning, number one overall, protect your loved ones.
Philip Capriotti 04:10
That’s exactly right. You want to protect your loved ones, and with that comes protecting minor children. With that comes protecting Special Needs beneficiaries. I think the number one issue when I really sit down and talk to clients is avoid probate. And you know what I hear, Cynthia, I have a will. I don’t need to worry about probate. And I’ll say, What do you mean you have a will, you mean your estate won’t be probated, but the will still has to be probated. So, for those of you who think because you have a will, everything is hunky dory, not necessarily true. Remember, if you do not want your business, your family’s business in the streets, so to speak. Speak. You want to have a trust, to wrap it- to wrap around that will. When you have a will, you have to probate. It- a probate court which puts all of your information on the street absolutely public knowledge. It gives it, makes it part of public knowledge, not in addition to that, it allows anyone to contest it, including family members who might be unintended beneficiaries. I’ll give you an example. There’s a certain family member that’s been in your life for decades, but never cared for you, never considered your birthdays, never considered holidays. We know everybody’s got one in the family, at least one, and they are normally the ones that complain the most when they receive the least. So, when you have a situation where you leave your daughter or your son to administer or to direct the assets of the estate, and you have a beneficiary that was supposed to get, you know, maybe he’s not getting an equal portion. There’s a problem. Absolutely, we’ve had it in our own family and my wife’s family with that being said, I warned but you know, again, it even you know, sometimes the painter has a house that needs painting, right? I warned her. But at any rate, so number two, never have your child distribute the benefits, the assets of the estate. If they are a beneficiary of that trust, makes sense, they can immediately dispute it, and literally cost 10s of 1000s, hundreds of 1000s of dollars disputing it whether you had the mental capacity when it was done, and so forth. But I don’t want to get into the negative things. Want to get into the positive things, but these are just some of the things. So, let’s leave it to the professional. So, you want to avoid probate, and that means you want to ensure that your assets pass quickly and privately without any court involvement. Okay, that’s number one. I really want to make sure they pass. The other thing is, for many of our estates, we may, as time goes on, be concerned about estate taxes. Oh, okay, okay, makes sense, especially with families that have family ranches, family businesses, this type of thing, generational assets. So, we want to make sure that we minimize estate taxes, and we want to do that by leveraging tax saving tools and implement that into your estate planning. Believe it or not, tax planning is part of estate planning. The big thing is controlling the distribution of the assets.
Cynthia de Fazio 07:49
Makes sense.
Philip Capriotti 07:50
I want them quick. I want it done quick. And I want to dictate who receives what, when they receive it, and how and how they receive it, and again, you may want to hire. One of the services that we offer our clients is the ability if we’re managing their portfolio, we’ll also, and we’ve set up their estate and their trust, we will also distribute the assets according to their intentions.
Cynthia de Fazio 08:19
That is wonderful, because some people could have financially immature children, not emotionally immature, but just financially, just little. I don’t know Willy and Ellie, with their spending.
Philip Capriotti 08:29
You have those spendthrift beneficiaries. We all know. I have five children. I know each and every one of them. I know which ones are the spendthrifts, and I know which ones can hold on to $1 to the end of time or make the best of that dollar so many times in our families, we may have a super responsible child, and then we have a child that might be super responsible, but what about their spouse? When you come into an inheritance of high six digits, seven digit, in some cases, eight digit. Many estate plans go afoul because there was not proper guidance to the children when they inherited the wealth.
Cynthia de Fazio 09:16
Okay, makes perfect sense.
Philip Capriotti 09:18
So, all of these topics that we’re talking about, every single one of them go into a proper estate plan.
Cynthia de Fazio 09:24
Well, Phil, we have to take a very short commercial break, but you have a message to the viewers at home. Would you like to talk about what that is please?
Philip Capriotti 09:30
My question is, do you have a perfectly constructed estate plan? Ask yourself that question. Ask your spouse that question. And dial 888-818-6557, I know you’ve been watching for years, or maybe just happened to turn on the channel today. This is Retire Smart Austin, and we believe in helping clients not only construct a tax efficient retirement plan, but we want an estate free. We want to have. That we want to have. Let’s say we want to have freedom within our estate plan to distribute the assets the way we want. So, dial 888-818-6557, tell them that you want to set up a consultation with our Estate Planning Attorney, and all you need to do to qualify for that is allow us to run a morning star report on your investment portfolio so we see what type of plan it is that you may need. And with that, we’ll give you a copy of it, we’ll explain it to you, and we’ll set out we’ll send you an estate planning questionnaire. Once you complete that questionnaire, voila, you’ll have an appointment with our estate tax attorney to check to make sure that your plan is constructed properly.
Cynthia de Fazio 10:50
Phil, thank you so much to our viewers at home. It’s a very important day today when you take that step to plan for legacy planning and estate planning, that number to call is 888-818-6557, or, of course, you can visit the website of empowerlegacyquiz.com and answer a few questions. Find out where you stand. We’re going to take a very short commercial break. Don’t go anywhere. I have so much more with Phil about the need for proper estate planning and why. Stay tuned.
Philip Capriotti 11:17
Hello, folks, think estate planning mistakes only happens to celebrities? Think again, Prince, Aretha Franklin, and even Ted Williams all left behind estates without a proper plan, leading to years of legal disputes and financial loss for their families. These mistakes aren’t just for the rich and famous. Without a solid estate plan, your assets could be tied up in probate, subject to higher taxes, or even end up in the wrong hands. The good news, these mistakes are avoidable. A well-structured estate plan ensures that your assets go where you intended, with minimal hassle for your loved ones. Have you reviewed your plan recently? Do you know how tax laws impact your estate? Don’t let your legacy become another cautionary tale.
Cynthia de Fazio 12:14
Welcome back to Retire Smart Austin. My name is Cynthia DeFazio, joined today by Phil Capriotti, senior of Empower Wealth and Tax, and we’re talking all about the importance of proper estate planning and legacy planning, how that ties into your overall wealth, if you will. This next comment that I have, Phil, would be about the importance of wealth preservation and transfer. That would be something to consider that’s so important with estate planning.
Philip Capriotti 12:40
It certainly is. And you know, for most of us who have an estate, and we’ve spent years and decades developing and we always want to make it better for our next generation, our children and grandchildren, and we want them to have the same opportunity to make it better for their grandchildren and so forth. One of the things that I think is extremely important issue is maintaining the privacy of your financial affairs. Okay, okay, keep it out of court. Keep it out of public record. Also, you need to plan for the incapacity of a trustee. It happens. I’ve seen folks that were actually ment- their mental capacity was great, was super, was sharp, and literally within a year, two, or three, it quickly diminished. Now what happens is you have to plan for this, because once that happens, it may create conflicts in changing the current estate plan. Okay, why? Because you no longer have the mental competency. Let’s face it, we had a president that had that issue not that long ago. So, with that being said, also we want to make sure that you have a competent administration for your wishes. And this is another reason why I don’t like to get the kids involved unless they’re actually, unless they’re either attorneys, okay, or they are not. They are not named as a beneficiary, okay, okay. The other thing is a philanthropic goals. I like giving to charities. We are charitably inclined. We give to the veterans. We give to the Folds of Honor. We give to both 501(c)(3)s that are deductible and five oh ones that are not okay. We like to give to good causes, Wounded Warriors, just to name it, absolutely all great. So, after I’m gone and after our clients are gone, we may still want to maintain those charities liquidity, or our donations to those charities. So many folks, when they construct their estate plan that goes on undiscussed. So, when we when we send an individual a estate planning questionnaire, we go through a whole list of questions. They’re thought provoking questions that help an individual say, You know what? I never thought of that. Let me put that in my estate plan. So, dotting the I’s and double crossing the t’s as part of a properly constructed estate plan is paramount as far as I’m concerned.
Cynthia de Fazio 15:33
Absolutely. And how important is it to leverage life insurance effectively in estate transfer?
Philip Capriotti 15:40
Well, for some folks, they may want to, they may want to put life insurance, or may want to create what’s called an ILIT. Okay, so an ILIT is an irrevocable life insurance trust, and one of the benefits of an ILIT is it remains out of your estate tax calculation. Okay, it’s designed to provide liquidity, excuse me, to either transfer to beneficiaries or liquidity to pay the estate taxes so a family ranch or farm doesn’t have to be sold off in a fire sale type of situation, because those estate taxes are due nine months after the death of the of the decedent have to be paid so many times we have assets that are not liquid or not readily liquid, and when we have a nine month period of time, especially if we want to keep that, We want to keep that asset or business or ranch or farm in the family for generations and generations to come. We want to use life insurance through the form of an ILIT, which is all part of estate planning. For those of you folks who never even heard of an islet before and may own a ranch or a farm here in the hill country, why don’t you pick up the phone and give us a call and let’s talk about it. Because it’s very possible you may have a will, you may have a trust, but you may not have thought of all of the variables that you want to include in the distribution of your assets when it finally comes, when the time comes to go and meet the good Lord above
Cynthia de Fazio 17:21
Absolutely, and I think it’s so important too to talk about legal control and clarity, obviously, clearly define who manages your estate. That’s probably the top one, Phil.
Philip Capriotti 17:31
Well, avoiding conservative conservatorship or guardianship provisions. So, I want to make sure I have the proper, durable power of attorneys, healthcare directives, all of these things in place. So, if some of this sounds like Greek, chances are we need to improve or upgrade your estate plan. You know, it’s funny. I was working with my personal attorney, excuse me, who also works with many of our clients. I was- there were many things brought to my attention 15 years ago. I thought I had an excellent trust. Here, I didn’t know. I had a prior marriage. I had children from that prior marriage. That marriage was all settled, the assets distributed, but then I have a second marriage. I have a child with that marriage. Okay? I have companies. I had no idea I needed three separate trusts. Wow, no idea. I had no idea. So here I was a financial advisor, thinking, I have this trust. Everything is set, but it wasn’t detailed enough. It left room for error, room for questions, which means room for potential future litigation over the distribution of the assets. So, with that being said, we don’t know how much you need until you have it reviewed. And what we’re offering our clients watching today is a review, a review of their will, a review of their trust, a review of their investment portfolio and their overall assets.
Cynthia de Fazio 19:13
Okay, Phil, thank you so much. Are you in the audience and you realize that you need a review? Do you know what you have in place, your will, your trust, your overall estate planning needs. Are they where you want them to be? If you’re unsure, call in today. Have that second opinion. Have the review. 888-818-6557, is the number to call to get on the fast track. You can grab your smartphone, click on the QR code at the bottom corner of your screen. That’ll take you right to the landing page, of course, of Retire Smart Austin, you can schedule your time accordingly. Remember if you’re in the audience and you do have questions; you can also visit empowerlegacyquiz.com that’s empowerlegacyquiz.com you’ll be asked a few questions. You’ll put a little answer in about yourself. And then you’ll get a beautiful email describing where you currently stand. We’re going to take a very short commercial break. Don’t go anywhere. I have so much more with Phil Capriotti, Sr, when we return on Retire Smart Austin.
Philip Capriotti 20:12
Hello. My name is Philip Capriotti. If you’ve already filed for Social Security and would like us to fast track you straight to a licensed fiduciary to create your tax efficient retirement income plan, we’ll be happy to accommodate you. You know, one of the most important priorities to ensure that you do not become tax poor in retirement is to number one structure a tax efficient retirement income plan as well as a comprehensive Morningstar report, this will ensure that you understand three major variables. Number one, how much risk are you taking? Number two, how much return Are you receiving? And number three, how much are your internal and external fees to fast track your meeting with one of our licensed and experienced team members, just click on the link below, complete the form attached so we can provide you with an accurate and detailed plan. Let’s start empowering your retirement right now.
Cynthia de Fazio 21:18
Welcome back to Retire Smart Austin. My name is Cynthia DeFazio, joined today by Phil Capriotti, Sr of Empower Wealth and Tax. And we’re talking all about the importance of estate planning and legacy planning in today’s show, Phil, we were talking in the commercial break about even more reasons that you’d like to share with your viewers at home. Talk a little bit about that comes to mind, please. Well,
Philip Capriotti 21:39
Well, the funny part about a properly constructed estate plan is the tax planning asset aspects of it. I want to minimize income taxes to my beneficiaries. I want to take care of that liability here and now. Why I have the ability to do so, especially with respect to inherited IRAs with the new secure act 2.0 remember these children, they need to if you’ve already started RMDs and you pass away, okay, your wife now has to pick up RMDs when or your spouse, when your spouse passes these children or beneficiaries, contingent beneficiaries, which in our case, are children and grandchildren, they have to take these RMDs and empty the account over a 10 year period. Now, if you haven’t done proper Roth conversion strategies, you created a huge tax nightmare for your children with your retirement accounts. So, all of this goes into a proper estate plan. It’s not just about wills and trusts absolutely also. You know, I say this with a smile. My wife loves animals and pets and all of my children do. I remember my mom saying, instead of having three boys, I should have had three pets when we would get on her, like, last nerve, you know, if we’re going back in the back in the day. And so the point is, how about providing for those pets? Yes, because certain folks have very large estates they may want to provide for their pets. I’m more concerned with generational skipping trust. So okay, I want a certain piece of my assets. Okay, since we’ve worked so hard to accumulate them, and we work so hard to reduce the taxes, paying the taxes up front, I want assets to go directly to my grandchildren. Have eight of them now, yes, good Lord willing. We have one more on the way. Yes, you do, okay, and that is through implementing a generational skipping trust. Okay? So, for those of you, where it circumvents my kids, they get theirs, but I don’t want to depend on them to pass on X amount of assets to my grandkids. Okay, okay. So, with that being said, I want to and so what did we do? Well, we employed a generational, generational skipping trust. Okay, so these assets go straight to the grandkids, and I employ appointed a conservator to look over those assets and make sure that they’re distributed equally among all of my grandchildren. I want them to remember their grandma and their grandpa. I love that, and normally we like to distribute it on our birthdays, twice a year, but that’s another story well. So, with that being said, How about facilitating real estate transfer and doing it without worrying about again, the tax implications of it. Okay, we talked about maximizing life insurance care. How about addressing long term care needs so important, so many folks say to me, I don’t need long term care. I have plenty of assets to provide for it. And I say, Great, which assets are we going to use? Point to the assets, because many times I agree, many folks, especially high net worth folks, they don’t need to have long term care. But I may put two or 300,000 of long-term care aside and like a fixed annuity, that if my wife or I need that, it will be multiplied times two or times three so I can leverage my assets to cover my long-term care. And if I don’t need long term care or home health care and my spouse does not need that care. The assets are still preserved for our children. Okay, so there are so again, where’s the money? Where is it coming from? Let’s put the plan together. It’s all part of the estate planning process,
Cynthia de Fazio 25:52
It is and it’s so important. I know that we spend a lot of time each week talking about proper tax planning, but estate planning and tax planning, they really do go hand in hand.
Philip Capriotti 26:01
They’re almost one in the same. How about fulfilling religious and cultural wishes? Okay, great. And again, I know we’re going down the laundry list, folks. What I’m trying to say here are there so many variables that go into constructing a proper and a complete estate plan, and I would ask you all to look into your safety deposit box and look into your heart and determine is your estate plan complete? Is your financial advisor talking to you about your estate plan? Is your financial advisor offering you legal counsel through their own personal attorney or a legal referral system to check this, and I would say most are not. They’re not even talking about the taxes. So, give us a call. 888-818-6557, come on in and meet our family. Come on in and meet our employees that are also an extension of our family. Yes, and go to empowerlegacyquiz.com that’s empowerlegacyquiz.com fill in some information, and you get there through our website, click the QR code. And with that being said, another wonderful show. Cynthia, thank you so much.
Cynthia de Fazio 27:21
Phil, thank you so much to our viewers at home, most specifically, thank you for spending time with us today on Retire Smart Austin, we know you have a lot of questions about estate planning, about legacy planning, visit the website. empowerlegacyquiz.com Again, empowerlegacyquiz.com you can call in to 888-818-6557, to schedule your consultation. Be safe, be happy and be blessed. We’ll see you back one week from today on Retire Smart Austin with Phil Capriotti, Sr.