Episode Transcript
[00:00:00] Speaker A: Welcome to Business Forward. I'm Joe Reyes and today we're talking about how smart decisions and clear numbers can drive real business growth. You're watching now Media Television. Welcome to Business Forward. We equip leaders with the strategies to grow, protect and future proof their businesses. I'm your host, Joseph Reyes. Today's guest is Alina Gonzalez Dockery, founder and principal of Life Law Planning. This based in southwest Florida. Alina brings 28 years of experience in estate planning, probate and family law. She's passionate about helping families and entrepreneurs protect legacies through proactive legal planning. Alina, welcome to Business Forward.
[00:00:41] Speaker B: Thank you.
[00:00:42] Speaker A: You're welcome. Let's start with the biggest question of the day, and that is what happens if you're not here tomorrow? What should a person do, a business owner or parent do to prepare for that eventuality?
[00:00:56] Speaker B: It is so key for the preparation because here's the thing is life can throw you many, many curveballs.
And we've seen it, we've seen it through 2020, the COVID and, or accidents or I mean, it's, it's that ounce of prevention can help your family save so much anguish, time and money.
I can tell you, because it's not just after death, it's also in, in case of incapacitation.
So just that ounce of prevention. And what I say is it's like, it's just like when you go to your doctor and you have regular checkups and you're doing all of the, I'm going to speak, like mammograms or colonoscopies or something that's all preventative care to ensure that you're perfectly healthy. But, but also you can catch anything in the meantime. It's the same thing.
People seem to think that if they go to an attorney, start talking about estate planning, they are planning their death. It's a death knell. It's depressing. It isn't. It's just planning. And if you are someone who has ascertained assets like homes, especially I'm in southwest Florida, we have a lot of snowbirds. We have a lot of people who own multiple homes in multiple states.
Trusts are key, essential to those people because if not, they're going to have to have probates opened everywhere. They own a property in the states that they're located. But also, I mean, as we're looking at, like my parents, who are almost 90 and 93, that trust is a great foundation that in the event that they no longer can take care of their own financial needs or health needs, we Have a clear plan within the trust, how they wish to be maintained, taken care of, and someone just steps into their shoes and it's seamless. You don't have to get the courts involved. You don't have to get a guardianship. You're not paying tens of thousands of dollars to attorneys like me. If that little ounce of prevention.
[00:03:02] Speaker A: Yeah. So why do you think, and I know in my experience, I see this all the time, but why do you think so many people, business owners, parents, don't pull the trigger. They shy away from this very important life event and how to control that life event. What do you think is stopping people, in your opinion?
[00:03:24] Speaker B: Hubris.
Honestly, I think that some people just don't like the discussion because they're talking about their own mortality, their own incoming death.
Um, I also think in the case of business owners, some may think that, oh, well, that's so far off, in the future, my business will be sold. By then I'll be retired. That's not a factor. Or they think, and I've had this. Where some business owners, especially those that are in partnerships or hat, or formed as an S corp or C corp, they think that it's already taken care of within the articles of incorporation or bylaws.
[00:04:10] Speaker A: Right.
[00:04:11] Speaker B: And I think that's where there's a big gap in understanding. And I'm sure you've seen this, where some people will assume that their corporate paperwork, oh, it's fine, it'll be taken care of. I don't. My family will never have to worry about anything. But in the event that you should.
You should pass away or become incapacitating, you have an LLC or you're, you know, you're your sole owner, there's a lot of issues that comes with someone jumping into the shoes of that owner to continue the business practices, especially if it's a licensed required business, like lawyers, insurance agents, accountants, you know, where you have to be licensed and regulated under that business, I can use myself. I mean, I own my own law firm, my parents. I am the only lawyer in my family. Nobody can jump in here and start doing my business. I have to have an attorney manage my law practice. So I think some of that is just misunderstanding. Some is just fear.
I mean, I'm sure you run into this all the time as an accountant.
[00:05:24] Speaker A: Yeah, well, you know, I think. And I think about my. My accounting practice and, you know, people don't know what they don't know.
And, and, you know, in the state of Pennsylvania, as I understand it, you have to have a licensed CPA to be a. Running the company, to be partner and all the company. But you can actually now bring in an accountant who's not a CPA as maybe as a minority partner, but which is something to look at. But I always like to talk to people especially like doctors and professionals like yourself.
So, all right, so you're in business by yourself, you're a sole proprietor, you're 100% owner and you know, you're 40 years old and 40 year olds don't die, right.
They don't get into car crashes. Right.
So what happens if, let's say, you know, that happens and you need a licensed individual to take over the business? Well, if you don't have a succession plan in place, the business is toast. And I want to talk to you about succession planning about also. But you're toast, you know. But what if you do have a partner?
In my case, my wife is a registered nurse.
I had a teacher, how to turn on a computer.
Being facetious. Right.
But I have a partner, let's say, if I get one and I die, you know, well, does my partner who survives me, does he want to have my wife as a partner? I don't think so, you know, because she's going to inherit my share of the business.
So succession planning with life insurance, buy, sell agreements, things of that nature.
Would you care to talk about a little bit about buy, sell agreements and life insurance and how to protect oneself that way?
[00:07:05] Speaker B: Well, I, you know, it's interesting you mentioned this because I was talking about this with some other friends that I got together and they're attorneys and all.
And even for myself, like one, I have life insurance policy and one of my beneficiaries is my legal practice or the trust that holds for the trust that will manage the legal practice. And the reason why I did that is because I want to ensure that one, my paralegals, my employees can get paid two, to ensure that my clients, who I may still have active client cases or still require work to be done, that there's a money to be able to pay other lawyers to either take their cases if there's no retainer or to finish it up, but and also to cover any liabilities or creditor claims that I may have through the firm.
Now one of the things that I assisted a client, so he is, he has a corporation, actually has an international business. It's his business, he started it from scratch. He literally is the American dream.
Poor kid from Boston got a ged, kind of did the slow roll and he ended up learning A trade printing and created a business out of it. And it's very, very lucrative and it's very successful.
Well, one of the things that when we were looking at his trust plan and his estate planning was that he has three children that are in their 20s, none of them work for the company, but he does have two SIP or he has a sibling, the wife and this and his sister. So a brother, sister in law and a sister that are working for the company. So we wanted to ensure within the trust documents, which was really cool, that we set it up because we set it up as schedules to make it easier if there's an amendment needed.
But we ensured in there that we went ahead and did a succession planning as to profit sharing, how decisions, we even made it where we were creating bylaws for the company at the same time to what is the makeup of the board? Who is going to be the cfo, the CEO, what is the profit share split? What are the share splits? Because he wanted to ensure that his siblings who were so key in his success were also benefiting from it. So you can, you can, you have a lot of leeway in the trust to be able to create that. And the way we did it is we just kind of structured it so that eventually when the kids go into the business or if and when they go into the business, how are they going to start stepping up within the board of directors and taking on more responsibilities. We wrote this all out not only in the trust document, but also it led to a great succession plan blueprint.
[00:10:08] Speaker A: Wow.
[00:10:08] Speaker B: For his company, very slick.
[00:10:10] Speaker A: That's very sharp.
[00:10:12] Speaker B: And it was so much fun. It was funny. So you don't see it, but like I have a whiteboard back here and I had those big post it board type of poster. I have it smacked all over the wall so that we could see how we did it. We were really planning it.
And it was so beneficial for him too because he has multiple businesses. He's, you know, once you're an entrepreneur, you're going to start other ones. Right. And he was following more passions and such. But it really was a great segue into seeing how his children could then be, you know, funneled in and, and streamlining them into the business and ensuring that even if there's a niece or a nephew that wants to get in that we just had such an amazing time. Because that's the beauty about when you have a, when, when you're an owner of a business, you really do get to have carte blanc so long as it's within the limits of the law. I mean, we're not talking about illegal stuff, but you can create how you want your business to be managed, how you want it to be success, the succession plan, who is to be in charge, how is it supposed to be split? But also within the trust, you can ensure that, let's say none of your children are, you know, say you have a brokerage business, right? Say you're a merchandise brokerage. You have a big business doing great, you have great managers, you have great people. But your kids are doctors and lawyers and don't have an interest in the family business. But it's such an optimal thing that they still can get the profits, they're still shareholders of the business.
You can implement within your trust as well as your bylaws. You can marry them in a way in how decisions are to be made, who will be in charge, how your children will continue to benefit from the legacy that you built. Hey, trusts are fun.
[00:12:08] Speaker A: Well, and a trust can own the business, right? I mean the trust can own the business, can control your business. You can control your family and your beneficiaries and your heirs. You can control them from the grave, right?
[00:12:20] Speaker B: Oh yeah.
[00:12:20] Speaker A: So, and then, and upon your passing, because 40 year olds don't die, right? When you're 80 years old, you, you know, you pass away.
The family has a structure. They don't have to worry about all these legalities while they're grieving.
[00:12:37] Speaker B: Exactly right.
[00:12:38] Speaker A: I mean that, that, that's the sweet spot in my opinion. I try to avoid that for my clients. And you bring so much great information to the table. And, and you can have a trust that owns multiple businesses, right?
[00:12:50] Speaker B: Oh, absolutely. I mean you can have it where it's just like it could be the umbrella and I mean, obviously, like I'm sure you advise your clients when they're dealing with, say they own lots of properties and their rental properties or commercial properties. You want to make sure there's LLC or companies that are the holding of those two, you know, basically shield you from liability. But then you can still have the trust that can be the management of it so that you can ensure.
And one of the things that people don't realize, and I advise them at this all the time, is whoever you choose to be your successor trustee in, in a. Because you are ultimately, when you create a trust, whether it's irrevocable or revocable, you're usually the first trustee during your
[00:13:42] Speaker A: life and that's how you keep control of the trust, right? Because a lot of people don't want to give up control.
We're like where you're the trustee, you still maintain control.
[00:13:50] Speaker B: Well, exactly. But also when you have a successor trustee in the event that you're incapacitated or you decide, I just don't want, I, I don't feel like I am willing to do this anymore. I want my successor trustee to do it.
Or if you have say, a very, you know, you want your children to learn how to manage money, how to manage property, how to manage the, the, the assets within the trust, you can even put it where they become a co trustee with you at certain age points.
[00:14:22] Speaker A: Oh yeah, right.
[00:14:23] Speaker B: Because it's a great training tool as well. But as you said, you get to control it. So you get to decide that successor trustee who is most aligned with your principles, most aligned with your business vision, your family vision and to ensure that what you have created will be met at the most best use for your family and for, and for, you know, for your business employees and such.
[00:14:55] Speaker A: So we have to go to break but I want to pick back up this conversation because it's fascinating to me and I have more questions about that.
[00:15:03] Speaker B: Wonderful.
[00:15:04] Speaker A: We'll be right back with more insights, tools and real talk to help you grow your business.
This is Business Forward on NOW Media Television.
And we're back. I'm Joe Reyes and you're watching Business Forward on NOW Media Television. Let's get back into it.
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Prefer to listen online or on the go. Just go to a podcast and go to NOW Media TV and you can get our podcast and listen to us 247 at your convenience. And now back to our next segment to continue our conversation with Alina Gonzalez Dachary, lawyer and estate lawyer, somebody who I totally enjoy talking to. She knows what she's talking about. She's a great example of why you're going to, if you're going to set up a trust or will use somebody who specializes in that world.
And in our last segment we were talking about, you know, what should somebody do like a business owner or parent in the event of their demise or inability to work and you know, they have to continue the business going on, they have to be worried about their property and Children, maybe they have young children who still have to grow up and go to college, hopefully, or a trade or some business or whatever it is. And you can control them, control the situation from the grave. So Alina, you were talking about some really good stuff. And before we move on to our next topic, just want to finish up on our conversation about the trust. And you mentioned irrevocable trust and a revocable trust. And I think our audience would love to hear what the difference is between the two and is one preferable to the other and you know, taken into consideration as a person gets older and they have to consider long term care, things like that.
What in your world of trust do you see as the preferable way to go?
[00:17:28] Speaker B: Well, and I think you can answer a lot of these questions as well and from your perspective as a tax expert. So I deal mostly with living revocable trust. What that basically means is that whether it's a joint revocable trust, you and your partner or your spouse are joining together, creating it or say, you know, singular trust, which is an individual, what a revocable trust means that so long as you have capacity, you are the grantor, that basically you're granting this trust, you're the grantee, which means you are the beneficiary of that trust. And also you're the trust.
You're, you're the trustee, you're the trustor and the trustee. So you're in all hats. And what that basically means is that even if you fund the trust, which means that you are placing assets, bank account, real estate, titled in the name of the trust, bank accounts are in the name of the trust, you have funded your trust, you have absolute control and ownership over that trust, over those assets. So you can still sell it, you can still utilize it as you want.
Also what a revocable trust is, say, I mean, I don't suggest this but like for instance, I have a friend, her, actually it was her CPA that said that her assets weren't of the level that needed a tax break, you know, from estate taxes and such, because we're so high up in the estate tax exemption, at least for Florida, we don't have state death tax, that she really didn't need her trust anymore and so she should just transfer the assets. I know, I rolled, I rolled. I couldn't believe it.
And of course my friend doesn't call me, but because she only had her house and, and you know, investments and her pension and stuff. But because it was below that very high benchmark of the exclusion for estate taxes, that he felt that it would be easier for her if she just rescinded the trust. Revoke the trust. You see, trusts are amend. You can amend your trust, you can revoke your trust. You can, you could do whatever you, what you have in that now. And I think, Joe, this is where you can help me out here, because it's my understanding when you create an irrevocable trust, what that means is you cannot revoke it once it exists. It always exists until certain terms are met for its natural termination. So you do not have the power to revoke it. And I think it's more of like almost like a tax shelter thing, I would think, at least in my, my head. But I would say, like, if you're creating an irrevocable charitable trust where it's an irrevocable trust that the trustees do not have the power to revoke it at any time. It may have certain minimums that will call for and terms within the trust that will naturally terminate upon, say, if it has less than a value of $100,000 or by law, 5,000. If it's less than 5,000, it is something that is naturally to be terminated. But it's one of those. And I guess this is what I'm dying to talk to you about, Joe. You see, this is why I love being a guest with Joe, because of his expertise. So you should know. So if somebody, let's say you have a client, they want to create, along with an attorney, an irrevocable trust, which means that they do not wish to have the authorization to revoke it at any time, nor will their beneficiaries or future successor trustees be able to do it. Is that more for a tax consequence part? Is it for tax shelters also, is it a suitable tool for charitable trusts?
[00:21:24] Speaker A: Well, that's a good and complicated question.
[00:21:27] Speaker B: Yes, it is.
[00:21:28] Speaker A: Whenever I deal with something like this, I use specialists because it's not my in depth expertise. But I would say that if you have an irrevocable trust and it's making money, I don't see how you can get away from paying taxes. However, I will say that you can create a charitable trust, put some assets into it, and then you can get an immediate tax deduction because you're considered as having made a contribution to a charitable organization. You got to make sure you tie all that up and whatnot. But you can create a charitable trust. It's actually a favorite amongst high level, high income, high net worth individuals who, you know, they may have a million Bucks that they just, you know, they just want to get a tax break on. And you can donate it to a charitable organization via a trust and decide on when you're going to get the tax break and things, things of that nature. Super complicated. And we're going to blow right through this segment if we have a lot more of that conversation. So we're going to come back to that one.
[00:22:31] Speaker B: Actually, I thought of one other example.
Say, for instance, you as a parent, create a trust for the benefit of your child. So what that means is you are creating an irrevocable trust so that your child, Susie Cube, you know, Johnny H, Whatever Susie or Johnny is. And so what you decide is you create a trust and it's a great mechanism. It's an irrevocable trust that the children are the beneficiaries. But let's say you, your children want to buy house. Rather than them buying the house, which would then be subject to their creditors, subject to possible division for a divorce, you purchase the trust. That irrevocable trust purchase the, the, the asset, whether it's a home or, or say they buy a business, a laundromat, some, you know, or some other business. The trust can be the owner of that business. The children will be working it, they will manage it, they will be paid by it, but it is not an asset of your children. So therefore, it is like a lifetime asset protection trust in that irrevocable trust. And then what? Again, there's going to be some terminology and natural statutory termination clauses in it, but it really is a great tool in that your children are not the owners of that property or that asset. But yet then it's divorce proof, it's creditor proof.
[00:24:08] Speaker A: A consideration for parents. Right. They don't, they don't want to see the, their holdings go to somebody.
[00:24:13] Speaker B: Exactly.
[00:24:14] Speaker A: Strange. If you, if you will. And yeah, my mother was like that. She was, she was always concerned about divorce and things of that nature for her kids. And so she always told us, you know, and I'm the executor of her state. And she always said, you know, make sure that, you know, nothing happens to, you know, my house and make sure it goes to whatever kid it has to go to.
So the. I wanted to get into a discussion about probate because this conversation about trust is so, is complicated. But this is why you hire somebody like Alina who knows this world, so to speak. And you're teaching me a lot right now.
And, you know, I've been around the block a few times, you know, so, so why don't we just keep talking about trust and not get into the, to the question about probates. Because we're going to get into probate because that happened, that, that applies to a lot of other people. So. But a trust can be used for asset protection because it's private, right? It's not public knowledge that you have a trust. Right?
[00:25:14] Speaker B: Well, and here's the thing is, so when we alluded it to it in our first segment in that a trust is so much more than just after death. Okay, difference between a will and a trust, easiest, simplest description, a will is only effective once you die.
That's it, right. But within a trust, within a trust you can make sure that you are well taken care of. If in the event of incapacitation, Alzheimer's, dementia, disability, what have you, right, that you're taking care of. Also it can ensure a way of taking care of loved ones. Let's say you are what would be normally called what was once a non traditional couple, you are non married, but you are domestic partners. It ensures also that the bills are still paid, that your domestic partner would receive a certain sum of money monthly to ensure that the bills are covered, the mortgages, what have you. But also it's a great avenue to teach and control assets and teach your children for better financial stability, financial mentoring. But also if like say you do have young children, you have to have a trust and in the event of someone who has divorced or someone who has never married the other parent, the parent is the legal natural guardian over the person of the minor, but not the assets.
So like let's just say in the event of a divorce, if, like I would say if I had children with my ex husband, I wouldn't necessarily want him to be the person in charge of, of their inheritance. I would love to claim to name a trustee that would ensure that my children will have the benefiting use of my, of what I have built for, for the benefit and the use as they're a minor, but also when they go off to college, they go, you know, 25, 30, 35, whatever, then they can have it. But also the trust administration, there is a formal process, but it's also informal because it's outside of the court, it's non probatable. What that means is everything is done privately. You don't file, you, you provide inventories to the beneficiaries of the trust, but it's not filed with the court. There is nothing unless there is a litigation that even that, that that trust document is even I love that public records.
Also, when, when you have multiple properties in multiple states, your trustee can handle the distribution of all of those assets and there is no court involvement. So with that trust, if you have property in Florida, you have property in Pennsylvania, you have property in, let's say, Hawaii or wherever that trustee basically just in one area can handle all of that.
So you have a manager of your assets is basically what you're doing. And it's a great tool because we will get into probate, but it really, your. Your private affairs are private and you
[00:28:31] Speaker A: want to, you want to have a trustee that is capable and competent. So, Alina, you're teaching me a lot of stuff and this is really good information. So how can somebody get in touch with you if they want to enjoy your expertise and, and move forward with planning their future and the future of their families and their businesses?
[00:28:50] Speaker B: Oh, it's so simple. So I am a Florida practicing attorney, so I do only practice in Florida. However, you can reach me either my website, life law planning.com not love. Everybody thinks I say love. I wish I could have that. But it is lifelaw planning.com or you can reach me by phone 239-789-2533.
Also, I do have Instagram. So if you find me on Instagram through lifelong planning, you can message me through that. But it's very simple. On my website, I do have my phone number, I have my email, and there is an inquiry button. So you can send an inquiry via the email, which goes directly into my inbox. But those are the best ways. And I do love. This is my version of kind of geeking out. It is because I every day learn something new about trust. And it is a wondrous tool in being able to, to, to do whatever you want.
I mean, like, I have clients that they don't have children, they not married, they, they look at it going, well, I had this money, I had these investments, I have my house. What do I do? You know what they're looking at? Charitable trust. They're looking at what they can do. I myself do not have children. I have amazing nieces and nephews. So they're going to be my primary. But I also have some major charities that I absolutely love and are so close and dear to my heart. So I'm able to plan for them.
And I also am making sure I'm taken care of just in case if something happens to me, you know, so
[00:30:29] Speaker A: we have to go to commercial. We're going to come right back and continue this great conversation.
Be right back. Thank you. Alina, you're informing us a lot of good stuff. We'll be right back with more insights, tools and real talk to help you grow your business.
This is Business Forward on NOW Media Television.
And we're back. I'm Joe Reyes and you're watching Business Forward on NOW Media Television. Let's get back into it.
Hi. So we're back with Alina Gonzalez Dockery, principal of Life Law Planning. If you missed the first segment or two, Alina has 30 years of experience in guiding families and business owners through life's most uncertain legal moments.
In this segment, we're going to be talking about one of the most dreaded words in estate planning and that is probate. And why is it, why are people avoiding it, what is it, what are the benefits of doing it properly, etc. So Alina, so far we've had two eye opening segments. We could have kept on going, going, but we wanted to touch upon the probate situation because so many people do not have a trust and so many people do not need a, need at least a will if they're not going to have a trust.
So it's kind of a floor for the, you know, low hanging fruit, so to speak. So as far as probate is concerned, can you talk to us about what probate is about? How does it work, the advantages, disadvantages?
Tell us about it.
[00:31:59] Speaker B: Okay, so probate is the simplification, simplified word. I think everybody knows. Oh, you go to probate, what that means is you open a formal or a summary administration. You open up an administration of someone's estate and by doing so, whoever is petitioning to be the personal representative or the executor of the estate is in essence what a probate is doing, that is bringing that decedent back through the estate to handle the affairs of the decedent.
Now here are some of the pitfalls.
So let's start off with someone who passes away.
Somebody passes without a will.
What that means is this. Every state has intestacy laws. What that is is somebody intestate means without a will when they die without a will. There is actually a list of how the heirs will be determined. First question for a decedent, are they married? If they're married, are all the children of the decedent from that marriage? It's so easy. The wife, the spouse gets everything. A lot of people go that route. They go, I don't need a will, everything's going to go to my wife. Right.
They just do that. And there are some it's, you know, there are some mechanisms that you can do to get around the whole probate issue by, you know, again, when spouses own a piece of property, when one dies, the survivor receives the property 100%. But what happens when the survivor dies,
[00:33:28] Speaker A: you know, or they both die in
[00:33:30] Speaker B: a car accident, or they both die at the same time. And if they don't have a will? So then, so most people are like, well, that's no big deal, because if my spouse gets everything, that's fine. Or if my children get everything. Or if, let's say you're a blended family, your spouse is your second, third, fourth, fifth spouse, you know, and you have children from a prior relationship or prior marriage. Well, then there's the 50% to the spouse and 50% to the children. Or it goes outwards, it goes down. And then if you don't go down, then it goes up. And if there's no up, which means parents, if you have no children, no spouse goes parents. If not, then siblings. Right? Then aunts, uncles. I mean, they exhaust the family tree. They're literally shaking the branches.
There are some complications with that. Some people are like, okay, there's no big deal.
That's fine. Let the law do it. I don't mind. And, you know, sometimes it's fine, and that's good.
But then what happens if you have children you do not wish to inherit?
What if you have. You have no children, but you don't get along with your brother or your sister, or you don't get along with your parents, and if you die without a will, they're number one on the list to get your stuff, then that's when a will can be very beneficial. Also within a will, again, you can dictate how your things will be distributed. Will it go 100% to your spouse then divided equally among the children? Absolutely. But you can also make specific because bequeaths in that will, what that means is, say you have a very special coin collection that you and one of your children just love talking about and going over. You may want to give that coin collection to that child. Or there's a specific piece of jewelry or an account or a property that you want a cousin to have. You can do that within the will. You can do it again in the trust as well, but you could do in the will. But one of the things that happens, even in probate, even when you have a will within the petition to open the administration, you have to list out all the assets.
That means homestead property, your primary residence, real Estate, property, what are the values? So even though inventories are sealed, you are still giving some general description of the assets that are, are subject to this probate. And guess what, that's open to public records. Right.
And then within the probate at least I can talk about Florida. So in Florida there is a two year statute of limitations for creditors to file a claim against the estate. What that means is okay if you have loans, if you have credit card debt, if you have medical debt, and I assure you the government, if you owe money to Medicaid or back taxes, they're coming after their money. That's the one thing you can never shake them off.
[00:36:22] Speaker A: Absolutely.
[00:36:22] Speaker B: You know, but with that, with, oh by opening in an administration a probate case here in Florida, we do a publication of notice of creditors and we send formal notice to the of known creditors, known credit cards, auto loans, things like that. That shrinks their time period to file a formal claim against the estate. From two years to 90 days.
[00:36:46] Speaker A: That's right.
[00:36:48] Speaker B: Yeah. Oh it's it, it.
[00:36:49] Speaker A: I love that.
[00:36:51] Speaker B: You see and again in Florida we don't have a, what would be known as a death tax, we don't have estate taxes. I believe Pennsylvania has a little estate tax.
[00:37:01] Speaker A: Yeah.
[00:37:02] Speaker B: And like an inheritance tax. New York, other California, other states.
So your subject based on whatever those limits are, depending on the state, you can be subject to taxation on what the inheritance can, could be.
Also one of the like we discussed and we touched upon. One of the downfalls is if you are an individual which I deal with a lot here in southwest Florida, you're a retiree, you got your winter home here in Florida which by the way requires a probate of that property in the county in Florida that it, it, it is located in. But also you have businesses or properties in say New York, Pennsylvania, where have you then your children or your heirs will also have to file a probate to deal with that.
Multiple attorneys, multiple fees.
So that's one of the slip ups. But the probate, if, if, let's say it's an, it's, it's a relatively smooth process. You, you, you, you deposit the will, you, you, you file the petition, you are established as the executor, the personal representative. You receive the letters of administration which basically, basically is authorization that you as the representative of the estate have full authority to ascertain what the assets are, gather the assets, sell assets if necessary, and then distribute those assets and also pay any creditor claims that. And then once all of that is done, all the creditor Claims are paid, the tax returns are done. Because you do have to do tax returns on behalf of the estate. That's why you hire CPAs like Joe.
[00:38:44] Speaker A: Right.
[00:38:44] Speaker B: Then you can close it out. But there are so many pitfalls that could happen.
Like, for instance, I have a client that, unbeknownst to her, she's the personal representative of a relative's estate. It's not her parent, but it's a relative. Unbeknownst to her, the relative didn't pay the property taxes a few years ago.
Exactly.
I love that face. Because that's what it is. Because then what ended up happening was the back taxes. After so many years, somebody bought that tax certificate, and then they asked for a d. A tax deed. What that means is that the property would be without a foreclosure.
With that, all you get is a notification that this property is subject to a deed sale and it's going to be auctioned off. And guess what? It happened.
It happened where?
[00:39:36] Speaker A: House.
[00:39:37] Speaker B: The house got sold off in an auction, and that was the main asset of this particular probate.
And there was nothing we could do. I wasn't the main attorney on that probate. I was representing one of the relatives to ensure that they got their due because it was a. An individual who died without a will. And it was.
You had to follow the tree, the limbs, the roots down to who got it. But the individual who was.
They didn't realize that that's a house.
[00:40:09] Speaker A: What about a company? What if you own a. You're so proprietor. You own a business that's making money and you die. You don't want.
[00:40:16] Speaker B: Oh, and that's a mess because. Well, again, if it's like I have a client that the. The. The father passed away, he was very adamant to. To not follow advice that to. To place the LLCs in the. Within the trust or to have the. To. To. To transfer the LLCs into the name of the trust so the trustee could continue it. So what happened was he had two businesses, one in New York and one here in Florida.
Well, she has to open up a probate in. In. In New York, an ancillary probate, because the formal administration's here. But then she has to be appointed as pr. But then she has to get the letters of authorization to be able to answer, to access the accounts for the business, to pay the bills of the business. But then on top of that, because it's one of those regulated businesses that only a licensee can manage it, she has to ensure that there's a licensee in charge of it. And it's a bit of a debacle because if not, that business just sits there and it's, it's accruing, it's not servicing its clients and being lost. And then you have a lot of mess, you're cleaning up a lot of mess, which proper planning, again, that ounce of prevention could, could allow.
[00:41:37] Speaker A: This is why probate is such a bad word, right? Because if you didn't do the planning and you enter the, that environment, that world, what a fiasco, right? What, what, like you said at the back, what a mess. And then, you know, it didn't have to be that way by just some simple planning with an estate attorney such as yourself, you avoid all that and money is saved and, you know, your wishes for your loved ones continue on and, and I can understand why people don't want to deal with it, but what you're leaving behind is far, far worse than having to deal with the short term inconvenience of creating a will and whatnot. And so any last words? We got 30 seconds. Any last words?
[00:42:21] Speaker B: Also with a little bit of proper. Because here's the thing is so probate, people think people have, you know, of course, movies and stuff, you see some crazy things happening. You're like, oh my God. But it can happen, especially if you have family members that don't get along or distrustful that causes some links to, but also maybe for another time, like the individual who writes his own will.
And then you have family members. Oh, this happened. And it was a lot, I mean, I know what my fees were funny. And because what happened was it opened the door for a, a, a contested probate.
So then we had that estate, had to pay a lot of money for me to defend the con, to defend the estate, to defend the will, the legitimacy of the will. But, and I know that it was apparent the parent paid a lot of money for their attorney to attack the validity of a homemade will.
And what ended up happening, we were able to settle it, but what ended up happening was the beneficiary, which was the domestic partner, again, not married. So there's no actual legal protections like they are for spouses, for, you know, legal marriages.
She ended up losing over half of her the estate.
[00:43:43] Speaker A: That was, you know, I want to, we're going to go to commercial. I want to pick back up on that and then talk about one last topic. But this is an important piece of information that we want to share with our audience. We'll be right back. We'll be right back with More insights, tools and real talk to help you grow your business.
This is Business Forward on NOW Media Television.
And we're back. I'm Joe Reyes and you're watching Business Forward on NOW Media Television. Let's get back into it.
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Now Media TV and from there you can listen to all kinds of business news, regular news, cultural things, life, everything in between. And so now media TV is streaming constantly 24. 7. So let's get back to it with Alina Gonzalez Dakri, a true estate and trust attorney and real pro, somebody that you really want in your team to help you plan as a business owner, as a parent about the next next stage of your life, which is controlling your family, your friends and your business from the grave. So, Alina, thank you for all this great information you've been giving us. Let's get back to it. We were talking a few minutes ago about a contested will and we'd love to hear more about that. And then maybe we can get into what happens when, when you're incapacitated and you're not dead.
[00:45:48] Speaker B: Okay. So it was, it was actually a really fascinating case. My position was this individual. So this individual decided based on circumstances that were going on in his life and other people getting sick and such like that, he decided, you know what, I should get a will. But he didn't like attorneys, not trust him.
So he and his friends were out at their local bar and he was talking about how he needed a will and he was about to pull out a napkin, literally start writing down his thing.
And one of his friends was like, wait a minute, let's go back to my house, I'm going to type it up. Because we need two witnesses. You need to sign in two witnesses. Now that's very important because for a will at least I can say definitely in Florida. But it's usually uniform for the most part throughout the US For a will to be valid, it's not a notary stamp that makes it valid. It is valid that you sign it in front of two independent witnesses.
So they went and they typed up a very simple, I, Joe Blow, being of sound mind, devised my property and my assets as such. And he listed it. And he goes, I'm done. This is how it is. I'm dead. Follow my rules. He signed it, and his two friends signed it.
His family, more particularly his father, contested that will because everything, for the most part, was going to his girlfriend or his living girlfriend. And they had a lovely, I would like to say, Everybody Loves Raymond type of relationship, where it was kind of contentious and stuff, but yet they were together for a long time. But he wanted basically everything with certain. With the exception of certain assets to go to her.
So by his mistrusting an attorney, by taking that little ounce of prevention, by basically stating that he intentionally left his father out of the will or his. And a sibling out of his will, if he could have stated all this in a properly duly written will, that would have also had a self. Because here was the other thing is because he just signed it and there were two witnesses, we, in order to ensure that that is a true signature and test, each of those witnesses also had to file affidavits when we were opening the probate.
[00:48:18] Speaker A: Okay?
[00:48:19] Speaker B: So it was a very long, arduous process. There were a lot of attorneys fees and cost because there were experts, there were mediators and such. But then what it ended up was what his intention was for his girlfriend, his longtime partner, to obtain all of this property and assets and to ensure that she was taken care of, that she would be taken care of. She had a roof over her head. She had rental income. She had other things. She ended up losing half the assets, basically, because we did. We did come to a mediated agreement.
Now, personally, I think I would have gone, first of all, they, they. They attacked the legitimacy of the will. And I think it was definitely, yes, there was two witnesses. It's legitimate. Then they were trying to attack whether it was a forgery. And there was no way, I think, that we had, that one of the friends was a very good friend. She would lie to both of them. But the other one really was that close of a friend. So. So I think. So I personally, if I were on the other side, I would have attacked the state of mind, whether he was a sound mind because.
[00:49:30] Speaker A: Or drunk.
[00:49:31] Speaker B: They were drunk. I mean, they were known to get plastered. And let's not go into other recreational stuff that they like to do.
But it really goes back to that ounce of prevention, because what ended up being pretty probably the equivalent of, I think between opposing counsel, myself. Oh, and on top of that, an attorney acting as a personal representative. You had over your. The attorney's fees alone were in the six figures.
So, you know. Yeah, the attorneys made out. Now, here's another thing. Let's talk. Let's go back to like that little ounce of a prevention trust ensured that you could be taken care of in the manner in which you wish to be taken care of and that the finances are there. And in the event of incapacitation. What does incapacitation mean? Dementia, Alzheimer's, you're having memory issues or you, you, you, you have cancer and it's end of life and the treatment and stuff so that someone can jump into your place and ensure that you're. You are taken care of, your loved ones are taken care of. I'll use my father and my mother. They've been married 65 years. My father has told us unequivocally, and he has a trust. If something were to happen to me, your mother stays in the home. You hire the nurses that she needs. You ensure that she even put in the trust that she gets to go to the beauty salon once a week and get her hair done, that somebody come to the house to do her manicure and pedicure, that he wanted to make sure that her life was very taken care of in the manner in which she was accustomed.
And, and, and, and that's important because if he, if my parents didn't have a trust and something were to happen to my dad and my mom is incapacitated, we would have to then go to the courts and ask for a guardianship, a guardianship over the person or at least the assets. Because yes, there's a power of attorney, but the power of attorney only goes so far.
You had to get that. And then you are required to file inventories, accounting every year. And if you have, let's say, have to do a major repair to a home or something, you have to ask the judge for permission to spend money to fix a house or to obtain a.
[00:51:50] Speaker A: Bottom line is create a trust.
[00:51:52] Speaker B: Create a trust.
[00:51:53] Speaker A: Right. Control everything by a trust. So we can go on and on and almost at the end of our time. But Alina, thank you for this great conversation, this great input.
Again, if somebody wanted to reach out to you and pull the plug and do what they have to do to protect themselves, their families, their businesses, how can they reach out to you?
[00:52:12] Speaker B: They can find me on my website, lifelawplanning.com that's L, I, F, E, L, A W, P L-A N N I N G.com you can also call my office, 239-789-2533. I am also on Instagram and Facebook.
You can look up Alina Gonzalez Dockery or lifelong planning and send me an im.
But one of the easiest ways is go to the website. There are inquiry. You can send a message to me directly or you can call my office. We love to talk to people and educate them because it is about your legacy, your ability to take care of yourself and your family. You built this. You're living the dream and you want your family members and your loved ones to benefit from it. And this is one of the things that we do well.
[00:53:02] Speaker A: Thank you. I hope everybody would just give you a call and take care of such serious business. You and I are kind of in the business and we know what the catastrophes look like and we want to help everybody possible to not go there. So thank you for this great advice.
Thank you for what you're doing for other people and businesses and out to our audience. Listen to Alina. She knows what she's talking about.
I can tell you that if you do it right, you save your family a lot of grief and aggravation. And if you have a business partner, you're going to save them and their families a lot of grief and aggravation.
And so this is Joe Race with Business Forward. Thank you for joining us and keep building your business and keep on moving forward. Have a great day and see you next time.
[00:53:49] Speaker B: This has been a NOW Media Network's feature presentation. All rights reserved.
