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Greensfelder's Andrew Mitchell and Garry Reuter join Brett Gilliland on the Circuit of Success
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Greensfelder Officers Andrew Mitchell and Garry Reuter, Jr. recently talked with host Brett Gilliland on “The Circuit of Success” radio show about why estate planning is important for everyone. The interview covered what to expect when creating your estate plan with an attorney, how planning can protect your interests, and what happens if you die without a plan. Listen to the interview for more on their thoughts including:
- Why it’s important to plan not only for what happens to your assets when you die but also what happens if you are incapacitated.
- What it means to have financial and health care powers of attorney.
- Why relying on state laws about what happens when you die without a will probably won’t cover your wishes.
- How estate planning can address your desires to donate to charity or pass your business on to the next generation.
“The Circuit of Success” airs on KTRS in St. Louis and is hosted by Gilliland, the co-founder of Visionary Wealth Advisors. The show aims to highlight tips and personal stories that inspire success in all aspects of life.
Full transcript below.
Gilliland: Welcome to the Circuit of Success. I'm your host, Brett Gilliland. And today we've got with us in the studio here, Andrew Mitchell and Garry Reuter. How are we doing, gentlemen?
Reuter: We're good.
Mitchell: Excellent this morning.
Gilliland: Awesome. Well, it’s good to have you guys. These are our friends from Greensfelder, Hemker and Gale, a law firm here in St. Louis, Missouri, offices in downtown St. Louis, Belleville, Illinois, and also in Chicago. So it's good to have you guys in the studio. We're going to talk a little bit about estate planning 101. What are the basics? But first, what I would like to start with, Garry, is tell us a little about Greensfelder, Hemker and Gale. Who are you guys?
Reuter: Sure. Well, as you mentioned, we're based here in St. Louis. We were founded actually in 1895, so we've been around awhile. We serve clients throughout the Midwest as well as nationally. As you mentioned, we've got three main offices in Illinois and Missouri side. Our St. Louis office is downtown St. Louis, right across from Ballpark Village. We have a Belleville office, in Southern Illinois that serves our Southern Illinois clientele. We also have a Chicago office.
Gilliland: Nice. So I know if we sit in Busch Stadium, we can look out and see the nice Greensfelder sign on the building.
Reuter: It's kind of hard to miss up there.
Gilliland: A lot of good pictures with that stuff. So, Andrew, if you could, tell us a little about your full-service law firm. What all do you guys do?
Mitchell: We have attorneys that work in a full range of legal areas including litigation, construction, health care, energy, and we have a strong corporate practice as well, in addition to our trusts and estates group.
Gilliland: So I know you guys work in the estate planning and do a lot of corporate work and LLCs, S corps, and that’s going to be on future shows that we're going to be talking about. But Garry, if you can talk to our clients, give us the high-level view of really what is estate planning 101? Because I know at our firm, Visionary Wealth Advisors, we work with clients every day and sometimes they'll say, “You know what, I don't think I need an estate plan. I'm not worth 10 million or 20 million bucks.” But tell us, why is that wrong?
Reuter: I think that's one of the biggest misnomers in our estate planning world. The truest and simplest answer is everybody needs an estate plan. One of the big reasons for that is it's planning for your future, and unfortunately, it's a future where you may not be here, but it's making sure you're covering and taking care of your loved ones and the people behind. There's two main things that you want to tackle with an estate plan. Number one, it's planning for the event of your incapacity. The other is, obviously what everybody kind of thinks of, death. And what do you want to happen? Where do you want your assets to go after your death?
Gilliland: So let's talk about that for a second. Andrew, dive in a little bit more into that. So incapacity, why is that such a big deal? Let's say I'm in a car wreck, I'm in the hospital. These are terrible ideas, right? But let's say that I'm in the hospital, I'm in a coma. What happens?
Mitchell: This is one of the essential elements of an initial estate planning meeting. We're talking about incapacity and most people don't think about that whenever they're coming to estate planning, they're just thinking about death. But incapacity, if we don't plan properly for incapacity, then essentially you're going to end up in court and spending more money. For example, if you cannot make your own financial decisions, no one can make those decisions for you unless they're either appointed by a court or you have a durable power for financial matters that names an agent to make those decisions.
Gilliland: Yeah. And I think that's a big deal, too. I was just actually talking to my dad about this the other day and you know, fun stuff to talk about with your dad, but if somebody goes in and maybe I have a financial power of attorney, but I don't have a health power of attorney. So talk to us about that, Garry.
Reuter: Yeah. So a health care power of attorney is where you designate an agent who's going to make medical decisions for you. So you used the example of being in a coma. You're in a hospital bed, cannot make decisions for yourself. A durable health care power of attorney is where you can designate somebody who will make those decisions for you. I think most hospitals you're going to find they're going to talk to family members and try to get some guidance, but it's the health care power of attorney where they're normally really going to turn to, to give somebody authority to make those decisions for you.
Gilliland: Yeah. So then talk about the death side of that. We talked about the coma, but now, unfortunately someone passes away. Why do we need an estate plan?
Mitchell: Well, the state will write an estate plan for you. There are laws in every state that are called intestacy laws. So that means you die without a will. There are specific ways that your assets go, according to that statute. And if you don't like that, then you need to have your estate plan. And in particular, single people, if they die then their money's going to go to their siblings and their parents.
Gilliland: I think that stuff's important, too, because it's really the planning side of that, right? I know my wife and I did it. It's not fun to talk about, but it's things that you got to go out and do. Right? Like if, if I were to pass away, I've got four boys, do I want to give an 18-year-old kid money. Right? And so, I know in ours we've got it set for like 25 and 30 and 35 in different stages, but don't you think that planning, Garry, goes into it and it's really, really important?
Reuter: Yeah. Setting up your estate plan is your way to kind of safeguard those. You look towards the future and while, yes, it's an uncomfortable thing to think about. You’ve got to think about what if that scenario happened, what would the picture be? You pointed out giving kids a bunch of money at 18 years old, maybe not always the best idea. I would have had some good college spring breaks if I had a bunch of money. So it's a way for you to kind of look to the future and structure things in a better way to A: it's going where you want it to go and B: doing it in a way that's going to protect the people that are getting that money.
Gilliland: So I know obviously I get with financial planning clients, we see it and we hear it all the time as do you all. But what happens without an estate plan, Andrew, what happens to the assets? You know, you hear the word probate, I don't think a lot of people really understand what that is. So what happens?
Mitchell: Essentially what you're going to end up with are court processes to take care of things that you can do outside of court if you have an estate plan. I will say one misunderstanding or misconception about a will is that a will does not help you avoid probate. In fact, it's meant to go through probate. What is probate? It is a court process by which a decedent, a person that dies, his or her assets are administered and given to his heirs or legatees in a will, so the state writes your estate plan for you and that will pass through probate if you die without a will. If you have a will, then that will go through probate. Oftentimes our clients use revocable trust to avoid probate. There are other probate avoidance techniques as well, and that can help you avoid the court process and extra court costs and fees to dispose of your assets.
Reuter: One other point about probate, and Andrew had mentioned intestacy, which again is the statute that says it's basically a default estate plan that the state sets up for you if you don't have a will or other documents in place. I would bet that if you took a poll of most people and you said this is exactly how it's going play out if you don't have a will or anything like that, over 90 percent I bet would not agree with that plan. So setting up an estate plan is your chance to customize and make sure things are set up the way you want them to be.
Gilliland: This is as little as even as where does a certain watch go or you know, your grandma's ring or whatever it may be.
Reuter: Absolutely.
Gilliland: So, let's talk about this for a second. I think most people would have believed that if I pass, everything just automatically goes to my wife, true or false?
Reuter: Without a will, that is a false statement. Again, if you're talking about intestacy laws, it varies from state to state, but if you're talking Illinois or Missouri, you're basically looking at half of your estate going to your surviving spouse. And then the other half, if you have kids, would go to the kids. So it doesn't all just go to that person. If you don't have kids, then yes, that could be true. But again, you want to look at things depending on the state you're in and what laws there are. You want to look at that and make sure, is that the way it is? And again, I think Andrew and I would both say there's better planning you can do then just letting it all go to that person.
Gilliland: Yeah, because I mean, I was one of them before I really got into this business, I just assumed everything would go right to the spouse. And I think a lot of people probably listening feel that same way, but there again, it's not true.
Mitchell: And even if you want a half of your assets to go to your children, which is an uncommon plan, even if you want that to happen, if you have minor children, then for those children, a court process will have to be set up in order for those assets to be managed for those minor children. And that will be supervised by a court until those children turn 18.
Gilliland: So let's talk about that for a second. You hear about guardianships. So Andrew, tell us a little bit more about that and why those are so important.
Mitchell: Sure. Well, first of all, a married couple that has minor children or any person that has minor children, need to name guardians in their will. That's the place to name them so that if they die someone can take care of the minor children. Otherwise there's an order of preference based on family and they can come in and the court will decide who is the most fit. So if you want to name your guardian specifically and you have a person in mind, you should name that. With respect to assets, you also want to name someone to either manage assets for a minor child under a trust or custodian account. If you don't do that, then as I said, a court guardianship will be set up and that's supervised by a court, there are annual accountings. The investments that you can make in that account are very limited and it will not be terminated until the child turns 18.
Gilliland: And so, Garry, let's talk about the documents. There's a lot of things that people hear about out there, but what are the crucial ones we need to make sure we have for our estate plan?
Reuter: Sure. When we have a client come in, there's probably a core set of documents that we’re typically working with and looking at. First, we've already talked about, is a will. An alternative to that or a complement to a will would be a revocable trust. Plans that Andrew and I draft a lot for our clients, usually heavily involve or are centered around revocable trusts. And I know we're going to talk about that in another show sometime in the future, too. Two other documents that are very important are the durable powers of attorney that we've mentioned a little bit ago. A financial power of attorney, where you name a person or an agent who will make financial and legal decisions for you if you're incapacitated. The other is a health care power of attorney, which you name an agent to make health care decisions for you.
Gilliland: If I could interrupt real quick to go back to that financial power of attorney, that's a big deal because if say something, God forbid, happened to my wife. I can't just walk into the bank and start talking about her assets and stuff.
Reuter: Right, unless she's actually on the account or sometimes you have signatory rights on an account, then that works. But if you've done nothing like that and the account is just in Brett's name, your wife is going to have problems in the bank. If most banks are doing their job, they're not going to give her access to that.
Mitchell: I have something to say there on putting other people on your account, bank accounts. People commonly believe that's a good idea to A: allow someone to manage the account for them and B: to avoid probate. Both of those things are true, that can happen. But, what they may not realize is that that joint account owner is a legal owner of the account. And if you die, if the person dies that designated the joint account owner, that new joint account owner now owns the account and it's their money. And even if you want them to distribute it to other people at your death, they can't do it without potentially gift tax consequences.
Gilliland: So, Garry, I interrupted you. You said wills and then trusts and you had a couple of other things.
Reuter: Well, the powers of attorney, and you had mentioned the financial power of attorney. I think the health care power of attorney, we've talked about its importance already, but there are usually two features to it, also. Number one I mentioned, you're naming an agent to make health care decisions for you. The other part is what people know as a living will. And that is your chance to express your wishes on what you would want to happen if you're in a situation where, I usually describe it, you basically have a machine keeping you alive with no real hope of recovery. Many people are kind of “pull the plug” type people, but it's your chance to put in writing as to what you would want to happen, whether it's the agent making a decision or the physician in charge making the decision if you were capacitated and had the mental ability to tell them what to do. That's what the living will does. It expresses your wishes for that.
Gilliland: And so a lot of people think, well, I'm not worth $10 million. I'm not worth $20 million. I don't need estate planning. Right, Andrew? That's what people think.
Mitchell: That is what people think. And it's untrue. Obviously we've covered a lot of the reasons why you want an estate plan. Most of it is to avoid expensive court processes. But I will say this as well. I think the hardest thing for a client to do with respect to their estate planning is prepare for and have an initial meeting because they're thinking about incapacity and death. And I'm there to talk about incapacity and death. We were talking the other day about, the person that comes to your house to put down your pets. You don't necessarily want that person to be involved in your life, but there are times when it's necessary and that's what a client coming to their first meeting with me probably feels like about me. But it's a necessary thing to deal with.
Gilliland: So let's talk beyond the basics. So we've talked about your wills, your trusts and the importance of that stuff, but Garry, tell us a little bit about charitable planning and how that's beyond the basics and some things we can do there.
Reuter: Well, another aspect of our practice is, it kind of ties in with some of the tax planning we do, but a lot of clients come in and have charitable endeavors or charitable ideas in mind and they want to give their money away to an important cause to them, something that's special to them. So we incorporate that a lot and it can be incorporated in your estate plan. It can sort of be its own standalone or set aside project if you want to make special gifts or planning while you're alive. We do a lot of planning with that where you can kind of design a strategy, whether it's a one-time gift or multiple gifts or you're making a pledge to a university or something like that. We work with clients on that a lot and that can be an important aspect of estate planning as well.
Gilliland: So talk to us a little bit about business succession planning, Andrew.
Mitchell: Sure. Many people, when they're running a business, especially an entrepreneur or a solo person that runs their own firm, they're busy making money. And they're busy making new clients, and they never stop to think, what happens if I pass away or I become incapacitated with this business? We're there to help give them advice. I heard one really good, general advice, and this is not specifically legal or technical, but the best way to run your business from a succession standpoint is to run it like it's going to be sold tomorrow.
Gilliland: Yeah. And I think unfortunately sometimes without a succession plan, those are the things we do see. They are sold tomorrow at a fire sale. And I know we're going to talk more succession planning in December. So look forward to that here on the big 550 KTRS. But let's talk, Garry, about the process. What can somebody expect from this process?
Reuter: So how it usually starts, we'll sit down and we'll meet with clients. And what I think every good estate planner needs to do is sit down and ask the questions, get information, find out who the client is, what's their family situation, what are their wishes and desires out of this process. So we usually sit down and we interview, we talk through things, we give them a little feedback based on our experience through dealing with hundreds or thousands of different estate plans. Every person's situation is different. So you need to listen to the client and they should expect questions from us and we certainly expect questions from them because that's going to help us shape the best plan for this particular family or client.
Gilliland: So when you think about that, though, is it one meeting? Is this five meetings? I mean, how many hours is this going to take me?
Reuter: It can really depend, because again, every situation is so different. I'd say on average — Andrew, would you agree? — we have one initial meeting where we can get a lot of information. We get things put together; we send drafts out to clients. And then probably one more meeting to answer any questions and actually sign the documents. It can be more depending on the feedback from the clients and the questions they have. But I'd say probably at least two meetings, sometimes more if necessary.
Gilliland: And I think a big thing too is that, and we talked to our clients about this, is attorneys can't make outbound calls to get this stuff done, right. So there's so much responsibility that falls back on that client that they have to take the initiative to do it. We can give a name, we can say, hey call, these guys they’re great guys. They do good work, but at the end of the day they still gotta make the call.
Mitchell: Right. I want to stress the importance and the helpfulness of a team approach because as attorneys, when we're in that initial meeting, which may be an hour, an hour and a half, obviously we're not going to know everything that's ever happened to this client or every fact that might be relevant. We're going to try to gather that information, but we can only advise on what we know. And so when, for example, we work with that client's financial planner and accountant, then we can really know a lot more about the situation going into that meeting and give better advice because of it.
Gilliland: And what do I get with this? It looks like I'm looking at the list here and the things I know, the process I've gone through with estate planning, but what do I get with my estate plan?
Mitchell: Peace of mind.
Gilliland: Which is good. Some little peace of mind, but you know, you guys talk about the safe deposit box. I know the binders that you guys do, you record the deeds, because that's a big part of it, too, is you can give me an estate plan, but if I don't actually put something into the estate plan, i.e., my house is owned by a trust or the bank accounts, bad things can happen.
Mitchell: Right. Obviously the documents that we draft for you and you sign, you're going to get that. You're going to get a binder and some originals of those there — because of antiquated rules, there's only one original will. So we can either keep that in our safe or you can keep it. You're going into deeds, if there's trust funding or new titling for real estate, then we will help you record deeds and we will give you copies of those. An important piece that many people miss when they're not dealing with an estate planner or a financial planner is beneficiary designations for life insurance and IRAs. Many people set up these accounts for the first time and never look at the beneficiary designation again. That more than likely is not going to be consistent with your estate plan after you talk to an estate planning attorney. So we'll help you update those and then give you copies of those.
Gilliland: Got it. Garry, here's the million-dollar question. What does it cost? Everybody wants to know that, right?
Reuter: Sure. And that is the million-dollar question and I'll give you the lawyer answer: It depends. It really does. Only because the way at least we approach it at Greensfelder is every person in every family that comes in to do an estate plan is unique, and we take it that way. I will say generally speaking, while most lawyers are kind of, you know, billing hourly and timely, we're not much different, but a lot of our plans and projects tend to be a little bit more flat-fee-based when it comes to putting an estate plan together.
Gilliland: Got It. Yeah. And I think it depends on the level.
Reuter: There's a full spectrum of people's needs and what their wants are. And so anytime we sit down, by the time we're done with our initial meeting, I know we'll be able to tell them, give them a really good estimate as to what we're looking at.
Gilliland: Got it. So how do I find more of Garry Reuter and Andrew Mitchell? Where do we find you guys?
Mitchell: Greensfelder.com is a good place. We're on LinkedIn. We’re on Facebook.
Gilliland: Absolutely. So, if you guys need estate planning out there — I think everybody needs that, we just heard that — please reach out to Andrew, Garry and myself. We can introduce you to these guys, g et you all connected. They do great work. Again, they're on the Missouri and the Illinois side and then if, yeah, if you're up in Chicago and happen to be listening they can help you out there as well, but probably anywhere all over the nation. Right?
Mitchell: That's true. We are part of a network of law firms called Meritas, and I serve on the steering committee for the United States trust and estates practice group. So we have access to estate planners in every state in the country.
Gilliland: Nice. Good information to know. Gentlemen, it was great to have you in the studio with us today. Thanks for joining us on the Circuit of Success.
Reuter: Appreciate it. Thank you.
Mitchell: Thanks, Brett.