Below please find the transcript for the Wealth Matters Podcast available on Bradley’s biography page.

Craig Frankel: [00:00:11] Hello and welcome to Wealth Matters, where we discuss the opportunities and challenges of preserving and managing wealth. This show was presented to you by Gaslowitz Frankel, a law firm dedicated to resolving disputes involving your wealth, whether through your will, your trust, your business, or your investments. For news, pictures, and tips, go to our website at gaslowitzfrankel.com or follow us on Twitter, @EstateDispute. Our show’s hashtag is #wealthmatters. Your host today are Robert Port and Craig Frankel. And today, we’re talking about spring cleaning your financial house.

Robert Port: [00:00:45] And now it’s time to introduce our guests. We are pleased to have with us today Bradley Hilton, Financial Advisor with Modera Wealth Management LLC, and Laura Akins, Associate Attorney at Nadler Biernath LLC. So, first, let’s have our listeners find out a little bit about you. Bradley, why don’t you give a brief description about yourself and your particular firm’s practice area?

Bradley Hilton: [00:01:10] Yes. Thank you, Robert. My name is Bradley Hilton. I’m with Modera Wealth Management. We are the only regional or registered investment advisor located here in Atlanta, Georgia. But we have five offices along the East Coast.

Robert Port: [00:01:24] And Laura.

Laura Akins: [00:01:25] I’m Laura Akins with Nadler Biernath. And we’re a specialized law firm that does estate planning and probate work. We run the gamut of estate planning, but we specialize, specifically, in elder law and special needs planning for people with disabilities.

Robert Port: [00:01:42] Well, thank you. Our topic today is spring cleaning your financial house. So, when thinking of how to delve into this topic, I thought it might be a good idea to ask each of you what you do when a new client comes along. What do you ask them as your initial questions to get the checklist, as I see it, of what you need to know, so that you can make sure their house is in order? Laura?

Laura Akins: [00:02:06] Our first question for clients is always, do you have a will in place? Do you have powers of attorney in place? Where are they? Ad what do they say? So-

Craig Frankel: [00:02:16] Can anyone actually answer those questions?

Laura Akins: [00:02:19] Often, they can because we send intake forms out to remind you. So, that’s always going to be a question when people come into the office. And frankly, very few people have that sort of situated on their first go round with us. So, part of the spring cleaning is, usually, actually, setting up those documents and thinking about who you want to put in place for your different designations and so forth. So, that’s, usually, the first thing we ask is, what documents are in place?

Robert Port: [00:02:51] And do people generally have access to those documents? Are they able to actually locate them and bring them to you?

Laura Akins: [00:02:58] Right, occasionally, occasionally. People often put them in safe deposit boxes thinking, “Oh, this is the perfect place because it’s protected, it’s out of the house in case of a disaster, and it’s one central location.” But the problem is that you have to have access to a safe deposit box. So, what if mom puts her son on as a designee, and then her son dies, and then mom dies. How do we get mom’s documents? So, you have to think about that.

Craig Frankel: [00:03:29] I have a trick. I have a fireproof lockbox in the house with the key in it. I’m not worried about anyone stealing anything. I’m worried about the documents being accessible or catching fire. So, I have them in an easy-to-find place that everyone knows where it is, but it’s a fire box.

Laura Akins: [00:03:47] I think a safe box in the house is the best option just for practicality, as long as you tell your executor or whoever you’ve designated to be responsible for these things where they are and how to get into the safe. Again, that’s added to the list of those online passwords, which I know we may be talking about later – the list of your lockbox password.

Robert Port: [00:04:11] Right. Now, Bradley let me ask you the same question. When you get a new client, what do you do to make sure or see if their house is in order? And then, beyond that, what you need to do to help them to get their house in order?

Bradley Hilton: [00:04:24] That’s a great question.

>Robert Port: [00:04:24] Thank you.

Bradley Hilton: [00:04:26] Robert, generally, when someone comes in to see us, our first question is, “Why are you here to see us? What’s brought you in here?” It’s generally triggered by-

>Craig Frankel: [00:04:32] I mean other than Wealth Matters Radio Show.

Bradley Hilton: [00:04:36] Other than this outstanding podcast and radio show, yes, they generally have a reason they’re seeking us out. And oftentimes, they’ve come to us by way of referral, or they’ve found us by looking through the net for fee-only firms. So, oftentimes, we’ll see this triggered by one or two things, usually a milestone in their life. That would be life, death, marriage, starting a family, adding to the family, retirement, disability, purchase of a business or practice, sale of a business a practice, some big life event or some big wealth event. Inheritance is another big driver. Oftentimes, as well, they’re getting to other milestones in their life – retirement or there’s reaching certain ages where questions arise.

Craig Frankel: [00:05:23] And I like your choice of words. You say milestones I’d like to say life cycle events because any life cycle – birth of a kid, great celebration, graduation from kindergarten, things that change your family’s situation are times to think about things.

>Bradley Hilton: [00:05:36] Absolutely. And you need to be, sort of, hopefully, thinking about those ahead of those events and coming in seeking out the advice that you may need or maybe just bouncing questions off of us. We’re here for several reasons. We can help guide our clients and help advise them for these life milestones, and their goals, and towards their goals. But, also, sometimes, people just like having a second set of eyes.

Robert Port: [00:05:56] So, let’s follow up on that. I asked generically about new clients but are their differences between, let’s say, couples, divorced folks, same-sex marriage, things like that. Laura, talk about that a little bit in terms of trying to understand what their financial house looks like from your perspective.

Laura Akins: [00:06:15] Yeah. In the general scheme of estate planning, people have a lot of expectations about come into the office. They need to have everything ready to go. But frankly, every single client has a different set of circumstances that we have to look at in determining what’s the best course of action moving forward.

Laura Akins: [00:06:32] So, certainly, a couple would look different than a single person because who do you leave things to if you’re a single person, generally speaking, though not always. With a couple, you have a sort of a default person that you’re going to designate for a variety of different functions.

Laura Akins: [00:06:47] But everybody’s got different circumstances. And I think that really, sometimes, stresses out a client. And it’s overwhelming to come talk to a lawyer or your investment manager or your financial manager about what your plans for disaster, and death, and your general money situation are, but everybody’s so different. And so, divorce, certainly, would play a role. If you’re contemplating divorce, well maybe we don’t want to put spouse in place as your default.

Craig Frankel: [00:07:19] And let’s note that for our listeners. If you’re thinking about divorce, please go see your financial planner and your estate planner then because there are some pre-divorce techniques that you need to do before you go into divorce. And one of those is you’ve got to know what money you have. And the second is make sure you know what your beneficiary designations are because during the pendency of the divorce, in Georgia, you can’t change title.

Laura Akins: [00:07:46] Right.

Robert Port: [00:07:47] Let me let me touch on something with you Bradley that Laura referred to, which is people’s hesitancy I’ll call it to deal with financial matters. We did a show recently where one of our guests who does divorce work said that her sense is that many women, divorcing women, would rather talk about planning your funeral than planning their financial situation. So, can you comment on that?

Bradley Hilton: [00:08:14] Yes, it’s an interesting observation. And I actually don’t have a reason for why people are so hesitant to talk about their financial lives when you compare it to all the other things that they’re willing to open up on. But when it comes to your financial spring cleaning and taking care of your financial life, Robert, you’re a cyclist. You regularly, I assume, periodically maintain your bike. And that would be wrapped around either a big event. You’ve got a big hundred miler coming up, or you’re just out there, and you want to be at the peak of your performance.

Bradley Hilton: [00:08:43] Well, we should all want the same thing for our financial goals. You want to look at everything periodically. We want to find out what are your goals, what’s important to you, and then what happens if something disastrous goes on tomorrow. Are we covered for that? Same thing as if you were spring cleaning your own home. You can’t get to everything. Let’s figure out what’s important to you, and let’s figure out what has to be taken care of this year. And then, maybe next year we’ll take a look at something else.

Robert Port: [00:09:11] And let’s touch off on that. The reason we chose the word “spring cleaning” is this is the month after tax season. And if you’re going to do any tax planning, you’ve got to think about it in advance. So, someone comes into you, Bradley, and says, “Here’s my smorgasbord of things. Here’s what I think I have, and here’s what I don’t think I have.” And you say intelligently. “Show me your documents because I know whatever you told me is wrong. And now, let’s think about what it is that you have.”

Robert Port: [00:09:38] So, kind of, tell us, if you can, what are the things that people should be thinking about, just in general, about financial planning because, sometimes, we think about just retirement accounts or just bank accounts. But I think there’s a lot more.

Bradley Hilton: [00:09:50] There is a lot more, and it all starts with, going back to my previous point, what are your goals for yourself in your life? Do you have a financial plan to achieve those goals? Do you have a budget in place? Because the budget is essentially the backbone. It’s the roadmap to achieving those goals. How often are you checking back in with yourself? And, again, are the big-ticket items taken care of. As far as post-tax season, we’re just out of it. So, now, you’ve either just filed, or you’ve just recently extended your tax return.

Craig Frankel: [00:10:19] And you’ve learned that the tax act, whatever it’s called, where you thought you were going to get rich wasn’t entirely true.

Bradley Hilton: [00:10:26] That all depends on what you do and how you went your year last year-

Craig Frankel: [00:10:29] Absolutely.

Laura Akins: [00:10:29] [Crosstalk]

Craig Frankel: [00:10:29] If you own real estate, that’s great.

Bradley Hilton: [00:10:31] It’s great for you if you’re in real estate but, yeah, a few things have changed. And we just went through our first tax season under the new law. So, for those that have filed, let’s get you in. Let’s take a look at your documents, and let’s even talk about maybe doing a tax projection to see how 2019 compares to 2018. For those that have extended, more than likely, it’s because you’re waiting on a K1, or you’re a small business owner.

Bradley Hilton: [00:10:55] So, let’s get as many of your documents as you can to your CPA. And let’s, again, run attack projection of 2019 based on what we know for 2018, and let’s see where you stand, and where you’re looking. There are estimated payments to consider. There’s additional withholding. If you’re small business owner, then you’re going to want to consider funding the employer side of your retirement plans either before you file or September 15th, which is the deadline for filing for an S corp or LLC.

Robert Port: [00:11:22] It seems to me, Bradley, that one of the issues you often face is something we often see, which is people don’t often have their hands around what they’ve got. If you’ve had a career, you’ve got a 401(k), maybe you rolled it over, maybe you didn’t. You might have life insurance, you might not. You might have property and casualty insurance. You might have a 529. You might have a Roth. Talk about sort of getting your hands around all of that because, that, I think is one reason people who are not interested in this shy away from it because they look at this and, “Oh my God. I’ll never be able to deal with it. So, I don’t.”

Bradley Hilton: [00:12:03] Another good point. And that’s exactly why if that’s not your thing, seeking out a financial planner is the right call because we will poke, and prod you, and persist to get the information that we need, so we can put together what we call a personal financial statement or net worth statement.

Craig Frankel: [00:12:19] What? You’re going to pay somebody to prod you?

Bradley Hilton: [00:12:23] I’m not going to comment on that. But yes, we are persistent in getting the information. So, if you were seeking out our advice, we would send you an informational form, and you’d fill out as much information as you could for us, we’d like to know a lot about your family, about your particular situation. And then, once we sit down with you and sort of do what we call a discovery meeting, getting to know your goals, and getting to know even more about you, we start to unravel kind of what you’ve built up for yourself. And then, we present the personal financial statement, which is the roadmap of what you have, where is it, how is it titled-

Craig Frankel: [00:12:56] And let’s underscore that, how is it titled. I tell a joke a lot when I’m talking to clients after there’s a dispute, which is, “If they tell you how it’s titled, and their lips are moving, they’re wrong,” because, oftentimes, you think you know but you don’t. And title is hugely important when you have a dispute.

Bradley Hilton: [00:13:15] Laura and I are both smiling.

Laura Akins: [00:13:16] It’s hugely important in general.

Bradley Hilton: [00:13:19] So, you’re absolutely right. We trust but also verify. We want to see the statements from the life insurance policy, for the IRS, the 401(k). We want to know who the beneficiary, the named beneficiaries are. If they say they’ve got an individual investment account, well, is it really in your name? Is it in your spouse’s name? Is it joint? Tenants with right of survivorship, tenants in common, that makes a big difference on your state plan and just how you can manage your assets going forward.

Craig Frankel: [00:13:47] And, Laura, what’s the biggest problem you have? When people come in, and they’ve got documents, what’s the biggest problem that you see in their documents or lack of documents?

Laura Akins: [00:13:55] Someone has died, or they’ve been divorced, or they don’t have the documents in general. But typically, they have somebody designated to receive or to manage their affairs upon death, and they haven’t updated in 15-20 years, which is too long. And so, something to underscore with what Bradley’s saying is that if you go ahead, and meet with the financial advisor, and gather everything together, you don’t have to go through that again every year. It’s already settled, and you’ve got that base point. So, the spring cleaning truly is kind of a spring cleaning. It’s not a total overhaul. It’s not a renovation of your house. It’s just a pick-me-up.

Craig Frankel: [00:14:42] You’re listening to Wealth Matters, the radio show where we discuss the opportunities and challenges of preserving and managing wealth. We’re your hosts, Craig Frankel and Robert Port, from the fiduciary litigation firm of Gaslowitz Frankel. We are talking today with Bradley Hilton, Financial Advisor with Modera Wealth Management and Laura Akins, Associate Attorney with the Nadler Biernath. Our topic today is spring cleaning your financial house.

Craig Frankel: [00:15:11] Now, Laura, when people talk about estate planning, everyone immediately says, “Okay, I need a will,” but there’s a lot more to that. Can you talk about things like trust, powers of attorney, health care directives, and things like that, and why that should be on someone’s spring cleaning list?

Laura Akins: [00:15:31] Right. So, when you go to your estate planning attorney, the first two documents they should address in the line of documents to discuss are your powers of attorney. In Georgia, we have statutory powers of attorney. Meaning their form’s contained in the law. If you’re a lawyer-

Craig Frankel: [00:15:48] Which, by the way, is new.

Laura Akins: [00:15:49] It is new.

Craig Frankel: [00:15:50] So, if you have powers of attorney, the new powers of attorney has a lot of opt-in and opt-out that you may not have thought about 5 or 10 years ago. And there’s some really good protections in there, so you should always go back and review your powers of attorney with Laura or someone else like her.

Laura Akins: [00:16:05] Right. And so, what we do, the financial power of attorney allows you to appoint a person to make financial decisions on your behalf in the event you’re unable to. Again, that’s a form that’s in the law. We have a bunch of extra language to say, “No, really, bank or financial institution, I mean it. I say this person can have power.” So, that’s sort of our function. And we walk you through the form. Same thing with a health care power of attorney in Georgia is known as an advance directive for health care. And that combines the power of attorney choice and the living well choice of end-of-life care, and how do you want to pull the plug.

Craig Frankel: [00:16:45] And this power of attorney is not a financial power of attorney. It’s to make health decisions for you.

Laura Akins: [00:16:49] Right. So, you get to choose a person to make health care decisions. And those two documents are only in effect while you’re alive. And so, those are pretty important documents for so-called disaster planning, which, I’m sorry to tell you, but almost always will happen for people these days. You get sick, or you get a car accident, you might have to go into the hospital. How are the bills going to get paid? Who’s going to make the health care decisions while you’re in the hospital?

Laura Akins: [00:17:17] The documents after that, of course, are the will, which directs your assets upon your death. But, sometimes, people have specific situations where a will may not be the only instrument you need, or it may not serve the best function for your specific assets or your family’s situation. In that case, often, we’ll do a trust. And there are literally hundreds of different types of trusts. That may be an exaggeration. Hundreds, I don’t know. But there are a lot of different kinds of trusts. We do trust for people with disabilities. We do trusts for wealth management. We do trusts, often, if there’s a contentious family situation, and you want to try to avoid having to go through the public probate of your will, and notify all of your heirs, and so forth. There’s some procedure involved in dealing with a will when a person dies. And in Georgia, that’s not always a huge deal, but it can be quickly. So, we consider that when we’re talking about all of this.

Craig Frankel: [00:18:22] And let’s just mentioned for our listeners, a will, when you die, is going to be public. However, a trust, unless there there’s a dispute when you hire Gaslowitz Frankel, it’s generally not going to be public. So, sometimes, just the privacy issues may matter to the decedent.

Laura Akins: [00:18:37] Right, exactly.

Robert Port: [00:18:39] And Laura, can you explain to our listeners whether or not the type of financial accounts that Bradley deals with are involved in your planning, particularly with respect to what the will says or doesn’t say?

Laura Akins: [00:18:54] Right. So, interestingly enough, in the past several years, the bulk of our client, all of our clients’ wealth – and that wealth can be $20,000 or millions of dollars that’s, it still wealth – the bulk of it is in accounts that have beneficiary designations. So, ding, ding, ding, Bradley.

Craig Frankel: [00:19:15] Okay. Let’s talk about that because beneficiary designations really are where we see the largest disputes, either mistakes because they forgot to correct it, or they never put it in. So, explain to our listeners what the importance is of beneficiary designations.

Bradley Hilton: [00:19:29] It’s a great question. So, at Modera, once we set up an account for clients, so we bring their wealth in, oftentimes, first thing we do is review their state plan. Not ourselves, we bring in estate planning attorney to review. And if there’s a need for an update, if the state law has changed, which it often does, or just the state plan is 10 years old, and is need to be — revision policies, or maybe you moved in from another state, possibly bought real estate in another state, that’s another reason to review your state plan and possibly get into trusts. Then, we go into your accounts. And we want to make sure that the beneficiary designation or the titling of the accounts matches your state plan and your goals for your wealth when you’re gone.

Craig Frankel: [00:20:17] You mentioned earlier, you said buzz words that have lots of meaning to the lawyers at this table but, sometimes, not a lot of meaning to our listener. Joint tenants with right of survivorship, joint accounts. Explain what they are.

Bradley Hilton: [00:20:29] Sure. So, generally, if you have what’s called a qualified or tax deferred account, that is something where you have not paid the taxes on that account now, and you’re going to pay the-

Craig Frankel: [00:20:40] Give some examples.

Bradley Hilton: [00:20:41] 401(k) and IRA, a 403(b) if you are a teacher, those accounts, you don’t pay taxes now. And then, when you take a distribution later in life, presumably in retirement, you pay taxes then. Those come with what, generally, we call beneficiary designations. Meaning you can designate an individual or trust to receive those assets if something were to happen to you. Now, on the other side, we’ve got what we call taxable or brokerage accounts. And that’s money where you’ve already paid the taxes on that, but you put it into investments. Imagine just going out there and buying Apple stock for $100. I don’t think you can do that anymore. Then, that would come with titling. You can either have it in the individual title, which would be just my name; and therefore, that would pass by way of my will or state documents. You can also do joint tenants with right of survivorship, and that bypasses probate, that bypasses your state, and it literally goes, upon your death, directly to the other named individual on that account.

Bradley Hilton: [00:21:41] Then, we have tenants in common. It’s very similar, except where you can actually envision it as individual ownership, where if you and I owned property together, 50% tenants in common, we could both have absolute right to use that property. But upon my death, I can sell my share of the property — prior to death, I can sell my share of the property. Upon my death, I can have that go through my estate plan. It does not automatically go to you. And, also, in tenants in common, it does not have to be 50/50; where joint tenants with right of survivorship has to be even number of shares.

Robert Port: [00:22:16] And both of you have suggested that the way to think about this, particularly if you’re doing the type of maintenance and update we’re talking about is to involve all your professionals. Your estate planners should not be in a separate silo. Your financial planner should not be in a separate silo because they need to coordinate. They need to understand what’s going on with your beneficiary designations, with your powers of attorney. So, that is something important. And I’m pleased to hear you suggest to our listeners that they make sure that their respective professionals communicate.

Laura Akins: [00:22:52] Though I will point out that, typically, when a client comes in, we love the financial planner to be in on it. And so, we get somebody set up. If they don’t have documents in place, we do the documents, we work with a financial planner. But after that, I don’t know that spring cleaning means necessarily – I hesitate to say – talking to your professional. I mean, it really could just mean pulling the documents out of the drawer or maybe having a phone call with your financial planner to say, “Are the numbers changing? Do I need to do anything?”

Craig Frankel: [00:23:25] Well, that’s a big issue, the numbers are changing, both your wealth changing and your needs. So, my last child just went to college. So, my wife and I, for good or bad, are now empty nesters. And our need for insurance and what we were planning to get the kids through college is different today than it was 15 years ago when we were trying to think about it.

Laura Akins: [00:23:46] Right. And so, it may be the case that your well is still fine, and it serves its function, and you need to recall who you’ve put in place to serve as your executor. But if that person is still alive, and kicking, and competent, and hasn’t gone off the rails, you may not need to call your estate planner again, but you may want to talk to Bradley and say, “Hey, I’ve got all of this you know these insurance premiums I’m paying, and I no longer need them. What do I do?”

Craig Frankel: [00:24:14] So, what happens if the beneficiary designations are not what you want, and you now die?

Laura Akins: [00:24:18] Oopsies.

Bradley Hilton: [00:24:20] Oopsies.

Craig Frankel: [00:24:20] But what are the kind of problems that people face when they made a mistake?

Bradley Hilton: [00:24:25] Let me give an example of sort of the worst case I’ve seen. That is two spouses divorce, they never changed their beneficiary designations. Both or either one have remarried. Maybe contemplation of or they are children under the new marriage. And oh no, I just passed away, and I’ve left everything, by beneficiary designation or joint tenants that I never changed, to my ex-spouse. And my new children, my new wife-

Laura Akins: [00:24:55] And how many people at the table here have seen that.

Craig Frankel: [00:24:58] And by the way, this is a problem we see all the time and the numbers can be astronomical.

Bradley Hilton: [00:25:04] Yes.

Robert Port: [00:25:04] I’m smiling because I have a case on my desk right now with very similar facts.

Bradley Hilton: [00:25:11] And that is sort of the worst case I’ve seen, but, oftentimes, we see just even smaller cases, but they lead to a lot of family contention. We want to help our clients lead their best lives. We want to help them enjoy their family in the way that they always desired. You wouldn’t imagine. And the amount of money, it’s always shocking. The amount of money, it’s [crosstalk].

Craig Frankel: [00:25:30] They’re all relative [crosstalk].

Bradley Hilton: [00:25:31] It’s all relative.

Robert Port: [00:25:33] What’s hard for laypeople to wrap their heads around is that once that happens, as Laura said, the will, if there is a beneficiary designation, means nothing. And from the insurance company’s perspective, they follow the beneficiary designation. The fact that you were divorced, you may have hated your ex-spouse. It may make no sense to anybody. The insurance company has a contractual obligation to pay that money as the beneficiary designation says, which goes back to making sure you periodically make sure all that stuff is right.

Craig Frankel: [00:26:09] Bradley, you mention reducing family tension, which is really a goal that we have even in family disputes. How can we resolve the dispute and minimize family tensions and maximize the opportunity for having reconciliation? So, let’s talk about, Laura, when you choose a fiduciary, when you choose an executor, or you choose a trustee, we often default to the oldest child or to the spouse and the oldest child. Tell us about how one should go about choosing who should be the executor, or trustee, or the other type of fiduciary?

Laura Akins: [00:26:43] Right. So, an executor or a trustee is going to be a person who is managing your money and distributing according to a legal document. I always tell clients that the person should have something that my old boss used to call business common sense. So, basically, it’s knowing when to ask questions to a professional, knowing when to delegate, and also generally being a responsible, ethical person as far as money goes. If your executor does not speak to the rest of the family, well that could be a problem, right. You want to consider how they communicate with other people. Are they diplomatic?

Laura Akins: [00:27:27] I don’t actually think location is as important anymore as far as whether they live out of state or in state; though, it is it is preferential for them to be closer for practicality. As far as actual business, you can take care of a lot of that online. But, really, it’s important for a person to know, “I need to ask a lawyer or a CPA about what’s going on in this estate or with this trust.” And it’s also important for them to realize that they have a higher level of duty to the estate or trust.

Craig Frankel: [00:28:01] That’s a buzz word, for you could be sued.

Laura Akins: [00:28:03] Oh, yeah, yeah. Let you have a higher duty. It’s a fiduciary duty. And you have an obligation to serve the funds that you’re managing and also the beneficiaries of those funds. So, if you appoint your spouse, and your spouse is not going to benefit but your children are, if your children are your spouse’s stepchildren, well you might want to think about that relationship. There are a lot of really great professional fiduciaries out there now that are serving for a fee, of course, but that mitigates a lot of those potential disputes that we’re talking about.

Craig Frankel: [00:28:44] And they’re often better investors than an individual. Let me ask you a question that we see often. We see that the same person is designated to be the agent on a power of attorney is the same person that’s the executor. Is that a good idea or a bad idea?

Laura Akins: [00:28:59] I think it’s a good idea because it maintains some consistency. And, again, an agent for a financial power of attorney has that same level of duty, the fiduciary duty. So, consistency, they know the accounts, they know what’s going on, and they can kind of ease into the role of executor, which is the person that manages your estate upon that fairly easily.

Craig Frankel: [00:29:21] You’re listening to Wealth Matters, the radio show where we discuss the opportunities and challenges of preserving and managing wealth. Your host today are Robert Port and Craig Frankel from the fiduciary litigation law firm of Gaslowitz Frankel. We’re talking with Bradley Hilton and Laura Akins about spring cleaning your financial house.

Robert Port: [00:29:41] Bradley, it occurs to me there one fundamental thing we have not yet touched upon is budgeting. Talk about that, and how, and if you approach that with clients because I know a lot of people, money comes in, they spend it, and there is no budget, either real or imagined, involved.

Craig Frankel: [00:30:02] And before you do that, tell me how to have that conversation with my 18-year-old daughter.

Bradley Hilton: [00:30:06] We’re going to have to take that one offline. The budget, simply put, is money in and money out, how you’re tracking it. We have a lot of clients that will come in, a lot of prospects that come in to say, “I make $500,000, and we’re only spending about $250,000 a year. So, there you have it. Let’s see what we can do.” And we take a look at the numbers, and we say, “Something’s not adding up.” Even after taxes, if you’re only spending $250,000 a year, you should have-

Craig Frankel: [00:30:33] On a lot.

Bradley Hilton: [00:30:35] Yeah, only. You should have — this is a hypothetical situation. You should have X amount in savings. So, we’re not seeing that. So, where’s that money actually going? And we start to ask more questions to figure out more about their lifestyle and more about their desires and their goals. And from there, we help them work out a budget, if they need it, or at least we get a nice idea, a ballpark of where they are.

Craig Frankel: [00:30:57] Are there tools online to help somebody realize what they’re actually spending? Because from my perspective, when you say, “What do I think I’m going to spend?” often, there’s a disconnect between what you’re actually spending.

Bradley Hilton: [00:31:10] That’s a great question. Yes, there are spending and budget aggregators out there. There’s mint.com. There’s YNAB, which is You Need a Budget. There are a couple of other good ones out there. For the do-it-yourselfer, you can log into various accounts. It’ll pull in your bank statements, your credit card statements, and then you can categorize everything, subcategorize to your heart’s desire. And therefore, you can get an idea of where your money is actually going and that total number on average for a month, on average for a year. Then, we have a retirement analysis software program that we will punch in all of your information. It’s very intuitive. It goes through and does the account tax calculations and even adjusts for the tax sunset, probably getting well above people’s pay grade at this point.

Craig Frankel: [00:31:56] The tax sunset merely means that the tax laws are going to change in about 10 years, unless we change them again.

Bradley Hilton: [00:32:02] In 2025, the current tax law, or, at least, some parts of it are going to what they call sunset, and go away, and revert back to what it was before, unless there’s another change. So, we’ll put all of that information in. And based on their goals, we can help them kind of set the trend or figure out what they need to do to more easily achieve their goals. And that can be two-sided. What more do you need to do for education planning? What more do you need to do to get you where you need to go in retirement? Or, “Oh my goodness. The results show that you’ve actually overfunded for retirement, and you’re not living the best life you could now. So, let’s talk about that.”

Robert Port: [00:32:38] This isn’t an advertisement for Mint, but I think one of my sons turned me on to toward a number of years ago. And I’ve entered all my data. And in addition to giving you budgeting ideas, you can enter, for example, your credit cards. And every time there’s a charge, it shows up. So, one other aspect of that is with the sort of rampant sea of fraud, you can pick that up. It will show you the balances on your mortgage, so you can get an idea of your net worth. And, again, it’s a do-it-yourself thing. It’s wonderful to have all these tools out there. One of the things we hadn’t talked about with either of you is insurance. Laura, you want to take insurance?

Laura Akins: [00:33:21] To some degree, we suggest to our clients that that’s a tool that they can utilize. Life insurance, especially for our younger clients, can be a jackpot because it’s cheap, and it’s a great way to fund a trust. If you’ve got a child, especially in our case, we do a lot of special needs work, if you’ve got a child with special needs that you need to plan for their lifetime care, having a trust can be really important. And how do you fund that trust? Well, you can pretty cheaply fund it with life insurance.

Laura Akins: [00:33:54] That’s also just one of those big pieces of most people have some kind of insurance through work or, in general, just as an investment vehicle when they’re younger. And knowing who the beneficiaries are and keeping track of the value of the life insurance if you’ve got a whole life policy is something we’re always discussing. We don’t talk too much. We talk some about if you’ve got an umbrella policy, if you’ve got different entities, LLCs, or trusts, or things like that that are managing rental property or out-of-state property, and you’ve got an umbrella policy, we’re always going to ask about that.

Craig Frankel: [00:34:34] Bradley, talk about the different types of insurance one should think about. So, Laura mentioned life insurance, but there’s lots of other insurance out there that’s protecting your family in different ways. Some are very expensive, and some are not. So, what type of insurance should a normal individual or family think about?

Bradley Hilton: [00:34:53] It’s a great question. And I think the answer is it depends. It depends on your stage in life. It depends on a lot of other factors. But let’s talk about kind of the big four as far as insurance, in my mind. You’ve got life insurance. And just remember, all insurances are there to protect you from what I would consider a kind of catastrophic events.

Robert Port: [00:35:14] That’s why it’s called insurance.

Bradley Hilton: [00:35:17] Exactly. No one likes paying it, but you’re really glad you have it if something happens. So-

Robert Port: [00:35:21] And the point is catastrophic events. That’s why I’m personally adverse to things, to buying things such as warranties and service contracts, which are a form of insurance, but, in my mind, insurance should be exactly and only for catastrophic events.

Bradley Hilton: [00:35:39] Agreed. I won’t touch on warranty because that’s a whole other topic for a different day, but when we talk to our clients, when a client first comes in, once we get to know them and get to know their goals, okay, what do you have as your stopgap? Where can things really go wrong? Do you have adequate life insurance? Depending on your age, your income, your family’s situation, how long do your children have until they go to or finish college? Have you properly funded for that or do you need a stopgap for that as well? Do you want to take care of other family members? Do you have parents, wife, grandchildren, whatever the case may?

Craig Frankel: [00:36:16] And we’re seeing by the way a lot more now because our aging population is living longer. Lots of adult children – by the way, when I say adult, I mean 50, 60, and 70-year-olds – are going to have to provide for their parents.

Bradley Hilton: [00:36:31] And Laura made a great point that the term insurance, for those that don’t know, term insurance is you buy, it’s very cheap comparative insurance for your life. And term is just that. It lasts for a particular term. So, generally, you’ll see something like a million-dollar policy. That’s a million-dollar death benefit. It’s for a 20-year term. You pay into it for 20 years. After that, it drops off. It’s very affordable compared to what they call whole life policies, which is something you pay into for the rest of your life, and it starts to build a balance. We like that because it’s cheap, you can get a lot of it. and you can also ladder it. You can say, “Okay, for these particular goals my life, I can get $500,000 policy for 10 years. For this goal, another 20. And in contemplation of future children, or taking care of grandparents, or whatever the case may be, let’s do another one staggered on for 30 years.”

Craig Frankel: [00:37:21] So, you mentioned kind of four types of insurance. You’ve talked about life insurance. What are the other three?

Bradley Hilton: [00:37:26] Thank you. The other three, disability insurance. Oftentimes, if you are a W2 employee, meaning you’re employed by an employer, they’re going to provide some level of disability insurance. It tends to default to 50% of your income. It’s usually an opt in for additional 60, and that’s where it stops. What happens if you get disabled? And the statistics are that you’re more likely to be disabled during your working years, during your career, than you are to be killed. So-

Craig Frankel: [00:37:55] Dramatically. So, 60% of everybody is going to have some disability. It may be short term like a car accident, but 60% of the population will have a disability while they’re working.

Bradley Hilton: [00:38:06] That’s a great lead in it. So, we want to assess that because if you have a policy that is paid by your employer, or it’s paid with pre-tax dollars, then when it pays out to you, it’s actually taxable. So, therefore, that 60% of your salary is actually significantly less depending on what tax bracket you’re in. So, we want to look at that. We want to see if there’s adequate coverage and if we can get you more in the personal policy because if you’re paying for that policy out of pocket, then the benefits, if you ever go disabled, are tax free. So, that’s number two.

Bradley Hilton: [00:38:33] Number three would be health care, health insurance. We want to take a look at that, see where you stand. If you’re in a high deductible plan, are you taking advantage of what I consider my second favorite retirement vehicle, which is a health savings account. And then, the final one would be long-term care insurance. Where do you think health care is going into the future? Do you think you’re adequately covered? Do you want to sort of potentially relieve the burden on family and protect yourself down the line, so you don’t eat into the assets and the wealth that you’ve worked so hard to build over time by spending it on health care costs?

Craig Frankel: [00:39:07] We’re kind of nearing the end of the show, and I wanted to make sure we didn’t leave this topic because I think it’s so important. Digital assets, particularly passwords and things like that. Sometimes, we say, “I’ll give my password to my wife,” but they forget about it and, technically, after you die, you can’t use a password. So, what are the kind of the issues, Laura, that we’re seeing for passwords and access to Facebook and other digital things? And what can we do or think about as we start planning for either disability or death?

Laura Akins: [00:39:39] It’s very difficult to get access to any accounts that have an online password once a person passes away, if you don’t have the password. So, it’s true. Technically, we’re not supposed to access these things, but if you keep a list of online passwords, if you’ve got bank accounts online, your Facebook, Gmail, or any other online e-mail, keeping a list of all those passwords in a document, you can even keep it and a password-protected document, but that creates another question, and updating it because, of course, we’re encouraged to change our passwords periodically. So, that is a crucial part of spring cleaning.

Laura Akins: [00:40:17] If you’re trying to make the rest of your family or whoever is managing your affairs, if you’re trying to make their life easier, knowing what those passwords are, so upon your death, they can kind of kick into action. You might not want your Facebook online for eternity. You might not want your e-mail to be just open and up for grabs. You can also designate legacy appointees or contacts. I’m not sure of the official name. This is still totally the Wild West.

Craig Frankel: [00:40:47] And let’s note this. On social media, they will have a tool that could make some specific decisions. You can put a default in your will if you choose that. I want to mention one thing about passwords though. If you find access, and you have a single place, and there’s lots of online tools to store your passwords, one of the online tools you can use is if somebody accesses it other than you, you get a notice. So, at least, you can see. So, you can say to my brother, “If you ever need it, here’s the password.” But if brother goes in a couple of years too early, and you’re not yet dead or not yet disabled, at least, you know.

Laura Akins: [00:41:23] Right, right. And you want to keep track of all that because everything is online now. And so, being able to manage those things, especially in capacity or death, is crucial for ease of movement as you’re going through a disaster or death.

Robert Port: [00:41:45] Before we conclude, we wanted to ask each of you if you had success story or short success stories that you’d want to share with our listeners that touch upon the topics we’ve talked today. Bradley?

Bradley Hilton: [00:41:56] Sure. We have many success stories but, honestly, what gives me pause and when I reflect upon what we do, it’s just anytime we help any of our clients reach any of their financial goals. If you’re selling a business, if you get a big inheritance, and you don’t know what to do, if you’re just looking for a second set of eyes in all of your documents, when we get the thanks, and we see that we’re making an impact on our clients’ lives, that’s a win for us every time.

Craig Frankel: [00:42:24] And I can imagine how comforting it is to get a sense of relief even if you’ve done everything right before they go see you.

Bradley Hilton: [00:42:31] Exactly.

Laura Akins: [00:42:33] So, mine is sort of similar that in law school, I was doing death penalty defense work. And then, I moved over to estate planning. And my very first estate planning client I ever had it gave me a hug at the end of the meeting, and I was thinking, “What is this person doing?” And I realized that we’re taking a load off. And so, anytime someone hugs me when they leave our office, I feel good about that meeting.

Robert Port: [00:42:54] Well, that’s a great story. Let’s have each of you give our listeners your contact information, website, phone number, and anything else you’d want them to know, so in case they want to contact you, they can do so. Laura?

Laura Akins: [00:43:09] Sure. I’m with Nadler Biernath. Our website is nadlerbiernath.com. The phone number is 770-455-0535. And we’re in Dunwoody, at the top of the perimeter.

Bradley Hilton: [00:43:23] We are located in Sandy Springs, just off of 400 and 285. We are Modera Wealth Management, M-O-D-E-R-A. You can find us at moderawealth.com. And you can call our direct line at 678-833-1166.

Craig Frankel: [00:43:41] As we wrap up our show, I want to thank everyone for listening to Wealth Matters, where we discuss the opportunities and challenges of preserving and managing wealth. For more information about Gaslowitz Frankel and for more information about our guests, if you didn’t remember their website or phone numbers or can’t spell their names, please go to our website at gaslowitzfrankel.com, and remember to follow us on Twitter, @EstateDispute, and use our show’s hashtag, #wealthmatters. Our guests today were Bradley Hilton, a financial adviser with Modera Wealth Management, and Laura Akins, an attorney with Nadler Biernath. Please join us every fourth Wednesday of the month at 8:30 here at Wealth Matters on Business RadioX.