Early Retirement - Financial Freedom (Investing, Tax Planning, Retirement Strategy, Personal Finance)

Here's When A Will Is Sufficient And Trust Isn't Necessary (Part 1)

• Ari Taublieb, CFP®, MBA • Episode 269

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Estate planning doesn’t have to be complicated. This episode breaks down the essentials: wills, trusts, and what actually matters, so you can protect your assets and give your loved ones peace of mind.

Wills determine where assets go after death. Trusts do that and more. They can manage assets during your lifetime and help avoid probate, offering more flexibility and control.

In states like Texas, Arizona, and Florida, probate tends to be fast and affordable, so a will might be enough. But in places like California, New York, and Oregon, a trust can help you avoid long, expensive, and public court proceedings. Some situations call for extra planning regardless of location, such as blended families, special needs beneficiaries, or owning property in multiple states.

This episode also explores the idea of a “dead box,” a digital folder that holds important documents, passwords, and instructions to make life easier for your family during a difficult time.

Estate planning isn’t just about legal documents. It’s about creating clarity and making sure your family knows what to do when it matters most.

Listen to Part 2: FAQs: Wills, Trusts, Power of Attorneys, and Other Estate Planning Tools 

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Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation.

The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.

Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements

Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.

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Ari Taublieb, CFP ®, MBA is the Chief Growth Officer of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.


Speaker 0:

It's time to finally simplify trust and wills, and let's do it right now. So think about a will as an after-death purpose. It's there to direct where assets go after death. Think of a trust as something that certainly does direct assets after death but can also be managed while you're alive. There's way more planning that obviously goes into it. There's so many different types of trust. There's special needs trust and irrevocable trust and charitable remainder trust.

Speaker 0:

I'm not going to bore you to death with all of those details today. I have other podcasts where I go into great detail on nearly every single type of tax or financial or estate or withdrawal or healthcare financial topic. I know I just said financial twice there, but you guys know what I mean. I love this stuff and, if you don't know, my name is Ari Taublieb. I'm a certified financial planner, host of the Early Retirement Podcast and I'm the chief growth officer here at Root, where we love helping people retire early. Now. We help people from all walks of life, but estate planning is a big thing that comes up Most of the time.

Speaker 0:

I'll be totally honest with you. It's pretty simple. It's you have a beneficiary that you have not updated in a long time and you want to make sure you're not missing something. So in an early meeting with a client we will go hey, do you have a POD? And they'll say what did you call me? No, they won't say that, but they'll say what is that? And I'll say what is that? And also, it's a payable on death. So this is something that you want to set up at your bank account to remove hassle, so when you pass away your heirs don't have to go search in and trying to find documents. It's just gonna make life easier for them. So there are things like payable on death. There are things like TOD, which stands for transfer on death. That goes at your brokerage account. You don't need it at your IRA or 401k. You can list a beneficiary directly. That's not how it works with a brokerage account. You need a TOD transfer on death. So there's all these little things power of attorneys, durable what types do I need? I'm going to put together for next week an episode where I go into more detail on all of those little tidbits.

Speaker 0:

Today is just trust and wills. Now I'm going to start by explaining what states generally not going to say don't need trust, but generally where a will can be sufficient, because part of my role, as I see it, is to save you all time. I know you can go look up real quick on ChatGPT and just quick Google search hey, do I need this trust? Do I need this will, and I'll have people submit questions going hey, look this up. But I'm still not confident. So let me give you some more confidence. Today I have clients that have shared with me hey, I know online, it said I didn't really need a trust here, but I got one and, to be honest, it saved so much hassle. I wish you could have told other clients to do it and I did it, but I got lucky. So I want to be able to pass along those actual sentiments that I've heard for all of you Once again. I love getting to go through this. So I appreciate you all for tuning in.

Speaker 0:

Now I'm going to start with going through a little quick table, and I'm going to start with going through a little quick table and I'm actually going to show it to you on my screen right now. If you're listening on the podcast app, like many of you are, versus watching on YouTube, totally cool, you're not going to lose any user experience. I listen to a lot of podcasts myself and I know what it's like when someone says, make sure to watch the video right here, when it's just easier for me to listen. So here is a quick summary table. It's just easier for me to listen. So here is a quick summary table.

Speaker 0:

These are the five states that traditionally. If you're like, oh my gosh, do I need a trust, the answer is no. No, because of the following In Texas, pretend you don't have a trust the probate cost and speed. It's low, meaning it's a low cost and you can go through it quickly. So Texas low cost, fast speed in terms of going through probate Probate. Once again, that is the hassle we want to remove hassle there's no estate taxes in Texas and when trusts are just less necessary. Why is that? Simple estates, local assets. Arizona same thing no estate tax, low cost, it's fast. Florida, technically, is categorized as moderate, with manageable speed. But think about it like the DMV. That's how I'll explain it.

Speaker 0:

With all of this, do you need a trust? In a lot of these states, no, but there are instances that I'm going to go over when I would still recommend having a trust instead or in addition to a will. But Texas, arizona, florida, south Dakota and Alaska are the primary states where, if you were to come to me as a client and say, oh my gosh, ari, you're going to freak out, I don't have a trust, I might go. Well, I might not freak out and let's go through it Now, on the flip side, there are more states where trusts are highly advisable and I'm going to go through this list because I live in one of these states California Probate is super expensive.

Speaker 0:

Statutory fees up to 4% of your estate does not seem like a big deal, but it's just unnecessary. It's like you don't need five Netflix subscriptions, so it's super slow and it's public. That's the triple threat Expensive, slow and public. Key issues those high legal fees, long delays and lack of privacy. Once again, this is on my screen here, or, if you're listening, on the podcast app. I will continue to go through each of these.

Speaker 0:

New York probate is slow, expensive, complex and court supervision there is an estate tax exemption. All of this is constantly subject to change, so I tell my clients not to get hung up on these things because they're always changing. Massachusetts this sucks, I'll tell you. I'll be totally honest. This sucks. That's not any financial jargon for you, just real life. Probate can take 12 to 24 months with high legal fees and there's no state estate tax under $2 million. But there's still complexity and delays there. I had a client that went through 36 months of that and that was not fun. State estate tax starts at $1 million in Oregon. Probate slow and extensive. I'm not going to go through every single one here, but California, new York, massachusetts, oregon, new Jersey, connecticut, hawaii, washington State that's generally where a trust is advisable.

Speaker 0:

Now there are other instances where you certainly want to consider a trust or a will or something that is going to once again minimize hassle. The ultimate thing that I want you to do is to feel peace of mind, for if you were to pass away, you're not leaving a huge burden to your spouse or heirs because I can assure you, the last thing they're going to want to think about is the finances. They're going to be going through the emotional side and I have clients that go, oh my gosh. Now this is not a great example, but I had one client that said it was kind of a nice distraction. I'm going through the finances and I'm not just thinking about when we used to be able to travel and I'm not saying this to depress any of you, just the reality. And then they're like, oh my gosh, it's just becoming so much. And now I realize my life is not what I thought it was going to be, and it's just, you don't want to go down that path. Leave them with the minimal hassle.

Speaker 0:

So there's an advisor I follow who talks about what's called the death box. I personally have a death box. I'm actually going to see maybe real quick, cause I'm just searching on my computer If I can show you all an example. I do have it. It's called a dead box, not a death box. Now I'm going to go through this only because you can literally see it on my screen, but I have my vows that, in case I were to pass away, I want my spouse to be able to always read and never forget.

Speaker 0:

I put together a PDF of other things to think through. This is a big document of just estate stuff. I have all my assets and account lists. I have where to go for everything, photos for my funeral partnership, details regarding where I currently work, and then a big Word doc that says Ari is dead. Read this first, where there's emotional things in addition to just how can I make their life easier. This is on Google. So for all of you, I recommend, if you have not already set something like this up for your spouse or for your heirs Every single year, I will update this on January 1st with passwords, things that have changed. Other thoughts I want to include some videos and things like this for future family members. So this is just a nice thing to do.

Speaker 0:

Not necessarily on the will versus trust stuff for today. Now, in some states the truth is, probate is simple, it's fast and it's inexpensive. Making a trust quite necessarily not necessary Solely for probate avoidance, that's where I'm like. I don't know if you really need it. In fact, I do know you don't always need it. If you have a well-drafted will, proper beneficiary designations, payable on death, slash, transfer on death, that can be fully sufficient. You do not need to also go get a trust. So we sometimes will see a lot of clients come to us with Texas. That's where a will can be sufficient. There is independent administration, meaning an executor can administer the estate without ongoing court supervision, which saves you time and money mainly time and there's no state estate tax.

Speaker 0:

I keep saying that but it's just a mouthful. Many families just do not need trust purely to avoid probate. So I don't need you to go set something up in a super fancy way just for the sake of it, but I do want to make sure you're protected. And many of you who do reach out to Root, you're not your traditional retiree in the sense of I've done videos on average 401k balances and the hundreds of thousands Most of you are reaching out going look, I have a few million bucks. I want to make sure I'm doing the right things. Yes, I want my spouse set up, I want my heir set up, but at the same time, I want to make sure I'm not missing anything. So today is not tax savings. Today is just a state hassle and once again, there are lots of states where you just don't need it.

Speaker 0:

Now here is what I really want to make sure I'm finalizing today's episode with, which is when a trust still may be needed, even if you're in a state where I just mentioned, a will could be sufficient, which I know you're going, ari. That contradicts itself. Just hear me out here. So, blended families so if, for example, you're divorced and then you get remarried, to control distribution of timing, I have clients that will reach out and say, hey, I love my son. But if they marry someone who I just don't think is the best fit and I pass away, I want to make sure those dollars aren't accidentally going there.

Speaker 0:

And how do I control that? Well, there's lots of things. There are things called HEMS provisions, which stands for health, education, maintenance and support, which means you can literally make it. So dollars can only be used for certain purposes If you have a child with special needs, if you have real estate in different states, if you have privacy concerns, if there is asset protection planning, so a certain trust for a child that maybe has gone through difficult circumstances, creditor protection and then incapacity planning. So I will say on this sometimes power of attorney is sufficient. So if you have durable power of attorney, you might very well not need a trust. Of course, you know this is coming.

Speaker 0:

If you really are about to set up a trust or a state or will or medical directives or power of attorneys, I encourage you to go with a financial advisor who is going to help execute all of this with you For our clients. We use an amazing service called wealthcom where we help our clients walk through this. This is exclusive to advisors and we help them get everything they need in order, if you are a member of my early retirement academy, in the description of this episode, both on YouTube and in the podcast app, I do offer a way if you want to get everything up and running. I personally yes, I have a bias, but I believe it's way better than services like LegalZoom. It's super simple. It walks you through how to do it. You can get all of these things up and running and you can chat with them in real time. So if you want, you can use that service.

Speaker 0:

And then, finally, what we do here at Root is holistic financial planning, so not just the estate or the tax or the withdrawal or the health care or the insurance. We do it all. So I joke with people you don't want a new job in retirement as a coordinator. You want to make sure everything's happening the way it should, without you traveling, worrying about hey, did the law just change on health care? And what about taxes and estate planning? We do it all for you and we act as your partner. So it's not us saying you have to do this, it's us saying, hey, here's what just changed. What would you like to do in this situation? We are true partners. Thus Root Financial Partners. Now that's it for this episode. Hope you enjoyed it. See you guys next time. Thank you all, as always, for Thank you all, as always, for listening to the Early Retirement Podcast.

Speaker 0:

I love getting to host these shows and make different content for you guys every single week. I've not missed a single week in years and that is because I love getting to do this. Now, please be smart about this. Before you actually execute any strategy that you see me talk about or hear me talk about, should I say Please talk to your financial advisor, your tax preparer, your estate attorney. Please be smart about this. None of this should be construed as financial advice. This is for fun, educational, informational purposes only. Once again, just quick disclaimer here. Guys, please be smart about this. Appreciate you listening, as always. You can, of course, submit a question on my website, earlyretirementpodcastcom, if you, of course, want me to address a specific case study or topic. I will not promise I can get to it, but I respond to every single person and if I find it will be helpful for a lot of people, I will absolutely make an episode on it. At the very least give you some insight. That's it. Thanks, guys.