The Rudd Commentary recently hosted our attorney, Carolyn Dove, on its podcast. We would like to thank Styre Wealth for the opportunity to share about our estate planning practice and provide information to listeners.
You can listen to the full podcast here:
Read the full transcript here:
Josh Rudd:
Good day to all of our investors and guests. This is the Rudd Commentary podcast and I'm your host, Josh Rudd. I'm the managing partner and principal wealth advisor here at Styre Wealth. For our new listeners who may not be familiar with who we are at Styre Wealth we manage investments for successful families, high performing professionals and organizations across the country and become your very own proactive investment management team confidant and personal wealth advisor. So you can relax and focus your time and energy on chasing what you love. So much of our wealth management process focuses on managing risk, which is not just about investment risk. In fact, on the financial planning side of our business, a large portion of our time is spent working to mitigate what we call multi-generational risk, which is really about planning for the next generation as well as working with other professionals and institutions on settling estates, managing trusts and distributing assets to beneficiaries. So it goes without saying, we at Styre Wealth have to be familiar with the estate planning process but we are not attorneys. In many cases our clients need more advanced planning that may require more specialized help or legal advice. When this happens, one of our advisors may need to discuss case specifics with a legal expert, or bring in another professional to craft a separate estate plan. Well, Caitlin, it just so happens that I have one of those partners on our show today. Our guest for this episode is Carolyn Dove, founder of The Dove Firm in Arlington, Texas. Carolyn is an expert in all things estate planning and many other things I might add. She's also a CPA, has done work with the Arlington Independent School District and is a mother of four. All this and one of our longest running professional consultants that have assisted our clients over many, many years, I don't know how you do it all, Carolyn, welcome.
Carolyn Dove:
Thank you. Thanks for having me.
Josh Rudd:
Well, you're welcome and it's great to have you on the show today. So why don't we get started by you just telling us a little bit about yourself and your legal practice.
Carolyn Dove:
Sure. I opened my legal practice, called the Dove Firm in August of 2012. When I first opened up it was just me. It was in Arlington, Texas. And today we are still in Arlington, Texas. I focus a lot on tax matters because as you mentioned, I am a CPA, I focus on pretty much anything that tax affects, which includes a lot of estate planning that leads into probate. And I also help a lot of local businesses out with whatever their legal needs may be. We've got a staff of four and in our office we really just try to make people feel comfortable and try to take some burden off of them.
Josh Rudd:
Well, that sounds great. So I'm just curious when you started, why did you decide to focus on estate planning?
Carolyn Dove:
Well, I kind of feel like maybe estate planning chose me just because of some of the other things I do. Like I said, I'm a CPA and so a lot of my focus when I started out was on tax. But tax just affects so many different things and tax affects a lot of estate planning. And I realized that everybody needs estate planning. So it was kind of the perfect fit.
Josh Rudd:
Absolutely. So do you have any type of client or individual business family that you specialize in working with?
Carolyn Dove:
In my practice, I feel like I add a lot of value to people who own businesses, because those are still people who need estate planning, but business owners kind of have specialized issues that go along with owning a business, so we're able to help them both in deciding how their business is going to transition, as well as everything else.
Josh Rudd:
I completely understand. I know being a business owner gets pretty complicated. There's always things coming out of left field that you have to deal with and they're always really important and they have to be dealt with right now, right?
Carolyn Dove:
Exactly. It’s always something.
Josh Rudd:
So I I've always told our business owners and high performers the mark of a, you know, high performing professional is when you get to that moment, you say, you know what, I'm not very good at that. That's something that I, I don't do well with. Is there anything in your business or your firm, any legal matters that your firm does not specialize in?
Carolyn Dove:
Yeah, there are a few. We don't handle any types of divorces or custody cases. We don't handle immigration cases. Really we just focus on helping people with matters related to estate planning, business, and tax.
Josh Rudd:
That makes sense to me. Well, let's go back to really just the estate planning kind of as a whole in the industry. How has that changed over the years from when you started to now?
Carolyn Dove:
Yeah, that's a good question. OK, so technology has changed a lot of people's lives and same with us. Technology has made some things easier for us because we are able to do some things remotely with some of our clientele, though they don't want to use technology and so we try to do what's best for our clients and what our clients feel comfortable with. So if a client really wants to just do as much as possible online, we do that. But with others we still can do paper and pen, and mail, FedEx and whatever works for them.
Josh Rudd:
Carolyn has the has the let's just call it the TurboTax impact on the will creation. Has that had a big impact? On your industry?
Carolyn Dove:
So I would say I definitely see a lot of self done wills on my probate side. And I would guess that probably half of those have some issue that makes it not a streamlined simple probate case. So it's very unfortunate when someone does a DIY will and they forget a step because you know they live for the rest of their life, thinking that everything's fine. It's only after they pass away that their family realizes something is not.
Josh Rudd:
I can imagine is there a comment or some common mistakes or steps that you see missed in the probate process?
Carolyn Dove:
Some I have seen include not having what's called a residuary clause, where maybe you say I want to give one thing to somebody and this thing to somebody else, but you don't say where the rest of your stuff goes. So that's a problem. I've even seen, well, commonly some of them don't have witnesses sign it, which is a requirement in Texas, and I've seen maybe a couple where the person writing the will didn't even sign it. So that was that just, that means you don't have a will. I have to break it to people that they don't actually have a will.
Josh Rudd:
So let's before we get off into the details here, I want to back up and have you tell our listeners, what estate planning means and really just what are the components of a, of a well designed and a complete estate plan that they should consider?
Carolyn Dove:
Sure. So an estate plan really it's just you planning for what's going to happen to your things after you pass away and it kind of says you know what legacy you're leaving to, where is everything going to go and the estate plan would include exactly what it says, a plan for where that stuff goes. So that plan could be listed out in a will. It could be listed out in a Trust. It does need to be some physical document. You know, some people think you can just tell your family where everything goes. That does not hold up in court. You need a physical document that is signed by you in writing. So that's a big part of an estate plan. We also include what we call packages, and that includes powers of attorney, HIPAA authorizations, Advanced directives, because we sometimes feel like that those can be just as important as your will or trust.
Josh Rudd:
Yes. Absolutely, that all sound you make it sound so easy. Why do you think so many families avoid the estate planning process?
Carolyn Dove:
Honestly, I think that people don't like to think about dying, and sometimes people think that if you make a will or a trust or start to plan for when you die, that that you will die. And I mean, we all are going to die someday. We just don't know when. So it's good to have a plan in place, but I feel. Like people think. They they don't want to think about it or they think we've we've got more time and you know, none of us know when that time is.
Josh Rudd:
Absolutely. Now let's separate the. So we've got the procrastinators right and I'm I'm one of those in certain areas of my life, definitely not a state planning, but what's the difference between the individuals that are procrastinating doing this and the individuals that come to see you? What's that catalyst that gets them in the door?
Carolyn Dove:
So a lot of times people have what I call a major life event. So we see young families who have just had a baby and they're starting to think about the future. We see people who have just been diagnosed with some illness that they are have started to realize that they're not going to live forever. A lot of the times we also see families who have just lost someone else, like they may have lost a parent and they say that was a really hard thing to go through. I want to make sure. I have everything all in place.
Josh Rudd:
Absolutely. Yeah. So those big life changes are definitely catalyst here in our practice, they prompt us to step back, take another look at our policy, take a look at our planning just to really make sure that we're heading in the right direction. You know, sometimes you can be really spinning your wheels and and pedaling so hard and you're not heading in the right direction. So it's important that that you step back after this life events and you reassess where you're actually heading. So I want to talk a little bit about just kind of work up to what I would consider to be more complicated. So let's say, you know, if I'm newly married and I don't have any children, are there different considerations for different stages for me than than different stages in in the life cycle, right? When I have children, when I'm a grandparent? There's multi, multiple generations involved. Can you talk a little bit about that?
Carolyn Dove:
Right. And the estate plan can change over time. Just because you have a will when you're in your 20s doesn't mean that will have to be your will when you pass away, you can change it over time and you really should change it over time. You should. Do it when you're when you're younger. I mean, you may not have as many assets as you will accumulate later on in life, so you may just want to take care of your spouse and just make sure that your family knows that you want whatever you do have to go to your spouse, so that would be a good thing to do. As you have kids, some things you're going to need to consider or if something were to happen to you and your spouse, where who's going to take care of the kids. So you need to name some guardians. As you accumulate more assets and your kids grow up and don't need a guardian anymore, you kind of need to think about what do you want to leave to them and how are you going to do it.
Josh Rudd:
What about parents of of minor children? That's one of the challenges that we have in our practice here. Everybody talks about, you know, putting beneficiaries and IRA's in 401K's and, and the like. And we have a lot of families that come in and they really don't have an adult that they feel comfortable listing as a beneficiary. What advice or general advice, can you give to you know, parents with just minor children without a large family?
Carolyn Dove:
Yeah. Well, I can tell them that if you don't pick somebody, then somebody will choose for them. If the time comes that they need a guardian appointed, I mean a a minor has to have a guardian. So look around and talk to people and see what your best option is, because I think it's better for you to pick who your child's guardian would be than for a court to do.
Josh Rudd:
No, I I agree completely. One of the thing that I I know our listeners be interested in hearing from you on is families without children when they get older. If you have a couple that's approaching retirement, they don't have children. They're concerned about care. That's not who they're going to leave things to. But I'm so glad that I have 4 beautiful daughters because I know I'm not going to have problems with care. But what about are families without children? What special considerations should they have as they get?
Carolyn Dove:
Into retirement, right? So they may want to consider what we call long term care planning and that is that is a little different than estate planning because you're looking at where would you want to go for care. You know, you look at what facilities are available. I know a lot of people talk about Medicaid planning, but I would encourage those people to look at what type of care you're actually receiving if you do Medicaid planning, and do you want that. If you've got the ability, you can, you know, make a plan beforehand and decide I want to go here and I want to set up my assets this way in order to be able to. pay for that. You might also look at long term care insurance policies.
Josh Rudd:
Oh, great information. What about blended families? We have a lot of blended families that we work for. Do you have any special advice to give them?
Carolyn Dove:
Yeah. So when I talk with blended families, something that I consider and I asked my clients to consider is when you have an estate plan that only involves wills. As I mentioned before, Wills can be changed at any time. So if one spouse passes away, then the surviving spouse could change a will to whatever they want, so blended families is one of the times that I do recommend that the clients look at perhaps a revocable living trust, because the trust could provide a little more protection as to what's going to happen with the blended with the deceased spouse's children and whether they will received from the deceased spouses.
Josh Rudd:
And I just want to be very clear. I don't know if this is something that that you feel comfortable saying on this podcast, but I definitely will. This we see a lot of cases where we will have a blended family and then one spouse will pass away and and it's very unfortunate that those estate plans can be changed and you know the original beneficiaries, the original children of the deceased spouse, those changes may be made where they're removed from that estate plan and that's those have happened and it's very unfortunate. So I I really think our listeners should take Carolyn's advice to heart here. Last what about grandparents? So let's say I'm a grandparent and I've got two or three generations behind me and I want to direct assets or help in the best way that I can. What's some advice that you can give to grandparents?
Carolyn Dove:
Grandparents are at another side of life where they need to start thinking about, Is there anything that you want to leave, especially to your grandchild? I will say, though, it is very common for grandparents to just say I'm just going to leave it to my children and my children can decide what they want to do their kids.
Josh Rudd:
Yeah, sure. No, that's that's great advice. Any other family situations that that I haven't mentioned that you think warrant to a higher sense of urgency or any special considerations?
Carolyn Dove:
Terminal illness. If you don't have anything in place, it's good to get something in place.
Josh Rudd:
OK.
Carolyn Dove:
It's good to take a look at your estate plan. That's another major life event. I think that's it.
Josh Rudd:
Well, thank you very much. So I want to know, I've always heard in practice that Texas is just not a hard state to go through probate as opposed to, let's say, California or New York or some of the other states out there. I know your expertise is in Texas. Can you tell us a little bit about just generally about the probate process in Texas and? Your experience working for families after the loss of a loved one.
Carolyn Dove:
Right, as long as people have everything in place, it can be a very smooth process. And when I meet with families after someone passed away, then I'm dealing with people who are at a very difficult point in their lives. And so we we want it to be a smooth process. We try to do everything we can in our office to take that burden off of the people who have just lost someone as long as, like I said, as long as things are in place, that's a pretty smooth process. It's one court visit, one hearing where someone gets appointed as an executor, and then usually you have what's called an independent administration where the the executor is able to act without court supervision. In those cases, things things. It's when things haven't been set up that it's a little more difficult because then you have to ask the court to determine who the heirs are and that... It's a bit lengthier of a process, so it's true that in Texas we're we're pretty streamlined. We're pretty much easier than like you mentioned, New York and California, so. In Texas, a lot of times we don't do trusts for the reason of avoiding probate like I know in California and New York, that's touted by some people that you really need a trust to avoid probate there, Texas isn't the same. It's a little bit easier here.
Josh Rudd:
Well, that is a great segue into my next question because I will have families that will hire our firm will come in on a new case. We'll go through investment policy. We'll do a lot of planning and then we'll get to the point in our process where it's appropriate to bring up the need for estate planning. The first thing out of their mouth. We want to trust, and normally it's driven by things that they've heard about, you know, tax savings. Privacy. So talk to us a little bit about why an individual or family might want to look into a trust. Why would that be appropriate.
Carolyn Dove:
OK. So there's different types of trusts and you mentioned privacy. The most common type of trust that a lot of people talk about is a revocable living trust. That's the type of trust that we would use in what I would call a basic estate plan. We would use that like I mentioned, with blended families, we would use that in that situation we would use that if there's a a beneficiary, maybe a child, who kind of needs to be protected from themself. So the trust would allow the people who are making the trust to actually protect those assets a little more. If someone owns real estate outside of Texas, then we also might look at a trust just to avoid probate in another state as well as because Texas is a pretty straightforward process, but other states may not be.
Josh Rudd:
OK. Really about control.
Carolyn Dove:
It is a lot about control. Yes it can. It can extend the control you have over the assets even after you pass away.
Josh Rudd:
OK, but what about the privacy part? Does it really keep the entire process private, safe from errors and and folks that just might have a curiosity in what's in your state?
Carolyn Dove:
Yes, it can do that, because a will if you have to probate a will, you have to file that at the courthouse and that becomes a public record that becomes a record in the minutes of the Court. If you have a trust that is not filed in the probate process, instead what you have if you ever had to go through probate with the trust, you would have what's called a pour over will. And that's just a real simple will that says I'll leave everything to the trust.
Josh Rudd:
OK.
Carolyn Dove:
And then your trustee takes over and manages whatever's in the trust.
Josh Rudd:
OK, now most of the time when I hear about trust, there's this idea that, oh, I'm going to put all my stuff in a trust so I don't have to pay taxes. Can you talk a little bit about that living trust?
Carolyn Dove:
That's actually called a see through trust in terms of the IRS. So basically it's you. Still uses your Social Security number. Any income that you earn is still reported on your tax return. If even if the assets within the trust and has the trust name on it, that's still reported on your tax return so. You don't have any tax savings with revocable living trust.
Josh Rudd:
What about the estate taxes and the estate tax exemption? How does that work and how can?
Carolyn Dove:
Trust help so that doesn't apply to a lot of people, but to anyone it does apply to then you get whatever your exemption is. You pay tax on the amount in your estate that's above that exemption. So the types of trust you can use to help with the estate tax would not be revocable trust, they would be irrevocable trust, specialized types of trust that you can have set up for for that as well.
Josh Rudd:
OK. Well, so one of the things I'd like to ask about before we conclude here is the importance of setting up the healthcare directives as a part of the plan. I know that when you will come in and assist some of our. Clients, that's something that I hear you discuss. Can you briefly walk us? Through the healthcare portion of an estate plan.
Carolyn Dove:
Yeah, two documents that we include with any estate planning package that we do, one is called a medical power of attorney and then one is called an advanced directive. The medical power of attorney allows you to select who you would want to make a medical decision for you if you're not able to do it. It doesn't come into play if you're still able to make your own decisions. You can make your own decisions for as long as you want. But if you can't, then you appoint someone to make those decisions for you and the other document works with that. It's called the advanced Directive that allows you to say what type of treatment you would want in the future. If you're not able to make your own decision.
Josh Rudd:
What is a DNR?
Carolyn Dove:
A DNR is a do not resuscitate. We don't do those in my office because those mean you don't want to be resuscitated. Like if you got hit by a bus, you wouldn't want to someone to try to save your life. So we don't do those for our clients. Some of our clients who are closer to the end of life may have those done by a Hospice care worker or a nursing home worker, but our office doesn't do those because those are more drastic than the advanced directive.
Josh Rudd:
And I appreciate the explanation. Lastly, can you talk to us a little bit about when someone would want to look into a power of attorney?
Carolyn Dove:
I think anyone should look into a power of attorney because nobody knows what's going to happen to you. And if you don't have anything set up then by the time you need it then it could be too late. I I think anyone could do a power of attorney at any time is a great.
Josh Rudd:
Sure. Good advice. Are there any other common legal matters that you feel our listeners should be aware of?
Carolyn Dove:
In terms of estate planning, I did just want to point out that estate planning can help anyone. So you hear you might hear some people say I I don't have any assets or my family is so easy that everything's going to be fine. You might think that. But by the time you actually need something in place, it is too late because you're gone. So I would just suggest to anyone, no matter what the size of your estate is, no matter what your family dynamic is, it's a good idea to look into estate planning.
Josh Rudd:
Well, that's excellent advice that I'm sure our listeners would appreciate. Well, Carolyn, thank you very much for being our guest on our show today. If our listeners have any follow up questions, how can they contact you?
Carolyn Dove:
The easiest way to reach us would be looking at our website, which is www.thedovefirm.com and you can find our phone number there which is 817-462-0006.
Josh Rudd:
Well, thank you for being on our show today and I'm sure our listeners appreciated all the advice you gave them regarding the estate planning process and what to do in some of these situations that everyone is going to encounter sooner or later. Well, as always, I'd like to thank all of you for taking the time to listen today. If you enjoyed this episode to learn something new, please take time to rate. Our podcast and subscribe on Apple Podcast, Google Play, or Your preferred podcast platform and never miss an episode. Also, if you know other investors that would enjoy the show today, please share the Rudd Commentary podcast through e-mail or on social media. We also like feedback on our program and ideas for future topics if you have the time we would enjoy hearing from you, all of us here at Styre wealth would like to thank you, our investors and clients for your trust. Thank you for allowing us to be your partner in your long term financial journey. We take our role very seriously. Thank you very much for listening today. This is the rude commentary. I'm your host, Josh Rudd. And from all of us here at stairwell, invest long and prosper.
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