We are thrilled to be connecting with Heidi Thompson, EdM, JD again. Heidi is a business owner and an Attorney and is also a content partner. Content partners help Voyage in so many ways from spreading the word about the work that we do, sponsoring our mission and collaborating with us on content like this. Check out our conversation with Heidi below.
Heidi, it’s been too long since we last connected. Thanks so much for taking the time to share your thoughts with our community again. Some readers might have missed our prior conversations, so maybe you can kick things off for us with a quick intro?
I am a long-time educational counselor and behavior specialist who now runs a legal practice in estate planning in Phoenix. Instead of helping teachers and students in public schools, I now use those same teaching, counseling, and coaching skills to help families “lifeguard their legacies”–ensuring that what they’ve worked for goes flawlessly through their will or trust to those they love and the causes they care about.
Alright so before we jump into some questions about your expertise, we just want to reminder readers that the following shouldn’t be viewed as advice, it’s for educational purposes only. With that – can you share your view on what the benefits of a will are?
Sure! Think of a will as a letter to the probate court that helps get your lifetime’s belongings into the right hands. For young families, a will allows you to choose the guardians for your minor children, so that there is no legal fight and so that children do not end up “in the system.” A will also allows you to appoint caretakers for your fur babies. A will distributes your belongings in “one fell swoop” as a lump sum after your home and tangible goods are distributed and sold. A will, by itself, does not avoid probate. But with some good asset planning, a will-based plan may avoid probate.
What does a trust do?
Just like a will, the Trust helps ensure that the right family members inherit your belongings, but a Trust does so much more! The most common type of Trust is the “Revocable Living Trust.” First, it is “revocable,” meaning it can be changed, replaced, restated, or revoked during your lifetime. Next, it is “Living.” When you die, the Trust goes on living. So everything owned by the Trust avoids probate. With good planning, a Trust is a great way to avoid the costs and inconveniences of court for the family members who outlive you. There are 3 or more roles in a Trust. The Grantor (sometimes called Settlor or Trustmaker) is the one who creates the Trust. The Trustee is the one who maintains the Trust, puts belongings into it, and makes decisions for the Trust. And the Beneficiary is the one who receives the benefit from the Trust. During your lifetime, you are in all three roles. So really, the Trust is just a mirror image of you. But when you die, you get to choose who serves as Trustee and who the beneficiaries are of what is left over. The Trust is a more seamless way to provide for incapacity than with a Power of Attorney. Because the Trust should already “own” all your belongings, if you are incapacitated, the Trustee just continues to take care of you as the beneficiary of the Trust. It is much less complicated than using Powers of Attorney at banks and investment companies. The Trust allows you to structure distributions over time. This is my favorite feature and the main reason that I enjoy helping clients with trusts. Just like a lottery winner ends up more broke than before they bought the ticket, sometimes inheritances become more of a burden than a blessing to those not prepared to take on a large lump sum. You can structure giving to last for generations, enhancing lives without your kids quitting their jobs and becoming “trust brats.” The Trust allows you to place conditions on giving, keeping some control from beyond the grave. (Insert your most villainous laugh here.) But seriously, it’s your money. If you don’t want it spent in certain manners, or by those engaging in certain behaviors, why shouldn’t you be able to make those conditions? This can help ensure that your value-based legacy continues. The Trust provides “stupidity insurance” for the next generation. As long as your children are not serving as the Trustee for themselves, the acting Trustee can withhold distributions while your kids are in the middle of divorce, bankruptcy, creditor disputes, or lawsuits. The Trustee can often even pay bills for your child directly without any money hitting an account and becoming attachable in a legal proceeding. I could go on and on. But really, if you can imagine it, and if there is someone willing to manage it, a Trust might be able to accomplish it.
In your view, does a trust protect folks from lawsuits? If so, how?
While there are such things as “Domestic Asset Protection Trusts,” they are rare and are very expensive. You cannot use a standard Revocable Living Trust to avoid paying your own creditors during your lifetime. In general, a Trust will not protect you from your own choices. But, as noted before, it does provide lawsuit protection to your children (as long as they are not serving as their own Trustee). However, a Trust can serve as one of many parts of a good asset protection plan, particularly for business owners.
What does it cost?
There is a wide variance in the costs of wills and trusts. I use a fixed-package pricing model based primarily on family structure. So single people are $800 for wills and $2500 for trusts. Married couples are $1000/$3000. Blended families or cohabiting partners/couples are $1200/$3500. All packages include one deed recording, financial power of attorney, healthcare power of attorney, living will, HIPAA waivers, and asset planning. I am happy working with Financial Advisors, Insurance professionals, and CPAs to form a team that supports the client.
What is your process?
I am very client-centric. Clients choose whether the first meeting is by Zoom or in person at their home, place of business, or favorite restaurant or coffee shop. Clients get a free copy of my book “Lifeguard Your Legacy.” Most of the time, we can accomplish the entire intake and decision process in that first meeting. Occasionally there is a bit of email homework after the first meeting and we have to have a short second discussion. Clients complete NO paperwork or intake forms. I interview them, take notes, and ask the questions I need to know how to draft a plan. Then I go to work drafting the client’s plan. We meet 1-2 weeks after the first meeting on Zoom and go through all the key provisions of the client’s documents. The clients get to provide direct input for immediate changes. In most cases, the documents are complete at the Zoom meeting and all we have to do is meet with witnesses to sign the documents. Again, I come to the client. Then I take the originals back with me to scan into “My Life and Wishes,” a specialized secure portal that is an additional benefit to my clients. I priority mail return the documents. Then if the client has a Trust, I assist them with the Trust funding process. Every two years after working with me, clients will receive a series of emails with homework to review their documents. If changes need to be made, I charge just an hourly fee for the time, which rarely requires more than an hour.
In your view, how often should someone update their will or trust?
Wills and Trusts need to be changed with every major life change: moving to another state, marriage, divorce, new child, grandchildren, business changes, a large inheritance, etc. While we try to write the Trusts to envision all the future might hold, it isn’t a bad idea to look over the provisions about every two years to just see if they still make sense. Of course, every so often, a big law changes the whole world of estate planning. One such law happened in December 2019, “The Secure Act.” Among other things, the Secure Act made it so that grown children inheriting IRAs would have to receive the full distribution within 10 years, and pay all of the Capital Gains taxes in those years. That meant that for many Americans, whose primary investment other than their home was in IRAs, now had to rewrite Trust plans that would have stretched those payments out over their children’s lifetimes. Not good. If certain proposals are passed under the current administration, higher income earners may be meeting with their attorneys and CPAs to revisit their tax strategies. We are all waiting to see what will transpire in the next two years.
Thank you so much again for sharing all of this with us. Before we go, can you share with our readers how they can connect with you, learn more or show support?
My website is really the best resource: https://www.lifeguardinglegacies.com. I have several recorded videos on the homepage, and take occasional inspiration to write blogs. You can subscribe to download a free copy of my book at: www.lifeguardinglegacies.com/book-freebie. (This is ordinarily $9.95 on Kindle or $14.95 for a hard copy on Amazon.) I also encourage you to like and follow my Facebook business page at https://www.facebook.com/lifeguardinglegacies. You can find me on Linked-In at https://www.linkedin.com/in/heidithompson. Businesses can connect with me on Alignable at https://www.alignable.com/phoenix-az/lifeguarding-legaices-pllc. My YouTube Channel is https://www.youtube.com/channel/UC2D7WpEjhD7tYYJtGh9ePQG. (I need followers to get a shorter URL.) Of course you can always Google my business: “Lifeguarding Legacies.”
- Website: https://www.lifeguardinglegacies.com
- Facebook: https://www.facebook.com/lifeguardinglegacies
- Linkedin: https://www.linkedin.com/in/heidithompson
- Youtube: https://www.youtube.com/channel/UC2D7WpEhjD7tYYJtGh9ePQg
- Yelp: https://www.yelp.com/biz/lifeguarding-legacies-phoenix
- Other: Pinterest – https://www.pinterest.com/mtmailbox/boards
Professional Images Courtesy of Cindy Quinn of CMQ Photos Speaking Image Courtesy of Glenn Mire of Mire Images Photography and Videography Caricature Courtesy of Andre Bland