Ron Stark: We are joined, as we are each week, by Larry Brock of the Brock Law Offices out of Chino. Larry, you come on the show and educate us about the importance of estate planning in such a variety of ways. I wanted to ask you, I’m curious, we just narrowly survived this fiscal cliff thing. At least we’re to believe that we narrowly survived it. It has had some major tax implications. Is that something people should be thinking about in terms of their estate planning.
Larry Brock: Let me tell you how it affects estate planning. Last year the estate plan I would do for you is the same as the estate plan I would do for you today.
Ron Stark: Okay. That’s a good thing.
Larry Brock: It had absolutely no effect. If you have an estate over $10 million it still has no effect. Last year you could give away five million dollars, your spouse could give away five million dollars, and not pay any taxes. This year same thing. If you’re like many of us, we don’t have five million dollars and our spouse doesn’t have five million dollars so-
Ron Stark: I don’t have a spouse so that makes it even tougher.
Larry Brock: If you have more than five it’s tougher to give it away without paying taxes. What it comes down to is what are the tax implications? What are the estate planning implications in taxes? Taxes is not, and should not be, the driving force of estate planning. The fiscal cliff doesn’t impact estate planning. The reasons for estate planning are because you care about your family and you want to protect them in ways that they can’t protect themselves.
Ron Stark: You want to leave a legacy.
Larry Brock: You want to leave a legacy. The things you do and say here, and in your business and in your life, that’s what’s important. As we were talking beforehand things in the world today and I said, “If you want to really know about something ask me about it afterwards what was taking place in the sixties.” To record that story and provide that story to my children and grandchildren is part of estate planning, the legacy. Estate planning today is taking care of you if you become incapacitated. You realize, don’t you, that you’re six times more likely to become incapacitated this year than you are to die.
Ron Stark: We’re living longer but our bodies are failing.
Larry Brock: That’s right. Who’s going to care for you and how are they going to take care of you if you become incapacitated? What does it mean?
Ron Stark: How do I want them to take care of me?
Larry Brock: Right. What’s the definition of incapacity? That’s part of the plan. A good living trust will define incapacity and set somebody up to take care of you. Then when you pass away, in a husband and wife situation, what happens to the assets? Can we protect the surviving spouse financially and emotionally? That’s a major part of estate planning. Emotionally what I mean is today more and more surviving spouses live longer and remarry. They’re concerned that their assets go to the children of the first marriage. We can design it to financially have implications if they remarry and prenuptial agreements, which protect financially and emotionally. Maybe you don’t want to ask for a prenuptial agreement, but this designs it so you do. Finally, it goes to the children. Do you write your children a check? Do you have children?
Ron Stark: I do, two teenagers. That’s why I have so little hair.
Larry Brock: You know what would happen if you gave your 18 year old son a big check today?
Ron Stark: Most of it would go to the government?
Larry Brock: No.
Ron Stark: He’d blow it?
Larry Brock: Yes. How long would it take him to blow it?
Ron Stark: Real quick.
Larry Brock: Real quick, but you can give it to them in such a way that they don’t blow it. That it encourages them in the positive parts in life you want them, and discourages them in the negative sides. You can give it to them so that when they marry that sweet wonderful person they can’t lose it if the marriage falls apart.
Ron Stark: Nice. If someone is hearing this and thinking, “I need to look into all of this.” How would they get ahold of you.
Larry Brock: They could call me, the Brock Law Offices 9095909545. Go to my website, www.trustedprobatelawyer.com. You can call and ask for my new book. We’ll send it to you free of charge.
Ron Stark: Wonderful Larry. Thank you for joining us as you do each week. We will be right back.