Estate Trusts Aren't Just For The Rich & Famous

0:00Welcome to Love, Death, and Money. I'm your host, attorney Nas Barudi on Talk Radio 790K ABC. If you have a question about Trust's Will's probate call the station right now at 1-800-222-5222, that's 1-800-222-K ABC. If this is the first time you're joining the program, welcome. My name is Nas Barudi. I've been practicing law in Southern California for the last 15 years, focusing my practice on making sure that my clients have the proper legal documents for the day that they pass away or become incapacitated. Now, if you don't have a plan, the state of California has one for you, and trust me, you are not going to like it. For the next hour, I'm going to share with you some general information that will help you decide how to better protect your family. As always, this information is general in nature. You should consult an attorney about your particular situation. To get more information about my practice, you can visit my website Barudilaw.com.

1:01That's B-A-R-O-U-T-I-law.com. If you'd like to order a copy of my best-selling book, Love, Death, and Money, you can get it on Amazon.com. This is a legal guide for you on how you can protect yourself during different stages of life. Again, the book is called Love, Death, and Money, and you can get it on Amazon. Now, 70% of Americans do not have an end-of-life plan, which means that they are relying on the state that they live in to take over their estate when something bad happens. Now, this plan that the state of California has for listeners right now, if you don't have a plan, you're not going to like what it entails. I want to go over that very briefly so you can have an understanding of what it's going to look like. If it makes more sense for you to become more proactive in creating a plan for your family where they do not have to go through the state, through the courts, to be able to access the assets that you leave behind.

2:04Now, there is a misconception that when we talk about end-of-life planning or writing a trust, a revocable trust, having a will, there's this misconception that you have to be rich to create this. This is only for the rich and famous, but the threshold for this court proceeding that I'm going to talk about is not that high. This is not in the millions. So it used to be $184,000. If your assets added up to $184,000 or more, then your estate would have to go through this court process. Now, that number is $208.50. So it's under $210,000. If your estate is under that, $209,000, let's just say, your estate is going to have to go through a court proceeding if you do not create an end-of-life plan. Now, why is this plan so bad? Why would you not want your family to go through it?

3:08Number one, it is highly expensive. So when your family has to go through this court proceeding, which is called probate court, that's the court that administers your estate when you don't have a written plan, they will have to hire a probate attorney. probate attorneys are able to charge in two ways, statutory fees and extra ordinary fees. So extra ordinary fees, let's get that out of the way. It's pretty straightforward. A lawyer can charge additional hourly fees for any litigation issues in the case, tax work, selling real estate. This can often double or triple expected costs. So that's extra ordinary fees. On top of that, they are able to charge statutory fees. That means, based on the value of the estate, an attorney can take a percentage. You cannot negotiate this, you cannot try to bring it down. No attorney will try to negotiate these fees with you. What's in

4:11place is what's in place. Now, maybe hourly fees, they're willing to work with you, but statutory fees, they're not. So for the first $100,000, they're able to take 4%, which is $4,000. Just right there, let's just pause $4,000. Some of you listening right now, your legal bill to create an end of life plan may be significantly less than $4,000. Significantly less. But just the first $100,000 value of your estate, they can take 4%, that's 4 grand. The next $100,000, they take 3%, that's $3,000. So we got $7,000 here. Then the next $800,000, they take 2%, that's $16,000. The next 9 million, they take a percent, that's $90,000. So with statutory fees and extra ordinary fees, I have seen some states have to pay out six figures to the attorney to help them through this process.

5:15And in my opinion, it makes more sense to work with an attorney now to create an end of life plan where your family doesn't have to even go through probate court. But in addition to the expenses, this process is highly time-consuming. So it can take anywhere from six months to two years to go through this process. I've never seen a probate case start to finish end in six months. So I'm just being really generous by giving that six month mark. You're looking at two years, easy. Two years to go through this process. Some of you may think, okay, well, I have the time. It's not a big deal. But you don't. Because while you are waiting to go through this process, the loved one that passed away, their assets become frozen. That means you cannot access bank accounts. You cannot sell real estate. You cannot liquidate retirement accounts. If life insurance policies didn't have a beneficiary,

6:16that means you still have to wait till you get court approval to be able to access these assets. Now, that is a difficult place to be because one, you want to get access to what legally is yours. But two, that means if there are bills to pay, car notes, student loans, credit card bills, mortgages, you're going to have to maintain those bills. And you may have to pay out a pocket so that the house doesn't go into foreclosure. The cars don't get repossessed. Credit cards don't go into collections. There's so many factors and moving parts that you have to be aware of. This process, this plan that the state of California has for you is not ideal. So we're talking about expenses. We're talking about this process being time consuming. We're talking about not having access to the assets until this is over. And on top of that, everything becomes public record. So my take on this is based on the last 15 years, I've seen

7:21a lot of probate cases. I've had many people call me and discuss the issues that arise when going through probate. And I can tell you that when this becomes public, there are going to be people that are going to contact you or try to file a petition with the court that they're entitled to a percentage of the estate. People will get really creative about, oh, well, this person owed me this and all of a sudden a document appears and it's not notarized. It's not dated. And they just will tie the case up in probate court, which delays you getting what is rightfully yours. So this is not an easy process. This plan that the state has is not ideal. The alternative is for you to create a plan while you are alive, while you have capacity where you can decide how your assets are distributed without court approval, without court supervision, without attorneys needing to be involved. But timing is everything. Not having a plan is like driving your car without your

8:28seatbelt on. If you get into a car accident, it's too late to go back and put your seatbelt on. Now, despite me describing the downfalls of going through probate, there are still listeners and people that I come across that say, well, I'll just let my family deal with it. But let me ask you this, if the biggest asset you have is your home and your family needs to keep the home to maintain their lifestyle and there's no cash in your estate, where are they going to come up with the fees to pay an attorney? Because an attorney is going to want to know, all right, the biggest asset is a home. You don't want to sell it. So we can't collect our fees when we open S-grow after S-grow, everything is closed. So where are you planning? How are you planning on paying us? That means your family is going to have to come up with the cash, either getting alone or bartering it from friends and family. You're putting your family in a very difficult situation. When you could have

9:30just gone to an attorney, paid a couple thousand dollars and there would be no need to go through the probate process. If you're just tuning in, you're listening to Love Death and Money on Talk Radio 790K ABC. If you need to create a end of life plan and you've been putting it off for way too long, I want you to give my office a call right now at 424-465-90003. That's 424-465-90003. Or you can visit my website, barootilaw.com. That's B-A-R-O-U-T-I-Law.com. Again, the number to reach me 424-465-90003. We're going to take a quick break and when we come back, we have Tina Barooti, founder of New Capital Insurance Solutions joining us. You're listening to Talk Radio 790K ABC. Welcome back to Love Death and Money. I'm your host, attorney Nas Barooti on Talk Radio 790K ABC. If you have a question about Trust Will's probate call the station right now at 1-800-222-5222,

10:35that's 1-800-222-K ABC. We've been talking about the importance of end of life planning because if you don't have a plan, the state of California has one for you and trust me, you are not going to like it. Now, one of the most important conversations that I start with my clients when we're talking about end of life planning is also financial planning. Our guest tonight is Tina Barooti, who is the founder of New Capital Insurance Solutions. Her office is based in Southern California and many of our clients work with her. She focuses on risk management through insurance, annuities, long-term care, and life settlements. You can find more information on her practice by visiting newcapitalinsurance.com or calling her directly at 424-465-90001. That's 424-465-90001. Welcome back Tina. Thank you for having me on the program, Nause. If you're just tuning in, my name is Tina Barooti. I am licensed with the California Department of Insurance, license number 428-7218. I am the

11:43founder of New Capital Insurance Solutions, license number 6011-901. Now, before we begin, it's important to know that these opinions are for general information only and are not intended to provide specific advice for any individual to determine what may be appropriate for you, consult your financial professional prior to investing. Now, in the insurance industry, we recognize the month of September as life insurance awareness month. So, all month long, I want to talk to all of you listening about the importance of ensuring your life. Now, think about it. We ensure almost everything from our electronics to our vehicles to our jewelry, our homes, our pets. So, why not ensure the most precious thing of all, which is your life? Having a plan in place, which includes not only life insurance, but also retirement planning like newities or long-term

12:48care should really be viewed as an essential component of your financial wellness. Can you break down for our listeners the different types of life insurance? Because I think that's that's a big question when we talk about this topic. Totally. Now, there are so many types of life insurance. Many people obviously don't know where to start. That's understandable. And that's why it's so important to work with a financial professional to determine which option is the right fit for you. So, when you meet with us at New Capital Insurance, we know that one size does not fit all. So, we sit down with our clients to better understand their goals and we'll recommend one of several types of life insurance or a combination. So, the top three I want to go through. First, we have term life insurance, which as the name suggests, it covers you for a set term. That can be 10 years, 15, 20 or even 30 years in length. Term life insurance, it does not build cash value,

13:58but there is a death benefit. And it's generally more affordable than permanent life insurance. So, very often we combine the permanent life insurance policies with term policies for an even greater death benefit so that whoever is being insured can leave that behind to their family. Now, a term insurance policy is less for you and more so for those who have to carry on without you once you've passed away. Also, at the end of that term period, you may be able to renew your term policy or convert it to a permanent one. The second option that we recommend to clients is whole life insurance. Now, this is a type of permanent insurance that gives you coverage for your entire lifetime. There's typically a savings component that a portion of your premium will pay into that has a fixed interest rate and it builds cash value over time. And one of the great

14:59benefits is that you can withdraw some of that cash value as a life insurance loan, which you repay with interest. But generally, that interest is a very low rate. Now, the third option is an indexed universal life insurance or IUL. This is another permanent life insurance option, but we love it because it offers more flexibility than whole life. For example, you can increase or decrease your death benefit. You can adjust or skip your monthly premiums with certain limits. Additionally, the money in your cash value account can earn interest through a stock market index that you select, such as the SMP 500 and we can help you select those indexes. There are also insurance products on the market that have these optional add-ons that help you customize your policy's coverage. That's amazing. And I'm a big proponent of IULs.

16:00I have one myself and I'm so happy the time I got it because I thought I don't need it. I'm a single woman. I don't have money, but I don't know what's going to happen. Can you discuss some of these customization options that are available? Yes, of course. So there are add-ons known as riders that you may be able to tack on to your life insurance policy. So some of the more popular ones include the accelerated death benefit or a long-term care rider. With this rider, if you're diagnosed with a qualifying serious or terminal health condition, you can claim a payout from your death benefit while you are still alive. Now, I've talked at great length about how important long-term care planning is on this program. So this is one of the ways that you can get some sort of coverage. A lot of younger people opt for this rider. There's also the waiver of premium disability rider, which allows you to wave your

17:03policy's premium if you got forbidden. You develop a qualifying disability and you can no longer work. There's also child and spouse riders, which pay out small death benefits if the insured child or spouse passes away during the rider's term. People can use this money to cover medical bills, to cover funeral expenses. You know, all the time we go online, we see people using outlets like GoFundMe, right? And reaching out to their community to raise money for medical expenses or funeral expenses. So having a life insurance policy can help with that. Now, these are just some examples of how you can customize your life insurance coverage to your specific needs. If you're just tuning in, you're listening to Love, Death, and Money on Talk Radio 790K ABC. We are here with our guest Tina Berruti from New Capital Insurance Solutions, who is discussing life insurance awareness month. If you are interested in learning more about life insurance,

18:05you can visit her website at newcapitalinsurance.com. That's newcapitalinsurance.com. Or you can call her office directly at 424-465-9001. Again, the number is 424-465-9001. Tina, in your experience, what are some of the misconceptions people have about life insurance? There's so many. Now, many people, they view life insurance solely as a death benefit. For example, if you have a $1 million permanent life insurance policy, you're a beneficiary, whoever you designate to inherit that death benefit gets that $1 million tax-free. But life insurance is not just about a death benefit. It can play a much broader role in a client's overall financial strategy. For example, for many permanent policies, there can be living benefits, believe it or not. Like I said earlier, you can use

19:07your policies cash value in what's called a life insurance loan. And then, if you add on those benefits like those critical illness riders, which will help you pay for your long-term care expenses, you can cover your in-home care. That's just an example. Another misconception is that through your employer-sponsored plan, you're already insured. You have enough. Well, that coverage may not be enough. And it may not come home with you should you leave that employer. So you need to make sure you fully understand your work-sponsored life insurance policy. And a lot of my high net worth clients, they don't realize that they can use life insurance for legacy planning, for tax planning. Many high net worth individuals may not be cash rich. Right? They need some cash to pay for property taxes, but they're not liquid. Also, when they pass, their heirs are often left with a massive estate tax bill. Having enough life insurance can leave your beneficiaries with some financial relief,

20:13allowing them to cover all of those expenses when you're no longer around, and they don't have to chip away at their inheritance. So ask yourself, if you're the breadwinner, how would your passing affect your family's lifestyle? People are also unaware that they can use life insurance to support a business. So with a key person policy, should you or a key employee pass, you can ensure that the business has enough cash to stay afloat. So ensuring yourself is really one of the greatest gifts that you can give not only yourself, but your loved ones. Who should be thinking about life insurance coverage? Well, I encourage everyone to consider a life insurance policy. Of course, the younger and healthier you are, the better your rating generally. But my motto is, it's better late than never. Like, right now, for example, I have a client who's in his 70s who's purchasing life insurance to leave

21:17something behind for his children. So younger and healthier you are is better, but it's better to do it than to not do it ever. And if you're listening right now, you're interested in getting your finances in shape. Remember that having a life insurance policy is an essential component of your financial wellness. It will provide you with a piece of mind. If you already have life insurance, you can send us your policy. We will review it for free. And we can even help you upgrade your plan if needed. After a major life event, say you bought a policy when you had your first child. Now you're on child number three, or you just bought a new home. You may want to up your coverage or add additional benefits to protect your family and your assets. If you give new capital insurance at 424-465-9001-A-CALL, that's 424-465-9001, our team can help you get started. You can also visit our website newcapitalinsurance.com.

22:21That's N-E-W-C-A-P-I-T-A-L insurance.com, where you can fill out our new client intake form, and we will get back to you within 24 hours. Thanks so much, Tina. That was Tina Barudi at New Capital Insurance Solutions. If you are interested in getting a life insurance policy or want Tina and her team to review your existing policy, you can find more information online at newcapitalinsurance.com, or you can call her directly at 424-465-9001. That's 424-465-9001, or you can email her at Tina at newcapitalinsurance.com. You're listening to Love, Death, and Money on Talk Radio 790K ABC. Welcome back to Love, Death, and Money. I'm your host, Attorney Nas Barudi on Talk Radio 790K ABC. If you have a question about Trust, Will's probate, call the station right now at 1-800-222-5222. That's 1-800-222-K ABC. You shouldn't be shy about asking your question. I know many people

23:25call the next day. They'll call the office, and they'll say, I thought I would have a stupid question on the air. There's no such thing when we're talking about legal concepts and end of life planning. So definitely call if you have a question. For those of you that like to order a copy of my bestselling book, Love, Death, and Money, you can get it on Amazon.com. It's available in paperback and Kindle version. This is a legal guide for you on how you can protect yourself during different stages of life. The first part of the book goes through what's end of life planning, and the second part is traps to avoid. These are stories of individuals, some who had plans, and some who did not, and the devastating consequences they had. Again, the book is called Love, Death, and Money, and you can get it on Amazon.com. Again, if you want to get more information about my practice, you can visit my website, barudilaw.com. That's B-A-R-O-U-T-I-Law.com. We've been talking about the importance of end of life planning. 70% of Americans do not have an end of life plan, which means that their estates are going to have to go through probate court, which is expensive,

24:30time-consuming. You're not going to have access to the assets that are left behind until the proceeding is over, and everything becomes public record. The solution is while you are alive, while you have capacity to create an end of life plan, where you are still in control over your assets while you are alive. If something bad happens, you have all the right people in place to make medical and financial decisions for you or to manage your estate. Even if you pass away, you are still able to control from the grave how those assets are to be distributed, meaning that you are allowed to put conditions and restrictions. If you want to make sure your children reach a certain age, you can put age restrictions. If you want to make sure that they go to school or keep a full-time job, these are restrictions that you can put in place, but you have to have the right setup, meaning the right people to manage the estate. In the legal world, we call it successor trustee. Like the word says trustee, it should be somebody that you trust to

25:37take over and manage the estate. Now, I have seen many people become really creative in how they go around this conversation about end of life planning. Many don't like to have this conversation because at the end of the day, who wants to go sit in an attorney's office and talk about death, and family dynamics, and drama, and all that. So many people don't want to do that, and they don't want to pay the fees to deal with an attorney. So what they do is they either use online resources to become very creative in creating estate plans, or they'll use chat GPT, which I do not recommend. Or one of the biggest issues that I see and mistakes that I see is parents will gift their biggest asset to their children while they are alive. And the biggest asset is their home. And they think

26:37that by gifting their home to their child while they are alive, this will bypass all the potential issues of probate and not having to deal with an attorney and so forth and so forth. But what they fail to realize is all the other issues they are creating for themselves. And they may just not be aware of it, or they're getting bad advice, or again, they're using online resources, and that's why it's creating issues. Now, one of the things, one of the issues that are created is loan issues. Just a quick question. The caller on hold, are we ready to go with that one? Because there's no, okay, cool. Can we actually go to a caller? I rather answer this question before I get into all the details. David, you're on the air on talk radio, 790K. We see what's your question. Hi, I have a national living trust, but I can't get an answer

27:44from my bank. If one of us dies, what happens to my checking account or my savings account? Do I have a joint tendency in common, or do I have a survivorship, you know, tenets in common, or a joint tendency with survivorship for the asset? So let's back up here. The trust that you have, did you create the trust with your wife, or is the trust just in your name? Let's start there. It's both of us. Yeah, it's a nationally company that did it for us. Okay. And then the bank account that you have, when you opened it, did you open it under both your names, or just one of your names? Well, we opened it for both of us, and she also has an individual bank account. Okay. So when you created the trust, did you take the trust document to the bank to transfer the ownership of the accounts to the trust? Yes, I did.

28:49Yeah, it is under the trust. So when your bank statements come, they come underneath the name of the trust, correct? That is correct. Okay. So if something happens to one of you, the survivor has full control over that bank account unless you wrote something in your trust that says, you know, after my death, like if your wife has an account just in her name, if she has a condition in the trust, if she passes that it's supposed to go to a specific person, then you as the surviving trustee still have access to it, you can manage it, but you would have to give the funds to whoever she selected. If everything is just supposed to go to the surviving spouse, you as the surviving trustee and the surviving spouse will have full access. So you're good as long as your account is titled under the trust name. You don't find the banks do hold half the funds. It's not a problem.

29:54No, no, it's not a problem. The only issues that come up is you do have to wait for a death certificate to be issued to remove that person off, you know, the account. And also if you lose, let's just say the original copy of the trust. Sometimes that becomes an issue. So I would recommend that you always keep copies of everything so that there's no, you know, issues. But the bank should have the certificate of trust on file. That's the document that's used to transfer accounts under the trust. They may not have the full trust. You don't need to give them the full trust, but just make sure you have copies. Right. I just can't get the bank to tell me what kind of a example that I have. Yeah, they won't tell you that. They won't tell you that because now it's now it's in the trust. So it's in the trust name. But your trust most likely was registered under your social security numbers. So if something happens to one of you, the survivor will still have

30:54access to that account. You're the best. Thanks for that answer. You're welcome. Have a good night. All right. So let's go back to gifting your home to your children. Why do we not want to do that? Many of you listening right now have mortgages on your home. And in your loan agreement, the lender says, Hey, we're going to give you this loan, but there's certain conditions you have to meet. And if you violate some of these conditions, we can call your loan. That means that you have to pay back the balance of the loan within 30 days. One of those clauses is an acceleration clause that says, if you transfer the title of this home to somebody else without our prior approval, we can call your loan. So what ends up happening is many parents are just gifting their homes to their children without standing debt and not notifying the lender. So sometimes what the lender will do is they'll do sweeps. They'll just pull up the titles randomly to check to see if the person

31:57they gave the loan to is still on title. If they do that and they find out that you've added someone or transferred the ownership completely to somebody else, they can call your loan, which means in 30 days, you have to pay back the balance of the loan. You don't want to create an issue with your lender. You don't want them to cancel the loan. I've seen situations like that. So that's the one reason why you should not be giving your home to your child just outright. Second, when you transfer a deed, a property to a child and you're gifting it, you have to file a gift tax return. Many people are unaware that they have to meet this requirement. What that means is that if you're gifting an asset or you're giving a monetary value of $19,000 or more in one calendar year, you have to report it to the IRS. So in your lifetime, you can gift $15 million. So let's say your home is a million dollars. You're not going to get taxed by filing the gift tax return. You're just putting the IRS on notice and saying, Hey, here's an appraisal of my house. Here's my gift tax return.

33:02I gifted my home. That's a million dollars to my son. And I want you to deduct the million dollars from the 15 that I have in my lifetime. That's what it entails. Now, many people failed to file this and the IRS finds out how do they find out? They go to the assessor's office and they say give me records of all the deeds that were gifts. They will pull up your social. They will check to see if you file the gift tax return. If you did not file a gift tax return, they can penalize you. That creates issues with the IRS. So another reason why you shouldn't just be gifting your home to your child. In addition, they're going to lose the step-up basis when they go to sell the house. What does that mean? So if you bought the house, let's say in 1950 and it was $200,000. And then you pass away in 2027, 2028. And your child decides that they want to sell the house now. And it's in a trust. They're not going to value the house at the 200,000 you bought it for.

34:06They're going to value it for current market value. So if at the time of your death, the house is a million and the kid sells it for a million, they're not paying capital gains tax. But when you gift it to the child, they lose the step-up value. That means that if the property increases in value, then they sell it for a profit. They're going to get hit with like a 40% capital gains tax. So you're creating another issue for yourself. Now, there are more reasons of why you should not be gifting your home to your child. We need to take a quick break. But when we come back, I'm going to go over those reasons. You're listening to Love, Death, and Money on Talk Radio 790K ABC. Welcome back to Love, Death, and Money. I'm your host, Attorney Nas Barudy on Talk Radio 790K ABC. If you have a question about Trust's Will's probate call the station right now at 1-800-222-5222. That's 1-800-222-K ABC. To get more information about my practice, you can

35:08visit my website Barudylaw.com. That's B-A-R-O-U-T-I-law.com. We've been talking about the importance of end-of-life planning, 70% of Americans don't have a plan. If you don't have a plan, the state of California has one for you and it's called probate court, which is expensive, time consuming, everything becomes public record and your family will not have access to the assets until the proceeding is complete. The alternative is to create a end-of-life plan to make sure that your assets are in a trust to avoid probate. But there are many people that will try to avoid creating a trust for whatever reason. Maybe it's for financial reasons or they don't want to address these issues. They will give their largest asset, which is their home to their children, which is a big mistake. Like I said before, the break, there's loan lender issues, there's gift tax return issues, there is capital gains tax issues because your child will lose the step-up basis.

36:09Another issue when we're talking about taxes is property tax issues. Now, many years ago, we had something called Prop 13, which allowed parents to gift their home to their children as many properties as they wanted without the property tax being increased, meaning that if you had a property for 20, 30, 40 years and you decided to gift it to your kid while you were alive, the property tax would stay completely the same, even including commercial property. So this, however, changed when Prop 19 got voted in. Prop 19 got rid of that and it says, you're allowed to gift your primary residence to your child, but two conditions need to be met to keep the same property tax. One being that that child has to occupy the residence as their own. And number two, the property value, if it's more than a million dollars, it will get reassessed. So this has created a lot of issues for parents. A lot of people are unaware of it. And so

37:09what they'll do is they think that they're saving money by just gifting the home to the child while they're alive because they don't want to pay legal fees. But what ends up happening is the taxes get reassessed. When it gets reassessed, it's going to get reassessed for current market value. So again, if you've had a property for 40, 50 years, the property tax has only been increasing 2% per year, which is very minimal. But if the minute you transfer it to your child and they don't occupy the property as their primary residence and the property value is significantly more than a million, you're going to get hit with a huge property tax. And that can create issues for you. And saving a couple thousand dollars has now created a lifetime headache for you with the property tax. Another reason you should not be gifting your home to your child is issues with your child may come up, meaning you could fight with your child. And then they could be really nasty and sell the property. And if you think that your children are not capable of that, I would recommend

38:13looking up some cases of children who have killed their parents maybe or you know, they've gotten to physical altercations. Like children can snap, parents can snap, anybody can snap. So you don't want a situation where you're beholden to that child for your security. Second, your children can develop drug and alcohol problems and they may have gambling problems they may get involved with the wrong person. They may be going through a divorce. And these are all issues that can be very tricky to maneuver when now they have a big asset in their name. And furthermore, there could be creditor issues, meaning that if they get sued, now they have this property that's in their name and they can be at risk for a judgment, a claim, a creditor claim. And then you could lose your house. So the alternative of gifting your house does not make sense when you add up all these issues. So you should always just create a trust so that you're in control

39:14over the asset and that if something happens to you, then it transfers to your kid. Now, I want to talk very briefly. I don't have much time, but I want to talk about asset protection because I just mentioned it. If your child gets sued, then this home is open for creditor claim. It's important to have this conversation about lawsuits because every 30 seconds a lawsuit is filed in this country. And there are certain groups of individuals that need asset protection more than others. If you fall within this category, you should definitely give my office a call so we can create an asset protection plan for you. And by asset protection plan, I don't mean a revocable trust. A revocable trust does not protect you from lawsuits. It just helps you avoid so if you have paid off real estate, if you are landlord with tenants, if you have children under the age of 18 driving, you're a business owner or you're in a profession that's at a high risk for getting sued like a physician or you're in construction. Now, I want to very briefly talk about a case that was all over the news. I don't want to say the name, but you can probably google it

40:19and you'll see, but a 17 year old was in a sports car came from a very wealthy family. He's caught one night speeding down Olympic Boulevard. He runs a red light. He hits another car. The other car is occupied by a young woman who's a nurse who's coming home from a night at work dies on impact. Do you think that that person's family is going to file a lawsuit, a wrongful death lawsuit against a 17 year old or the 17 year old's kid parent, the 17 year old's parent? Well, the 17 year old is a minor. He doesn't really probably have anything in his name. So his parents are responsible. So what's going to happen is first they're going to go through insurance, the claim is going to be significantly higher than what insurance is going to provide. And if you add into the mix speeding recklessness, if there's drugs and alcohols, drugs and alcohol involved, there's going to be a bigger

41:22settlement that's going to be at play. So I'm not saying that this situation is right. I'm not saying that that person deserve to pass away, but I'm also an attorney and I have to protect my client. So if a situation like this arises for you, the first line of defense is having insurance, malpractice, umbrella, but there are policy limits. And if your insurance is not going to cover the whole claim, then you have to have a second line of defense, meaning that you should put your assets, your liquid assets in certain protected vehicles so that a creditor can't touch it. I'm talking about 401Ks or defined benefit plans. Many of you are holding a lot of cash just in regular checking and savings accounts. And those are all open for creditor claims. Third, you should have proper business entities. If you are a business owner, you should have proper corporations, limited liability companies. You should not be operating as a sole proprietor. Many people are walking around doing business as a sole proprietor. If something goes bad in the

42:25course of their work, they're going to be personally liable, meaning that their personal residents, their personal assets are all going to be jeopardized. And then finally, you should have something called an asset protection trust. Asset protection trust are not like revocable trust. You're basically shifting the asset out of your estate. You have to give up real control, but it's a big safety. You're going to use it as protection to guard against creditor claims. But many people are not aware that something like this exists, but we do it with a combination of having limited liability companies, different LLCs and other states. It's not a one-size-fits-all. I'd have to sit down with the client and go over what their needs are, what their assets are, and what they're trying to protect and come up with a specific plan. And just common mistakes to avoid if you're listening right now. Don't put too much wealth in your personal accounts. Do not personally guarantee everything and do not wait until a complaint is filed to start doing

43:30asset protection because timing is everything. If you're in the middle of a lawsuit, you can't call my office and expect me to wave my magic wand and protect you because at that point, anything I do could be considered a fraudulent transfer. So you want to make sure that you do an asset protection plan before a lawsuit is filed. So again, if you have paid off property, you're landlord and you have tenants, you have children under the age of 18 driving, you're a business owner, you're in a profession where you're at high risk for getting sued, definitely give my office a call so that we can create an asset protection plan for you. Again, the number to reach me, attorney Nas Barudi, is 424-465-9003. That's 424-465-9003. Or you can visit my website Barudilaw.com, B-A-R-O-U-T-I-law.com. In addition to creating end-of-life plans, we do asset protection, business planning, prenuptial postnuptial agreements, if you need help with probate, trust administration,

44:35trustee services, trust litigation. That's my area of expertise and that's what I focus my practice on. And again, for those of you that want life insurance or you want to review your old policies, you should definitely give Tina Barudi at new capital insurance solutions, a phone call. Her website again is newcapitalinsurance.com. And again, to reach me or to make an appointment, you can give my office a call directly at 424-465-9003-424-465-9003. And if you like to follow our business page at Barudilaw, B-A-R-O-U-T-I-law, you can go on Instagram, click the link in the bio. That will allow you to set up a complimentary 15-minute phone call directly with me so that we can go over whatever questions that you have and see if we're good fit for each other. And if our office can help you, again, my Instagram handle is at Barudilaw, B-A-R-O-U-T-I-law. And if you'd

45:41like to order a copy of my best-selling book, Love Death and Money, you can get it on Amazon.com. But if you'd like to call the office directly, the number is 424-465-9003. You're listening to Love Death and Money on Talk Radio 790-EK-ABC.