Integrating Estate Planning Into Your Financial Plan

Speaker 1 – 00:00
I think one of the biggest misconceptions that people have around their estate plan is I don’t need one because
when I die, everything’s going to my spouse anyways. And that’s just not true. If you die intestate, which is to say
without a will, it’s not automatically going to your spouse. If you have things that are not.
Speaker 2 – 00:18
Jointly owned, how often would you recommend a client review their estate plan?
Speaker 1 – 00:22
Good rule of thumb is life events, marriage, divorce, having a child, having a grandchild, losing a job, getting a new
job.
Speaker 2 – 00:29
I think that goes right into why you’re at ewa is we’re not offering estate planning as like I’m some random person
at a will. This is only for existing clients that do their full planning with us, their wealth management, financial
planning, taxes and how estate planning all in one wheelhouse. And so this can naturally get reviewed with our
setup.
Speaker 1 – 00:46
A lot of times attorneys don’t know what they don’t know. Right. So if they don’t know that you have these accounts
out there, they can’t help you plan for them.
Speaker 2 – 00:53
I found one of the biggest pain and why ewa exists is we constantly try to solve what are the stressors, what are
the time wasters. And I’ve been in over 10,000 meetings and we also serve about 400 households here. Never seen
it done right.
Speaker 1 – 01:05
Yeah, it gets clunky.
Speaker 2 – 01:06
It gets really clunky. And our dream was to bring everything in house to make sure everything can be done right.
Super excited to announce bringing Estate Planning in House, today’s episode. We’re going to introduce you to Kari
who is a attorney with over a decade of experience in both trust estate planning and the tax work backing up the
estate plans. This has always been a part of the long term vision of ewa is building a comprehensive model where
you can come in here as a one stop shop. So very excited to introduce you to Kari and make sure to tune to the
next episode as well. We’re going to talk specifics about how you engage with ewa overall and also specifically on
the estate planning side. Well, today’s episode, super excited to introduce everybody to Kari.
Speaker 2 – 01:49
Kari just joined our team as an estate planner. It has a very important experience both in estate planning,
document creation, the strategy behind them, and also doing the tax returns.
Speaker 1 – 02:01
Correct? Yes. Both sides of the coin, yeah.
Speaker 2 – 02:03
So the purpose of today’s conversation is just for our clients and listeners to get to know you and your background.
So welcome.
Speaker 1 – 02:08
Thank you. I’m excited to be here.
Speaker 2 – 02:10
Absolutely. Well, Kari, give us A quick background of know. Where did you grow up? College, law school, etc.
Speaker 1 – 02:17
Yeah, so I grew up in the south hills of Pittsburgh. More specifically, Scott, I went to Bishop Canavan for high
school in the Carnegie area, and then I went to Pitt for undergrad and also Pitt for law school.
Speaker 2 – 02:29
Right on. That’s awesome. And you are happily married?
Speaker 1 – 02:33
I am, yes.
Speaker 2 – 02:34
So family is. How many kids?
Speaker 1 – 02:37
Just one so far. He’s two. He’s a ball buster. But we’re having a good time with that. And then we have a dog, too.
Yeah.
Speaker 2 – 02:45
What kind of dog do you have?
Speaker 1 – 02:46
We have a black lab.
Speaker 2 – 02:46
Okay.
Speaker 1 – 02:47
Yeah, he’s a big boy.
Speaker 2 – 02:49
That’s awesome. After law school, I know you practice specifically in the wealth management industry. Yeah. Tell
us about your career so far. Before ewa.
Speaker 1 – 02:57
Before uwa. For the past decade, I’ve been working at a regional public accounting firm. I did a lot of trust work,
estate work, private foundation work, 1040 work, and gifting. So a lot of that private client service, you know, where
a client can just come in, work with one person and knock out everything they need to do, which was really
rewarding and also really nice to see all sides of it. So there weren’t really many surprises. We were able to plan for
stuff, which was great, and I was able to learn so much.
Speaker 2 – 03:28
That’s awesome. So I remember during the interview process, there’s some staggering amount of. Because
basically half of your time you mentioned was doing the estate planning. The strategy, but also the document.
Speaker 1 – 03:38
Yes.
Speaker 2 – 03:38
The creation and then signed to the finish line. And then also the tax side of things. So what was the amount of tax
returns that you did during the tax season?
Speaker 1 – 03:47
I think I did about 300 personally. So I think I did about 200 trust returns a year and maybe another 100 gift tax
returns. And then I guess on top of that, I also did about 30 private foundation returns and maybe another 30
individual returns. So maybe closer to 400 actually so far.
Speaker 2 – 04:08
So over a decade of experience post law school as an attorney, what made you want to go into specifically estate
planning?
Speaker 1 – 04:15
When I went to law school, I went with the intention of being an environmental lawyer. That obviously is not where I
am today. And I give a lot of credit to that to my tax professor in law school. He was a fantastic teacher professor
in Fante. He was great. And he made me want to take all of his classes. So I just started taking class after class of
his. I ended up needing to take like one extra class, I think, for to be able to get a tax certificate. In addition to my
law degree, I think by way of an estate and trust class, actually. And then I ended up interviewing with on campus
interviews with the firm I was at prior to this, which was heavily into the estate and trust space.
Speaker 1 – 04:58
So that’s kind of how I ended up not where I intended to be, but loving it.
Speaker 2 – 05:02
You have any regrets? Do you still have a secret itch of like wanting to be environmental?
Speaker 1 – 05:06
I mean, there’s always, you know, you want to do what’s. What’s best for our world, for the next generation. So I try
and do that personally.
Speaker 2 – 05:14
But no, I’m happy you are helping do what’s best. Because the estate plan, that’s literally what you’re doing.
Speaker 1 – 05:20
Exactly. Yeah.
Speaker 2 – 05:21
Passing on wealth from generation to generation.
Speaker 1 – 05:23
Right. Helping the families instead of the actual living space, I guess. Instead.
Speaker 2 – 05:28
Tell us a little bit more about when you go into doing estate plan. What are the biggest surprises that you think? If
so from a client perspective, what are some of the biggest surprises that you see that they need to prepare for?
Questions that you ask that trip people up?
Speaker 1 – 05:44
I think one of the biggest misconceptions that people have around their estate plan is I don’t need one because
when I die, everything’s going to my spouse anyways. And that’s just not true in I would say the majority of the
states. It’s definitely over 50%. I don’t know what the actual number is. If you die intestate, which is to say without a
will, it’s not automatically going to your spouse if you have things that are not jointly owned. So if you even have a
bank account that is just in your name and you are married and you pass away, that will not go to your spouse a
hundred percent. Not only that, it will go through the probate, port. Probate court, but in addition to that, in
Pennsylvania specifically, for example, if you die without a will, and let’s say.
Speaker 1 – 06:34
Let’s say my husband passes away and he had a bank account from before were married, not that much money in
it, let’s say no big deal, but it’s just titled in his name, then that is going to be split between me and our children. So
I’ll get 50% of that. Well, I would get the initial 30 grand. So let’s say it’s a hundred grand in that account. I would get
30 grand off the top, but then also have to split the remainder with my children. So one of the stories that sticks
out to me the most, this was really early on in my career and it wasn’t a client of mine, but their children were
telling us this story or the daughter was telling us this story.
Speaker 1 – 07:15
She wanted to get her stuff done because when her parents got married, I believe it was the grandparents of the
dad had left him and inherited amount of money. And it was before they got married. So he had it in just an
account with his name and it was a couple hundred thousand dollars. And they had said, oh this is great, let’s try
not touch that. Let’s just leave it where it is and let that grow. For retirement, they never set up an estate plan. And
so another issue with that is inheritances. This happened before they got married, but had it not, had it happened
after? And he still put it in the solo account. Inheritances are not marital property. If you get an inheritance, it’s
outside of the purview unless you take active steps to commingle the assets.
Speaker 1 – 08:05
So she was thinking this was her retirement fund. She didn’t work. She raised her kids. She wasn’t creating income
for herself. Her husband passed away. No will. Normally if you’re in a good family relationship, probably not a big
deal. The kids will disclaim the money. It goes back to mom anyways. In this situation specifically, the son had
some substance abuse problems. He was estranged from the family. So he got one fourth of this account that she
had been banking on for her retirement. She, she was never making income. It was a. By that point it had been 20
years, they hadn’t touched it. A couple hundred thousand dollars had been sitting there from the beginning was a
large sum of money that she had anticipated. They both had.
Speaker 1 – 08:47
Her and her husband had anticipated using this money for their retirement and now one fourth of it was wiped out
to the son who they don’t talk to, maybe, probably shouldn’t. I think at the time the substance abuse problems had,
were okay. But always there’s always the trigger of. Yeah. Of not wanting to get that to someone who could hurt
themselves by having that access to that amount of money. Yeah. So that always sticks to me as like a. You know,
I’ve seen knockdown drag out fights with families who are arguing over money, but that one really like, I think tugs
at your heartstrings because nobody was really in a great spot at the end of the day.
Speaker 2 – 09:32
Yeah. It builds the conviction of not only having the documents in place, but marriages, children, blended families,
inheritances, the stuff needs to be reviewed.
Speaker 1 – 09:42
Yes, absolutely.
Speaker 2 – 09:43
How often would you recommend a client review their estate plan? Is it like every year, Every five years when a
Major life event. Like how do you guide your clients of like, hey, let’s review this. When fill in the blank happens, is it
a timeframe or an event?
Speaker 1 – 09:58
So in a perfect world, you’re looking at it once a year. Right. Is that realistic for most people? Not a lot. Most people
aren’t looking at this every year. A rule, good rule of thumb is life events. Marriage, divorce, having a child, having a
grandchild, relationship, losing a job, getting a new job. Those things are great triggering events to look at what you
have going on. If none of that’s happening, you’re kind of just static. It’s still good to check in every two to three
years minimum with your planner or your attorney and just say like, hey, what’s the update with what’s going on in
the legal world on this? Because by year four, anytime there’s a transition of power in the government. So every
presidential election is a great time to look at things. What’s going on? What could be going on?
Speaker 1 – 10:45
Because you know, you make these laws but they’re ever changing based on who is really in charge at that point.
It’s kind of a hard question to answer.
Speaker 2 – 10:55
Right.
Speaker 1 – 10:55
There’s really no right or wrong. But as long as you’re staying on top of it, staying consistent, not, I would say at the
absolute worst, you need to be looking at this every three to five years.
Speaker 2 – 11:06
Well, I’m so glad you said that, Kari, because I think that goes right into, you know, why you’re at ewa is we’re not
offering estate planning as like, oh, I need, I’m some random person to do. Well, this is only for existing clients that
do their full planning with us. You know, tack their wealth management, financial planning, taxes and LSD planning
all in one wheelhouse. And so this can naturally get reviewed with our setup. Yeah. And you know, oh, I’m going to
call. I’ll admit some of the attorneys I work, it’s like last resort because then, you know, $600 an hour, whatever the
hour rate is like, oh, do I really need that question answer.
Speaker 1 – 11:41
Can I figure this out myself first?
Speaker 2 – 11:43
Yeah. Now we’re including this part of our package so there’s no time tracking and no am I going to get billed for
this? So this can just be a natural rhythm of hey, we’re doing our annual or six month review. Let’s make sure we tie
everything we talk about what needs updated based upon the life events or life changes calibrations in the estate
plan.
Speaker 1 – 12:04
Yeah, it’s very organic. And you can just be having conversations with someone across the hall from you and
something can perk your ears up and say, hey, we should look into that.
Speaker 2 – 12:15
No question. What’s the process if someone has a, a will, a trust they think is flowing out there, they’re now
remarried, have a blended family, they haven’t looked at this stuff in a long time. What are the next steps? Like if
they think, well, I work with that attorney. How does the process work to review old files or old documents or. And
the same question, can you just create new documents and forget those other ones ever existed? Or what does
the process look like for someone that already has some stuff in place that wants to review this?
Speaker 1 – 12:45
Sure. So, I mean, that is the age old adage every lawyer is going to say of it depends. It, it’s going to be different for
everybody. But step one, we want to see those documents. If you have access to them, they’re available. We’re
going to want to see what you already have in place. That’s the most important because some of those documents
are easily changeable and some of them are not. If you have set up an irrevocable trust at some point, that’s going
to be a bigger burden than if you just have a will. We need to update, you know, a will. You just update, create a new
one that’s going to bypass the old one. Whatever is the most updated one is the one that the courts are going to be
looking for.
Speaker 2 – 13:23
So if you have a will, five, a will on January 1st of 2025, then another will on January 1st of 2026, even if the 2026
one doesn’t mention the 20, since that’s a newer.
Speaker 1 – 13:31
Date, that’s what they’re going to go by. Yep.
Speaker 2 – 13:33
Trump’s absolutely. That one takes effect, right? No matter what.
Speaker 1 – 13:37
Yes.
Speaker 2 – 13:37
Okay. I didn’t know that.
Speaker 1 – 13:39
As long as it’s signed and, you know, taken care of, but yeah, okay. Generally speaking, that’s how it’s going to work.
Speaker 2 – 13:46
Okay. And then I’ve always, the horror story I have is a client years ago, the wife was my client. She gotten
remarried to this other doctor. The, the other doctor had been previously married. So they had a blended family.
Speaker 1 – 13:59
Okay.
Speaker 2 – 14:00
And he had an old 401K and unfortunately passed. And I, at that point, this is years ago, were just working with the
wife. They’re like, they handle their money separately, but, you know, they thought they had stuff where it was
going. He had this old 401k so they redid their wills with, you know, he did it with his attorney, she did it with her
attorney. And he’s like, okay, everything’s going to you. Everything’s going to. So I think they exited those meetings
thinking like their wills and the revocable trust were good to go. Well, he had an old 401k that had his ex wife still
as the direct beneficiary. And so that was over seven figures. And during this grieving time, she found out that she
had no rights to that.
Speaker 1 – 14:40
Million dollar beneficiary designations are going to take precedent over the will. So if you want to be making sure
you’re updating those at all times, anytime you’re revisiting your estate plan, like we said earlier, should be
minimum if you can, every three years. But hopefully every year, every two years, you’re looking at that. At that
same time, you should be looking at all your beneficiary designations on all of your accounts.
Speaker 2 – 15:06
So direct beneficiaries always take precedent. Your will could say, I want everything to go to my new life. If you
have the ex wife as the direct beneficiary on 90% of your assets, ex wife’s getting 90% of those assets.
Speaker 1 – 15:18
Right. Because a great thing about beneficiary designations is that doesn’t have to go through probate. Right.
That’s just going right out if you have a will that’s going through the probate process. So that’s already gone by the
time you’re getting through that.
Speaker 2 – 15:30
Yeah. Interesting. I think that’s a huge. There’s a lot of misconceptions out there with people think they go meet
this fancy attorney in a suit and go downtown and pay $30 for parking and then they exit thinking, oh, we’re good.
Now what I’ve witnessed is those documents get done, they get the fancy draft and then nothing gets executed
after. Because the attorneys that, historically we’ve seen some of their work, they’re great documents. It’s just the
follow through, isn’t there?
Speaker 1 – 15:56
Yeah.
Speaker 2 – 15:56
And so they don’t go through and say, hey, retitle these accounts into the revocable trust, change this beneficiary to
this. Or maybe they give and the clients are just overwhelmed thinking it’s taken care of, but it’s really not. And this
has happened like 90% of the time they go through, they get irrevocable trust and then literally nothing gets done.
So those are meaningless documents until they update the accounts, change the titling, change the beneficiary
designations, set up a Bank account to fund the ist.
Speaker 1 – 16:21
Yes. And I think another point that needs to be made and that’s great about coming here, is that a lot of times
attorneys don’t know what they don’t know. Right. So if they don’t know that you have these accounts out there,
they can’t help you plan for them. Whereas if everything’s here, your investments are here, we’re managing
everything, we know exactly what you have at all times. So we’re not going to miss something.
Speaker 2 – 16:43
I found one of the biggest pain and why ewa exists, we constantly try to solve, you know, what are the stressors,
what are the time wasters and the coordination, if you have a high net worth client of having irrevocable trust and
revocable trust, just getting all of the documents in order and reviewed and then the obviously irrevocable trust,
most of the time they need their own tax return.
Speaker 1 – 17:03
Yep.
Speaker 2 – 17:04
They needs to be gift tax returns if they’re gifting. And so I’m going to go on to them. And you know, I’ve been in
over 10,000 meetings and we also serve about 400 households here. I, I’ve never seen that done. I’ve always, when
there’s a irrevocable trust and there’s a separate tax professional, a separate financial advisor, I found we’re always
the ones quarterbacking, correcting and noticing. I’ve never seen it done. Right.
Speaker 1 – 17:27
Yeah, it gets clunky.
Speaker 2 – 17:28
It gets really clunky. And so that’s, you know, our dream was to bring everything in house to make sure everything
can be done. Right.
Speaker 1 – 17:34
Right.
Speaker 2 – 17:34
In clients, assuming that their CPA before we brought taxes in, we’re filing the tax return because we send them
this detailed list of like, hey, here’s what happened. Yeah, they don’t file the trust tax return because maybe that
CPA is not familiar that a trust needs a tax return. They’re just doing business returns in 1040s.
Speaker 1 – 17:53
That is a great point. That’s kind of how I ended up getting into the private foundation space, actually, because I
was servicing a lot of high net worth clients. I was doing their 1040, their 1041, their trust return, their gift tax
return, and then they were having to work with someone else for a private foundation. And I thought, well, I could
do that, I can learn that. So that way I was able to house a ton of clients just myself, which I think is great client
service when you’re not having to email six different people on April 15th to get all your tax returns. Done.
Speaker 2 – 18:24
What would people be the most surprised about you outside of the office? What are some hobbies or interests that
you have?
Speaker 1 – 18:32
Oh man, that stuff right now I just love, I love being a mom. I love hanging out with my son and my husband. But I
do love reading. I read constantly. I will read anything. I will read fantasy, I will read history. I will. I love fiction. I love
non fiction. I’ll read pretty much any book you’ve put in front of me. I’ll at least give it a try.
Speaker 2 – 18:55
What’s your favorite book that you’ve read in the last three years?
Speaker 1 – 18:58
Last three years. One of my favorite books, it’s called House of Leaves. It’s by Mark Danielewski. It is. So I don’t
even know how to describe this book. I think about it all the time. It was slightly disturbing. It’s a slog to get
through. There’s tons of footnotes. There’s two, three different stories going on throughout the book at all times.
So it’s definitely an undertaking. But I felt great when I finished it. I loved looking back on it. It’s so spooky almost
and creepy. But it just like if you have the chance to read it and have the time to read it and get through it’s
excellent.
Speaker 2 – 19:39
That’s awesome. Well, Kari, thanks so much for joining us. We’re super excited to have you here.
Speaker 1 – 19:42
Yeah, I’m excited to be here.
Speaker 2 – 19:44
You’ve been here less than a week and clients already raving, the ones that you’ve met and excited that we brought
this in house. Join us for the next episode if you want to hear more about the specifics of how we’re going to
engage with our current clients. And also if you’re a new client, considering us with how this estate planning works
with the tax and the wealth management, putting everything together.
Speaker 1 – 20:01
Yeah, it’d be great.