Episode Transcript
[00:00:00] Speaker A: This podcast is brought to you by MHA of Dutchess county and produced by CMJW Entertainment.
This episode of the Vital Women Podcast is proudly sponsored by Salt Boutique Labs.
You're listening to the Vital Women Podcast.
[00:00:16] Speaker B: All right, welcome back to the Vital Women Podcast. I am your host, Yvette o'. Sullivan. We are currently celebrating Women History Month, a time dedicated to honoring the pioneers who fought for women's autonomy, property rights and financial independence. But while we look back at history, today's conversation is about looking forward and securing the legacies we are building right now.
Joining us is someone who helps women to do exactly that. Lisette Muniz is the founder of Law office of Lisette Muniz llc. With offices both in the heart of Manhattan and the Hudson Valley. Lisette is a powerhouse attorney who understands the unique challenges facing women in New York today. For the few fast paced life of the five boroughs to growing the communities upstate. He specializes in helping families navigate life most critical transitions, specifically through the lenses of estate planning. Lisette is an honor to have you here today. Welcome to the show.
[00:01:15] Speaker C: Thank you for having me. But I'm so happy to be here with you today.
[00:01:19] Speaker B: Thank you. I am so happy that you agree because for women it's very confusing to make a decision whether to have a will or a trust. And that's what we're going to discuss today. And as I stated, many women fought for the rights for us to be able to have this honor today, to make such decisions. Yeah.
So I'm going to start with the first question, which is women fought so hard to be where we are today.
So when it comes to deciding to have a will or a trust, can you walk us through the difference?
[00:01:56] Speaker C: So a will is basically instructions.
A trust is a plan in action. Right. A will still needs to be probated, which means you still have to go to the court and prove the will. A will is public. A will could be challenged. A trust is private. You don't have to go through the courts. And if you properly fund it, everything is already set in motion. Now when you, when you sign your will and you fund it, pro sign your trust and you fund it properly.
[00:02:23] Speaker B: Thank you for that clarification. And I see it as having this opportunity to leave a love letter to, to your loved ones, to your family members, to have everything in order.
When my father passed away about 12 years ago, he always said to us, oh, I have all the paperwork organized. He was an accountant. I have a will. He passed away, we couldn't Find the will. We looked everywhere, and my sisters and I, we were always in agreement how we were going to divide property and things like that. But we were caught up in the courts with the prorate, and it almost took about two years to settle everything. And it was a nightmare putting in all that time.
[00:03:05] Speaker C: Yeah, it is. And I'm so sorry to hear that, because it sounds like he had such good intentions. Right. He thought he had everything in order, and maybe he was advised and counseled that as long as you have a will, he, you're fine.
But especially in this day and age, post Covid, the courts are very delayed. They never really caught up after Covid. They're not hiring more staff to make things move faster. And so in this day and age, you kind of have to have a trust if you want any efficiency with regard to your estate planning. You can't rely on the court's timeframes. And also there's a lot of money that can be saved if you do things, if you do have a trust and don't have to probate a will.
So another thing you mentioned was about how you weren't able to find it. Right. And that breaks my heart, because now in this day and age, it's different. Back then, everything was in paper, and we still have everything in paper. Right. And my grandfather had the little, you know, mareta in. In the closet where he had all the important papers, the birth certificate, Social Security card, the bank statements, you know, the little coins that he had collected. Right.
But in this day and age, with. With technology, we have the benefit of being able to have these documents, not only the paper copies, the hard copies, but we have them in electronic format. And so what I do for my clients is I give them the hard copy format in a binder, but then I also give them a USB key, and I also place them in a vault. And what placing them in a vault does is that if they're traveling outside of the country and they become incapacitated or pass away, or if they have family members or important people that they name in their plan who they need to access the documents, they can give them access to those documents from wherever they are.
So it really provides an added security that everybody kind of knows what's going on and where to find the documents.
[00:04:51] Speaker B: Thank you for that clarification. Now, most women are the caretakers in their families. They're taking care of their children, they're taking care of their parents, and they're caught up in that sandwich generation of having so much pressure and responsibility on them.
And a lot of the times they don't think of making an appointment and coming up with having a trust or a will. What would you suggest to them? What makes it easier for them to reach out to a lawyer as yourself?
[00:05:21] Speaker C: Yeah, it's an excellent question. And it really has to do with the mental load. It has to do with self care.
It has to do with, I guess, cultural and societal pressures for women to kind of take care of everything and everyone.
And we often do so at our own expense.
And so I liken the scheduling an appointment for an estate plan. I kind of liken it to scheduling your appointment for your mammogram.
You know, it's like something you need to do. You can check it off your to do list. And it's also something that if you don't do, could lead to a lot of trouble.
You know, my grandmother always used to say, todo con tiempo tie enejremedio. Right? Everything has a solution as long as you have time to find the solution. Right? So delaying the planning can really complicate things down the road. People can get diagnosed with mental health conditions that prevent them from being able to sign the necessary documents. We have competency issues.
And so what I'll say is, any plan is better than no plan, right? So whereas we talked a little earlier about how a trust is kind of like the best vehicle to expedite and make everything flow as easily and as least complicated and less expensive as possible.
If that's not something you can do, even if you just get your basic documents, you get your will, you get your health care proxy, you get your power of attorney, you name your guardians for your children so that the state is not doing that for you.
That can provide incredible peace of mind. You can start with a basic plan and then you can build on it. You know, it doesn't. You don't have to. Rome wasn't built in a day. You don't have to do everything at once. You just get those basic documents in place. And then when you can breathe and you feel able to, you can build on it.
[00:07:10] Speaker B: What do you say to the woman that thinks, well, I don't have anything to put in a will or to design a trust?
[00:07:19] Speaker C: Okay, that's a. That's a really great question. And I get asked that question a lot. And so what I'll say is, an estate plan, we have the wills and we have the trust, but those are just part of an estate plan.
An estate plan is also includes documents that protect you when you're still alive, such as the health care proxy, the power of attorney. If you're a woman, you can have no money, but you have children. You still have to decide who is going to take care of your children in the event that you cannot.
And so our, our estate plans are comprehensive. It's not just a will, it's not just a trust. You need to plan for incapacity. You need to plan for somebody to be able to make financial decisions if you're unable to. You need to plan for somebody to make medical decisions for you if you're unable to.
It's not just for the wealthy. If you have any, if you have people in your life who you value, you need an estate plan.
[00:08:09] Speaker B: Let's come up with a hypothesis. Okay, so here I am, and I'm thinking, well, I don't have anything to leave to my children.
And I know you mentioned it's also important because you're protecting your children. You're deciding who you're going to assign as a guardian for your children. But what else can I put in to that trust besides leaving my children with, with a guardian? Just because I know my audience are going to think, well, that's, that's fine, I'm protecting my children, but I really don't have any money. So what else goes into a trust?
[00:08:45] Speaker C: Well, into an estate plan specifically. Like I said earlier, it's not just, even if you don't have minor children, you protecting yourself. Right? Because I have plenty of clients who are single, no children.
They often have a very challenging time creating their estate plans because they still need people to, they have to decide who gets what they have. Whether it could be something modest, it could just be my jewelry, you know, my furniture. They still have to decide.
A car. Right. They still have to decide who gets that. But more importantly, they have to decide who will be in charge of taking care of their affairs if they become incapacitated. Right. So my single, no kids clients often have to. They'll go like during a, a holiday break or, you know, a Thanksgiving dinner, and they will talk to their relatives and say, hey, if anything ever happened to me, would you be willing to handle my finances for me? Would you be willing to be my power of attorney if anything happened to me? Would you be willing to be my healthcare proxy and honor my advanced healthcare directives? And it's challenging for them because when you have kids, you know, they kind of become the default for things. They become your default beneficiaries. They become your. And if they're adult children, they can become the default poas and healthcare proxies. But when you don't have that default, you have to think carefully about who's responsible enough to do these things for me, who's willing to do these things for me. Right. And then you have to kind of get there, you have to kind of get their consent and their buy in into serving in this capacity for you. If you do not, then the courts have to step in and they're going to make the decisions for you and they may not be what you want.
[00:10:26] Speaker B: Is there a difference between coming up with an estate planning here, upstate New York compared to New York City City?
[00:10:34] Speaker C: Yeah, for sure.
So for my downstate clients in New York City, a common, a common issue that we come across are co ops. That's a very unique real estate item to New York City. And it's not technically real property.
You have shares, right, in a corporation and so you have to get permission from your co op board in order to transfer those shares into your trust. Right. So that is, that's a unique thing for downstate. The other unique thing for downstate is that the property values are astronomical. Right. So if you're living in one of the five boroughs and you, you own real estate, you are very likely in a, in a situation where probate would be triggered because the value is just so high. So if you want to try to avoid probate, you absolutely, and you own property in the city, you absolutely need an estate plan.
Upstate, it's a different situation because upstate we also have a lot of agricultural land that you have to, that you might want to put in your estate. You might have multi generational agricultural land that you want to put in your estate plan.
There may be emotional considerations, family businesses tied to the land.
And so that's one consideration. Also upstate you're more likely to have more than one property just because they're more affordable or you've inherited them from other family.
And so that's another consideration because you want to make sure that you're protecting and creating plans for each of the properties based on how you want them to be distributed.
[00:12:07] Speaker B: Thank you. Let's talk a little bit about designing a health care proxy. What steps do we need to take to form?
[00:12:15] Speaker C: Yeah, health care proxy is one of my favorite things to talk about because so for example, I'm just going to, I'm going to use the example of having a spouse, right. And so a lot of people will default to their spouse as their health care proxy. The person making this, making decisions for them in the event that they can't make decisions for themselves specifically about health care.
In many events, in many cases, you can choose your spouse. But I always like to have my clients think about who would be most likely to honor your wishes if you were incapacitated. Imagine yourself laying in a bed on a ventilator, and who's going to make the decision to take you off the vent.
[00:12:54] Speaker B: Right.
[00:12:55] Speaker C: And so where some people might think, oh, yeah, definitely my spouse. Like, is your spouse going to want to. To keep you here longer than you want to be here? Right, right. Same thing for I use a spouse. It could be your child. Your child could be so emotionally attached to you and that they wouldn't be a good option to the health care proxy. Yeah.
[00:13:14] Speaker B: That you see it that way, because my health care proxy is my daughter. But I want to hear more about this.
[00:13:22] Speaker C: Yeah, well, I mean, you want to think about who would be willing to make those tough decisions. Right. Because you can become emotionally attached. You don't want to let this person go.
And so when you're choosing your healthcare proxy, you need to find somebody who is going to really honor your wishes and not get attached and, you know, and try to go against your wishes. So it's more about choosing the healthcare proxy. Once you choose them, you know, it is what it is, but you want to really think about who you're choosing and. And maybe not even putting somebody who you know is going to have a really hard time making that decision in that position. Right. Kind of taking that ownership away from them and so they don't have to feel guilty.
[00:14:03] Speaker B: Well, the way I design my proxy is I already have my wishes labeled to make it easy for my daughter. Can someone do the same?
[00:14:14] Speaker C: Yeah, yeah. What you're referring to. So there's a health care proxy. A health care proxy designates who can make decisions for you. What you're describing is an advanced health care directive.
We also include those in all of our estate plans. Advanced healthcare directives go into more detail about what type of extreme measures you want taken, whether you want to be an organ donor.
We even include in our documentation what type of funeral and. Or burial and. Or cremation arrangements you would like. So you can be very specific in your estate plan to kind of take a lot of those decisions away from the person so you don't have to place that on them if you don't think they're capable. Capable of making them. Or you can leave it up to them. You can say it'll be their choice based on their judgment as to what they think will be best. You know, that's why it's your estate plan, your will, your trust. You get to decide how rigid or how flexible it's going to be.
[00:15:10] Speaker B: Thank you. Thank you. Are there other steps that women need to take to ensure that everything is in order in case they pass besides the trust and having a health care proxy?
[00:15:22] Speaker C: Yeah. Well, the one thing I think about with women, I tend to think about minor children. And I think about it because who you would want to raise your kids when they're infants and toddlers may not be who you would want to raise your kids when they're older. Right.
So I think about the importance of reevaluating your trust and revisiting your trust periodically or your estate plan periodically, because it could just be in a will if you don't have a trust, but really rethinking who you're leaving your kids with. Do they share the same parenting philosophy?
Think about your family dynamics. Think about your values. Right. And those can shift over time. Right. It's easier to move a small child out of its environment than it would be an adolescent who's, like, tied to the community and has friends and sports and whatever. Right, Right.
So that's definitely one thing I think about when it comes to women. I also think about women in terms of being female business owners creating succession plans for their businesses.
And I think about it in terms. I know I'm talking about women specifically, but I'm going to give you the example of the bodeguero, because that's kind of like the. The person that I envision needing my help when it comes to succession planning. Right. So in the city, you have a bodega on every corner and you have your local bodeguero. And typically, it's somebody who came from another country and they're living the American dre. They started a business, their whole family works there, they bought a house, they're sending their kids to private school, and everything looks good. But what happens when that bodega gets sick or dies? What happens to that bodega? What happens to everything that they've built in this country?
[00:17:01] Speaker B: Right.
[00:17:01] Speaker C: If they don't have a succession plan and they don't have an estate plan.
So I think about going back to the woman example. I think about thinking carefully about your guardians and revisiting that periodically and thinking about your succession plan. If you own a business, what will happen to your business if you can't run it tomorrow?
[00:17:18] Speaker B: That's a good point. Thank you. Thank you for that.
We're Coming to a closing to our show. Is there anything else that you want to advise women?
Being that we have a voice today and we can make choices for ourselves, we don't have to depend on our spouse or anyone else to make those choices. What can you leave them with some sort of empowerment for them to take control of their decisions?
[00:17:44] Speaker C: Yeah. So I think the first thing that I would say is making a conscious decision to make this a priority.
I would say you could take, if you wanted, like baby steps, like direct actions that you can take to help benefit you and move you in the direction of creating an estate plan is, I would say start collecting. Start getting organized and collecting all of your important documents in one place. Right. Like how we mentioned how our, your dad and my grandfather had the suitcase with all the important papers. If you don't already have that together, do that, because that in and of itself will make you feel better.
Review your accounts. This is something you can do even before you create your estate plan. Review your accounts and review your beneficiary designations.
Okay.
Because beneficiary designations matter, and especially if you don't have an estate plan, but they matter. And so. And they can change. So when, when I was doing. I've had several iterations of my estate plan throughout the years, and when I was creating one of them, I remember looking at a life insurance policy that I had purchased, I don't know, 15 years earlier, before my daughter was even born.
And we had listed, at that time, we didn't have children, so we had listed my in laws as the beneficiaries and we had never looked at it again. Right. And now, you know, I have a daughter and my in laws are elderly, and if they inherited, you know, if they got that, that, that life insurance policy, that might have affected their ability to, to qualify for certain benefits, you know, so it's. What I'll say is check your beneficiary designations. These are two things you can do even before you consult with an estate planning attorney. Get all your important documents together and review all your beneficiary designations.
[00:19:25] Speaker B: Thank you. That brings up the question, after forming a trust, how often should we revise the trust? Yeah.
[00:19:32] Speaker C: So at our firm, we include a free review of your estate plan every three years.
And we will provide fresh documents, certain documents. So the POA and the HEALTHCARE proxy will provide fresh copies if you need them at no additional charge.
And then if you need something major, then we will quote you on what it would cost to do that. So major would be like, you need to, like, Do a restatement of your trust, or you want to. Do you want to add a trust, an added layer of protection, or you want to change your trust from irrevocable to from revocable to irrevocable. Right.
[00:20:06] Speaker B: So can you explain that phrase? I know that's very confusing to some people are. I'm sorry to interrupt you. Yeah. What does that mean?
[00:20:13] Speaker C: Revocable versus irrevocable?
[00:20:15] Speaker B: Yes. Yeah, sure.
[00:20:15] Speaker C: No problem. So a revocable trust, I want you to think of a trust as a box, right? And so the box is where you're going to contain your assets, right? And you're either going to put your assets into the box or you're going to name the box as the beneficiary of your asset. Okay?
And with revocable trusts, what it does is it avoids probate, but it does not if it's. If it's properly funded because you also have to fund it. Okay? It avoids probate, but it does not protect you from creditors, divorce lawsuits, okay, Bankruptcies. It does not protect you. So no asset protection because it's tied to your own Social Security number. It's like you own it and it doesn't provide you any protection. It just avoids probate.
Now, irrevocable trust is also a box, but once the box is its own entity, it has its own ein number.
And so it doesn't technically belong to you, whatever assets you put in the box or that you designate the box as a beneficiary of those assets, it doesn't technically belong to you anymore. You name a trustee who's going to manage all of that on your behalf and for your benefit, but you lose some access to what's in the box. You can hire and fire your trustee. So if you don't, if you hire a trustee that's not doing what you want them to do, you can fire them and get another one. So you can. You can still have some control, but the lack of control is what helps you get the benefit of the asset protection, the. The protection from creditors, from bankruptcies, and from divorce, because it's technically not yours.
We deal with this a lot also, since you asked about it, we deal with it a lot with Medicaid Asset Protection Trusts. That's a form of an irrevocable trust where you put your assets in this irrevocable trust that is technically not yours anymore, but you can still benefit from it. And you name a trustee to do what you want them to do with what's in the trust. Right?
But it's technically not yours. And then once you do that, you start a five year look back period for Medicaid. And so if you end up in a nursing home and your assets have been in the trust for at least five years, Medicaid cannot put a lien against your assets because it was outside of your name and in the irrevocable trust for at least five years before you needed nursing home care.
[00:22:36] Speaker B: Thank you. Thank you. Is there something that you would like to add that perhaps I haven't asked.
[00:22:43] Speaker C: What would I like to add?
I think I told you everything that I would tell my clients.
Review your trust every three years. Start small, don't. Yeah, that's what I would say. I would say this.
Perfection is the enemy of good.
We find people who overthink it.
I have clients who want to read the entire trust before they sign it. Right.
[00:23:08] Speaker B: And it's a lot to read.
[00:23:09] Speaker C: Right?
[00:23:09] Speaker B: Right.
[00:23:10] Speaker C: And what it does is it delays the process. And God forbid something happens to you during that time, you don't have the protection. Right.
You hire a lawyer because you want them to provide you with counsel on what the best plan is for you based on your asset inventory and your fears and your goals and your needs. Right.
And so what I would say is talk to a lawyer, get the basic plan, basic documents in place, and don't worry about it being perfect from the beginning. I have one client that I'm thinking about specifically. I've been talking to her for definitely been like at least five months. And she wants all the protections and she wants like the highest level estate plan, but she can't afford that right now. Right. And so I keep trying to get her to just, just do the basic because at least get, she has a house, like, get that house and the trust so that your two girls, you know, don't have to go to, don't have to go to court.
Let's just do a small trust. And we tend to overthink things and be perfectionists and want everything to be done just right.
And what I will advise against is don't do that here. Get those basic documents in place. You will feel relief and you can upgrade as you go, you know. And there are also, I guess another thing I'll add is if this is something that's urgent for you, you can also get financing for this. Right. And so there are, there are, through our firm, we offer something called affirm, where if you want to do an estate plan, and especially if it's something that's very time sensitive, let's say somebody has a chronic illness and they want to make sure they get an estate plan right away, but they can't afford to do it. They can take out a loan through a firm and get their estate plan done and it's just a relief. And it doesn't have to be the ideal estate plan. Like I said, just start small and you can build on it.
[00:25:03] Speaker B: What a great suggestion to take out a loan to secure your estate. I did not know that some firms offer that option. Thank you. And what better way to celebrate Women History Month? By securing your history and giving that gift to yourself.
Leaving your family with a will or a trust, whichever one the listeners choose to go.
So Lisette, thank you so much for your time and for clarifying the difference between a will and a trust. And I hope my listeners find this information useful. And if they like it, please subscribe to the Vital Women.
We're here for you. Thank you.
[00:25:41] Speaker C: Thank you, Yvette. It was nice speaking with you today.
[00:25:44] Speaker B: Likewise. Take care.
[00:25:45] Speaker C: Have a great day.
[00:25:46] Speaker A: This podcast is brought to you by MHA of Dutchess county and produced by CMJW Entertainment. This episode of the Vital Women Podcast is proudly sponsored by Salt Boutique Labs.
