Episode Transcript
[00:00:10] Speaker A: Hey guys. Welcome to the Senior Care Conversation. I am your host, Hilary Bailey. This is the space where we talk real solutions for aging with dignity, clarity and confidence. From health care to housing to financial security, we bring in the experts who help you prepare plans, plan and protect what matters most. I am super excited about our guest today. It is Joe Reyes, a seasoned CPA and founder of JL Reyes Accounting and Tax CPAs. With over 15 years leading his own firm and decades in the financial world, Joe helps families take control of their future. He holds degrees from Pace and Drexel, plus a master's in theology. And he brings a thoughtful, proactive approach to planning that blends numbers with real life needs.
Joe, welcome to the Senior Care Conversation. We are so happy to have you. So I'm going to just jump in, I'm going to jump in with you. We want, this is a very important question. So why do so many people underestimate the cost of care and how can they plan ahead?
[00:01:15] Speaker B: Yeah. So medical care, huh?
You don't know what you don't know, Right. So a lot of people, you know, as they age, they start to think about, you know, I need to make sure that I have enough of my co pays and I have enough to pay for prescriptions and whatnot. And you know, they think that, you know, Social Security, Medicare is going to take care of, you know, their medical needs.
But who amongst us likes to think about the worst case scenario, right? So who amongst us likes to think that, hey, one day I may be in a nursing home and I may be in there for a long time, it may actually be the last place that I reside in. Not realizing that a long term facility can cost 4, 5, 10, $12,000 a month.
And that becomes another animal to start thinking about.
So for instance, if you have half a million dollars in the bank, you think to yourself, well, I got half a million dollars in the bank, medical expense. If something happens, you know, I've got that covered, I have insurance, I have Medicare. Not realizing that, you know, Medicare doesn't cover long term care. You know, Medicaid does, but otherwise you're on your own. And you don't know that, hey, I'm going to be spending, you're going to be spending a lot of money taking care of yourself if you wind up in a facility.
And so it's just not, it's just the kind of thinking that's short term and not long term. And then thinking about the long term, okay, well, what is that realistically going to look like? And you know, in this day and age of, you know, Internet and, you know, AI and all kinds of tools that we have at our disposal, it's not that hard to figure out what is a realistic long term career, long term health plan, medical plan, crisis, emergency plan going to look like.
So it's an unpleasant thought and I get that, you know, who likes to think about themselves, you know, dying? Nobody likes to think about that. So they don't think about, you know, what has to be done in the event of, or on the way towards that. Right. So, but all you need to do is get sick today, really sick, and get a doctor's bill, medical bill from a hospital.
You can figure out pretty quickly, you know, medical expenses are high. And also the, you know, over the years, the inflation factor on medical expenses is much higher than, let's say, food and gasoline.
So it's very easy to, not to get sucked up to a pattern of thinking that, oh, you know, medical expenses are keeping track with their average standard of living until, you know, something happens.
[00:03:56] Speaker A: Gotcha.
So I love what you said about only having half a million dollars in the bank. I mean, even in the business that I do, you know, we do caregiving in the home. If you want a year's worth of good caregiving service, you're gonna spend $300,000. If you need 24, 7 care, I mean, that's just, you know, that's the long and short of it. So, you know, I get what you're saying, that $500,000 is not going to go far, especially if you, if you want to stay in your home.
So tell us, what are some of the financial tools or strategies that can help prepare for big medical bills now?
[00:04:29] Speaker B: Yeah. So depending on your age, you know, if you're young enough to, and you're working and you have, and your employer offers you a, let's say a high deductible health plan.
A high deductible health plan enables you to invest in an HSA health savings account.
In my case, for instance, you know, I'm 67, I'm healthy, my wife is working, she likes to work. We have insurance through my wife. Right. But her job, you know, does not give her a high deductible health plan. So I can't get into a health savings account as a result. But the sweetness of a health savings account is that you, if you have a high deductible health insurance plan, you can sock money away up to certain limits. Let's say seven, $8,000 a year for family plan, you can sock away.
It's an ira, it's a pre tax ira, except that it's for medical expenses. And so you can sock money away, take a deduction in your tax return and you can invest that money into the stock market, into whatever your HSA administrator allows you to invest in. And over the years that's going to compound, right? So the sooner you start, the better chances you have accumulating hundreds of thousands of dollars in HSA funds that when you go take them out, let's say you wind up in a nursing home or whatever, you can take that money out, never pay tax, never pay a dollar in tax. So it's pre tax, it grows tax deferred, and you never pay tax with money coming out. So you can have half a million dollars in that account. You wind up in a nursing home. You just take the money out and pay the nursing home, you know, $300,000 and, and you had the benefit of not paying less tax, letting it grow. Because taxes are the number one killer of wealth, right? So if you can control that piece, you can grow money much, much faster. So that's one thing, right?
Another thing you can do is maybe create a trust.
So there are different types of trusts.
I'm not a lawyer, I know enough to be dangerous, but I know you can have like something called a revocable living trust, which doesn't help you with Medicaid, but you can have something called an irrevocable trust. And there are different types, but an irrevocable trust is one in which you can transfer, let's say your house into that trust after five years of that house being in a trust and an irrevocable trust, you, it's as if you don't own it. And Medicaid, in order for you to be entitled to Medicaid benefits, which is what pays for long term care, by the way. But that's designed for the low income people or people who appear to be low income, you know, so you can have an irrevocable trust. Of course, savings, you know, proper planning, investment planning with a financial planner is my strongest recommendation.
Putting money consistently into a savings account over the years for that emergency fund and that emergency fund hopefully won't happen. You know, when you're in your 40s, it'll happen when you're much elderly and something seriously happens to you. So things like that. But the financial planning side, the big one is the planning, right? If you fail to plan, you plan to fail, right? So the planning piece, you just do that with financial professionals on the tax side, CPA or tax pro. A lawyer for an irrevocable trust. One who specializes in trust. Not somebody, a general lawyer who doesn't specialize in trust because they can create a trust in a heartbeat, but it may not have all the bells and whistles you need.
And then of course, a somebody to help you invest your money properly and stagger your investments so that you know you have money for when you retire, you have money for when, if you wind up in a nursing home. Also, long term care. I'm a big fan of long term care.
Again, I'm 67, I've had long term care since I was in my early 50s and the premium has gone up. But I know my wife and I both know that we are entitled to a fair amount of benefits. So combining long term care with these other things, you know, you have a shot at a very decent long term care situation.
It should have happened. Now, long term care, you know, if nothing happens and you die before you have go into a nursing home, those are premiums you pay. You're never going to get back, you're not going to enjoy the benefits unless you get a long term care policy that offers you return of premium. Gotcha. So there are things you can do. I mean it's just doing it early enough, planning it, being thoughtful about it and engaging the right people to assist you.
[00:09:23] Speaker A: Well Joe, you're making me feel very smart. Our financial planner did tell us to get long term care insurance. So let me just ask you about that. There are different, you hear different things from different people. So sometimes people say, well, you don't need to get long term care insurance until you're in your 50s or 60s because you don't want to be paying out all that money because what if you don't ever need it?
It's a lot more expensive when you wait until your 50s and 60s. So what in your opinion, what is the best age to start looking at insurance like that? Long term care insurance?
[00:09:54] Speaker B: Well, so you can get a life insurance policy with a long term care rider and the earlier you get a life insurance policy and the healthier you are, the lower the premiums. So that's something to seriously look at. So you can start very early on in your, you know, and your career, you know, as you get going, but certainly 50s, early 60s, that's when you know that that's going to be the time.
By that time, hopefully you know, you've, you know, you're not at the end of your career. But by that time many people who've been diligent in their financial matters are starting to see liquidity, able to save more. Maybe they already raised kids, maybe they've probably progress in their careers and you know, they're starting to enjoy the benefits of, of a good career and quality life and you know, things happen to people and yeah, you can wind up back to square one when you're 45 years old. That happens. But barring any extreme circumstances, starting early 50s is a good time. That's when we started.
And the price, the premium has been going up over the years. It's, it is now double per year what it was back when I was in my early 50s.
But that's just inevitable.
But the price of not doing long term care could be disastrous financially to you and to who you leave behind.
[00:11:17] Speaker A: Yeah, it can be bankrupting. I mean that's just truthful. I feel like, I don't know if you agree with that, but it can be bankrupting.
[00:11:25] Speaker B: I do.
[00:11:26] Speaker A: Yeah, it can be bankrupting. So Joe, that is amazing information. Thank you so much. And guys, we are going to be back in just a minute with more from Mr. Reyes.
We'll be right back with more insight, expert advice and stories that matter to every generation. And we're back. I'm Hilary Bailey and you're watching the Senior Care Conversation on NOW Media Television.
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Alright guys. We are back with Joe Reyes, CPA trusted advisor and someone who knows how to protect what families have worked a lifetime to build. In this segment we are tackling one of the biggest fears, losing the family home due to long term care costs. Joe has helped countless families navigate this sensitive topic with clarity and compassion.
So Joe, I have welcomed back. I have seen this in my work as well. You know, people have to choose between being able to pay for their care and staying in their home.
So why is the family home such a big concern in financial and estate planning?
[00:13:08] Speaker B: Yeah, that's a loaded one, right?
There's a lot that goes into that home, right?
It could be where mom and dad raised their children.
A lot of memories attached to that home. Maybe, you know, maybe the kids, you know, grew up in that home. It's like, you know, I love that house, you know, and I would love to live there again.
So just imagine being elderly, sick and having very little emotion. Sometimes families forget the elderly parents, you know, and so just imagine being alone in a home and thinking, thinking thoughts that you shouldn't be thinking, let's say, about being abandoned and being sick and things of that nature.
So it's a loaded, it's a loaded situation. Plus, plus, on top of the attachment, the emotional attachment, for many, many people, a home is their biggest asset.
Especially if, you know, they've been living in the home for many, many years. Maybe they paid down the mortgage, they own it free and clear, you know, and it's their biggest asset. So that represents most of their wealth, let's say.
Well, who wants to lose that, right? So having a conversation with your family about things of that nature is super, super important.
And if you're not careful, a dire disease can make that home go away.
And that could be emotionally disastrous to the entire family, but especially for the infirmed and the elderly who suffering every day in their minds and in their hearts. So I would think that families would be very careful about that as they see their parents progress, you know, in age. I have a 21 year old son and I talk to him about this stuff all the time, but that's what I do. But I want him to know that, hey, you know, we're looking to leave stuff behind for you, so you should have a vested interest in making sure things go right.
So the home is a big deal.
[00:15:22] Speaker A: It definitely is. And I love how you brought up the emotional attachment to the home because that's the, that to me, that's the biggest thing because, you know, I come across a lot. You know, I'll be talking to some family members and maybe about one of my clients and they'll say, yeah, I keep getting, I keep telling mom she just needs to sell her house and come, you know, live with us. We've got a room for her, we've got this for her. It's like, just like stop and think about what you're asking them to give up. They've lived there probably for 30 to 50 years.
You're asking them to give up something where they made their life. So I love how you brought up the emotional attachment because it's not always just about money. It's about what we did there you Know, like we raised our kids there. So thank you for bringing the emotion part into it because I think that's important.
So can you explain to us what happens if a senior does need long term care but they do own a property?
[00:16:14] Speaker B: Yeah, so.
So putting aside ethics and morals and what you think about other people, you could, if you wind up in a long term care facility, right?
If you're low income, Medicaid, not Medicare, because Medicare only covers its health insurance. It's not long term care insurance. So when you need long term care insurance, if you a low income, you need medicine, Medicaid.
But Medicaid kind of requires you to be poor and low income.
But if you put all your wealth, let's say you're a multi millionaire, let's just use an extreme example. Let's say you're a multimillionaire and you put your house, your wealth into an irrevocable trust and it sits there for five years before you ever need long term care.
After the five year period, it's called the five year look back period with the Medicaid. But after five years and in an irrevocable trust, you're not, you don't own that house really. Once you put into an irrevocable trust, the trunk owns the house. But if you get sick and wind up in a nursing home, let's say within three years of doing that, Medicaid rules just say it doesn't matter. You know, we're going to, we're looking back at that property, you put it in within five years of needing Medicaid.
So we're going to take that into consideration for the benefits that you're going to have.
But let's say five years passes, let's say 10 years passes unless you have millions of dollars. In an irrevocable trust, you can appear for Medicaid purposes as low income because they can't look past the trust because you don't own anything. The trust owns everything that you have.
So that's, you know, of course the ethics is, you know, why would a multimillionaire do that? You know, it's designed for people who are really poor.
But those are, those are the rules.
So putting, you know, your house into an irrevocable trust, if you're an average middle income, let's say citizen, it's not a bad idea to shield the assets you've worked hard to accumulate over the years to leave to your family.
And then the trust handles all that. Once you pass away, the trust will have all the marching Orders, so to speak, as to what to do. So that's one of my best recommendations, you know, because if you are middle income and you get sick and you wind up with $300,000 a year facility, you're toast. Really. Even if you have even your house is worth 500,000, 600,000, you're toast, right? You may get Social Security, maybe you don't have much else left.
You're not going to leave anything to your kids.
That house is gone when you die because they can't kick you out while you're living in there. But Medicaid has its eyes on that house so that when you pass, they're taking the house or they're going to make sure it's sold and take whatever reimbursement they're looking for for the benefits that they paid out.
So that's a big one right there.
You got to make sure it's the right trust. You got to make sure you have the right attorney designing it for you to make sure that your family, you do not lose the house. Especially if, let's say you have young kids, you know, and you wind up in nursing home. It happens, right? You can have a stroke at 25 years old. You can and 2 year old and you have a house, you know, you have equity in it.
You know, it would be very prudent to be looking at that child and thinking to yourself, what if, you know, and what can I do? And there are things you can do as long as you care enough to go look for the answers. And nowadays with AI and whatever, you can come up with a whole boatload of data to help protect yourself.
[00:20:05] Speaker A: So this next question, I'm kind of interested to know the answer.
What's the danger of transferring ownership without knowing the tax rules?
[00:20:16] Speaker B: Big As a tax professional, I have seen this so many times and it's, it's just crazy, right? So mom had a house in Brooklyn, New York, bought it for, you know, $100,000 years ago, put her son on the deed because she wanted to make sure, you know, it was safe in the family.
What she didn't know and what the son didn't know was if you put some, if you put somebody onto the deed, you basically give them partial ownership of that house, which is a gift.
And if the gift is over 18,000 worth more than $18,000, you may have to report that gift to the IRS. You may not have to pay taxes on it, but you have a reporting requirement, number one. Number two is what you pay for that house transfers over to your son, to that son. And when they, and when the son sold the house, mom died, he sold the house, moved to New Jersey. He sold it for like a $1.3 million.
So he had a $1.2 million capital gain. Because by doing it that way, mom basically said, the 100,000 I paid for it transfer to you. So your cost is 100,000. Now the tax guy said it's worth 1.2. You got a capital gain, you know, $1.2 million or $1.1 million, whatever.
Massive, massive tax bill. And the easy solution is just will it, will it to you, will it to your child. Don't give it to them. Don't put them on the will. On the, on the deed.
Will it to them, say, hey, I died, my son gets at the house. Now the cost basis is whatever it's worth at the time of that. Okay, in that case, it would have been worth over a million. It would have been over a million dollars. He would have had practically nil on a tax bill.
So not knowing what you're doing can be very. In his case, he had already spent the $1.3 million he got, and then he got the tax bill and then he was, he was up the creek, you know, and, and in those days, if there were some tax rules in effect that are in effect today, I could have wiped out that tax, by the way. But in those days, the tax law was different. We couldn't have done anything about it.
But, yeah, major consequences by not knowing what you're doing tax wise.
[00:22:34] Speaker A: Yeah, that's a little bit scary. But I learned a lot from the questions that I just finished asking you. Wow, I did not know that about the house. You hear people all the time say, well, I'm just going to put the house in my daughter's name. So I hope that people that are watching this, that are having that thought, think twice or maybe reach out to you. Speaking of, how can our viewers get in touch with you if they want help protecting their assets or setting up a sound estate plan?
[00:23:04] Speaker B: Yeah, my website is reyesaccounting.com so that's R E Y E S as in SAM. So reyesaccounting.com it's got all my contact information in there and, and we're doing some social media work. You know, you'll be seeing a lot of us on social media very soon.
But it's got my phone number on there, it's got my email. It's got everything you need.
Thanks for asking.
[00:23:27] Speaker A: Awesome. Well, thank you, Joe. So much. Guys, if you are loving what you are hearing, please come back in just a moment for more with Jo.
We'll be right back with more insight, expert advice and stories that matter to every generation.
And we're back. I'm Hilary Bailey and you're watching the Senior Care Conversation on NOW Media Television.
Welcome back, everyone. We are still chatting with Joe Reyes, CPA consultant and someone who's seen how money can bring families together or tear them apart. This segment hits close to home the stress and division that unspoken financial issues can cause during times of sickness or loss.
Joe's work goes beyond numbers. It's about peace of mind and family unity.
So the problem facing many families is unspoken money issue. And it often feels like one death or crisis could tear everyone apart.
Why do family money problems often come out during sickness or after someone passes away?
[00:24:34] Speaker B: Yeah, so that's a good question.
If people have, if people, if nobody's talking about what to do if and when, when something happens, all of a sudden, you know, everybody's thinking, well, I wasn't expecting that.
Where did you get that from?
Why is that? Why is this one favored over me? Because now you're having a conversation that should have happened long ago, right? So not being prepared for those kinds of conversations will create chaos, you know, and if, and usually and think in terms of mom and dad and the children, let's just say, you know, because it's not always that the case. But dad passes away, Mom's left, right? And people, that's what happened in my family. And we had, we were having these conversations.
But you know, people make assumptions, you know, mom loves all of us the same, is going to be equal, right?
And then mom passes away or something goes wrong, you know, and she's in a nursing or whatever. And now you're starting to deal with hospice care, all kinds of wonderful situations. And, and then you start having the serious conversations. Then when the crisis is through the roof, emotions are sky high. And maybe, you know, people are starting to not get along as well as they should because it's a crisis situation which is expected.
People are going to start, you know, they may find out the hard way that, well, mom just thought that this brother needed a little more support than that brother.
And so maybe mom does love us all the same, but maybe she cares for one more than she cares for the other because that one needs more care, something along those lines. And people, families get ripped apart by not having these conversations, by not being prepared, by not planning.
So all kinds of bad things come out of the woodwork.
Somebody may be struggling financially, you know, and, you know, and only to find out that, you know, maybe, you know, at mom's passing, they're not going to get what they thought they were going to get. And that adds to the crisis, adds to the energy that, the negative energy that gets created in that situation.
So it just behooves everybody to not make assumptions, ask the questions with dignity, love and respect, which is hopefully what a family is all about.
And try to have an adult conversation and not be loaded up with a lot of negative emotions. And then, you know, not every family gets along. And so you can only imagine how many families get ripped apart because of greed or suspicion or maybe somebody's on drugs or unable to handle, you know, take care of their stuff and they, you know, destroy everything in their lives, you know, so the whole family is going to be wanting to consider that because sooner or later that conversation is going to be had.
[00:27:57] Speaker A: You know, I think something that I, you know, I remember from being small is, you know, we didn't really talk about money in our family. You know, I know my grandparents never talked about how much money they had. My parents never talked about how much money they had. It just wasn't something, it wasn't a kosher topic to talk about. You know, I think people are more open these days talking about how much money they have or. Because maybe we, or maybe we try to show how much money we have by spending and buying this and buying that or how much money we wish we had.
So what is the benefit of having hard financial talks before a crisis hits? To me, I would think it would be, there would be a hundred benefits.
[00:28:39] Speaker B: Oh, all right.
[00:28:40] Speaker A: Yeah.
[00:28:41] Speaker B: Let me count the ways, right? I mean, I'm a dad, right? I got a 21 year old son. I love him more than I love myself, right? So, I mean, and he knows it. I mean, he's got me wrapped around his finger and it's hard for me to like yank him in and put my foot down, which I do. But.
And I'm talking to him all the time about, you know, you know, what we have and what, what to do in the event of, you know, because I want to see him flourish in life. I want to see him have a good life right now. If I'm not going to do my part in that, that child can, you know, wind up with a very bad surprise, wind up having a miserable adulthood, right? So if you love your kids, you're going to help plan because most parents love their kids and they Plan day to day life, you know, to their benefit, for the good of their family and the good of the kids. But this is a part of life also.
And by not having the conversations, you could be feeding into a chaotic life for that child, your children in general, and grandchildren. Right. So by not doing what needs to be done, you're basically leaving behind chaos, you know, and I've seen it so many times where it's so chaotic and, and then it gets expensive, you know, because if things are not in order, money that could have gone to the family and the kids or whatever is going to lawyers, CPAs.
[00:30:09] Speaker A: Yeah.
[00:30:10] Speaker B: All kinds of professionals, you know, and, and the courts. And then there's delays. And if one person challenges what's in the will or the trust or whatever, it can wind up going to the courts, and then that's more legal fees, more delays, you know, and now you're dealing with the. You should be dealing with grieving, you shouldn't be dealing with this stuff. Right. Yeah, it's gonna happen, but it doesn't have to be as nasty and ugly as it could otherwise be. Right. So I would say, you know, have the conversations, you know, plan accordingly, be respectful of each other and, and take into consideration who the players are. You know, so if there's five kids, like in my family, you know, having a trust maybe, and you can control your kids from the, from the grave, you know, you can't do that with a will, but you can't do that with a trust.
But that planning part is. I can't express how important that is to keep the family unit intact or give it the best shot of staying intact.
[00:31:11] Speaker A: Yeah.
So, I mean, I completely agree with that. My mom, you know, I know the conversations are uncomfortable and I think it's like, people are like, well, that's a, you know, uncomfortable conversation. I don't really want to have that. Well, let's have one uncomfortable conversation that could negate years of fighting and complications.
I'm grateful my mom set my brother and I down and we're like, hey, this is.
[00:31:33] Speaker B: This is.
[00:31:33] Speaker A: This, this is what? Is what? This is what we're doing. You know, so there's nothing that, you know, so we're not like, oh, what are we supposed to. We know exactly what we're supposed to do. We know exactly what she want. We know exactly how it's going to go. So for me, I'm so grateful because that just takes all of the fear out of it for me or the wondering, because I know exactly what we're supposed to do.
So I would wonder if maybe, you know, if there are some family dynamics going on, which, like you said, all of us have some, some family dynamics. Would it help to maybe have someone like you in the room that can kind of lead the conversation? Have you done that before? Is that something you recommend?
[00:32:13] Speaker B: Yeah. So when, when it gets icky, shall we say? Yeah, when it gets icky, it's a good idea. And I, I've told, I've told clients this before.
Look, you know, I have a client right now, for instance, that the family unit is. Looks like it's going to dissolve, right? And it's, it's lit on the ugly side. So what I just tell people is just tell the other party.
Your accountant said this, you know, so if you want to. And that takes the pressure off of you because you just, you're bringing a third party into the conversation. And I'm just doing. My accountant told me to do. You know, that's what I just tell people. Especially, like, if they're, you know, if they're disputing with somebody, something, some. There's some kind of business conflict or they have to ask somebody for something that's sensitive. They don't want to offend them. I said, look, just, just tell my accountant said, I need this. And you put the blame on the accountant. What are they going to do, call me? You know, they're just going to do whatever you gotta do, right? So.
So, yeah, use a third party. Say, hey, you know, I was talking to my accountant the other day and he brought up a good point. You know, what's my estate plan looking like? Then I got to thinking about, hey, what are you guys. How about your estate plan? They say your family of five, right? What are your estate plans? Do you have anything? Well, you know, what about mom? You know, and then it doesn't have to appear like you're being greedy or you're trying to figure out, you know, what you're going to get your hands on, you know, something happened to mom. But having that conversation for death, having the conversation for nursing home, like, hey, guys, you know, we don't need to talk to this in front of, in front of mom during Thanksgiving, but, you know, maybe we should have this conversation. And, you know, nowadays you have a zoom meeting where everybody chiming in from all over the world, you have a family of five from all different five continents chiming in at the same time talking, right? So it's easier to have that conversation, but it has to be had again.
[00:34:07] Speaker A: Absolutely. You are completely correct. So I know you've talked a lot about the irrevocable trust, so I kind of want to go back to that. Is that a tool that families can use, say no one is getting along, siblings aren't getting along.
It's just not a close, tight knit family. So say if they set up an irrevocable trust, nobody has a say in anything and it just goes the way the trust says that it goes. So is that a tool that families who may not have the best relationship, is that a good tool for them to use where they won't have to have so much interaction?
[00:34:40] Speaker B: It's an excellent tool because when you have a trust you have to appoint the trustee.
So if you have an irrevocable trust and you're healthy and all that stuff, you know what you're doing, you could be the trustee of your own trust. Right. But that trust is going to spell out this is what happens in this case. In that case, you know, let's say Junior is 18 years old and is dabbling with drugs and alcohol. We all know that. And he's not going to school, he's not working, he's not going to college.
You know, you can put into that trust like you know, Junior is going to get, I have a life insurance policy that pays into the trust, let's say, and Junior is going to get $100,000 when he hits 25 and has a bachelor's degree.
And if he doesn't have a hundred thousand dollars that if he doesn't have a bachelor's degree by then or he doesn't have a occupation, a trade or something constructive and quit drugs, that hundred thousand is going to go to the brother that he likes the least. You know, you motivate the kid.
[00:35:39] Speaker A: Yeah.
[00:35:39] Speaker B: You know, so, and it's in the, it's in the, in the rules of the trust is. And writing and the trustee, you die. The next person on the list of trustees takes over. They are bound by those rules that are set in that trust. They cannot go and start changing things around. And you would need to speak to a lawyer to see if they can. But they can. My understanding is they cannot because it's not, it's no longer yours. It belongs to the trust.
So you can control your entire family from the grave.
[00:36:13] Speaker A: Wow.
[00:36:13] Speaker B: And I've seen, I've seen businesses, funeral home and actually I've seen businesses owned by a trust and they, it's, it goes on and on for a long. Trust can be intergenerational.
You can control your kids, your grandkids your great grandkids, you can just, you can go to town. What do you think the wealthy do? The super wealthy, they do this stuff every day, twice on Sunday. They control their wealth with trust and whatnot and they can control the family.
And so yeah, the simple answer is yes, you can actually do that without and then they can't argue with you because it's in the trust. And they can try taking you to court, but it's in trust, you know.
[00:36:52] Speaker A: Yeah, that's perfect, Joe. Thank you for that amazing advice. Guys, we're going to be back in just a minute with a little more from Joe.
We'll be right back with more insight, expert advice and stories that matter to every generation.
And we're back. I'm Hilary Bailey and you're watching the Senior Care Conversation on NOW Media Television.
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Alright, welcome back guys. We are wrapping it up with Mr. Joe Reyes, longtime CPA, financial strategist and someone who's helped countless families find peace by planning ahead. The final segment is about what happens after we're gone and how to make sure the people we love aren't left sorting through a financial mess. Joe believes legacy is about more than money. It's about clarity, peace and preparation. I could not agree more. Joe, welcome back.
Why is it so important for seniors to have a clear financial plan for after they pass away? Way.
[00:38:29] Speaker B: So as you mentioned earlier, I mean, I have a degree in theology. Right. So and I'm a cpa, so I specialize in death and taxes, which are the two certainties in life.
[00:38:40] Speaker A: Exactly.
[00:38:42] Speaker B: And I do like to talk to people about both.
And first of all, you know, planning for the future, planning for, for the lack of a better word, your demise. Right.
I think people should be thinking about that for their own, for their, for themselves and their own well being as they enter eternity.
But other than that, it's also what they leave behind in terms of not just monetary legacy. You know, you can have massive amounts of wealth, you know and we've seen people who have great wealth and terrible families, you know, and all kinds of bad things happening. So the, the legacy that's really going to last is the legacy you leave behind and family relationships. You know, we've heard it, we hear it all the time. You know, I, I wish I hadn't spent so much time trying to build wealth and spend more time with my family. We hear about that from people all the time, you know, and there's a good reason for that. Love and emotional well being far exceeds any kind of money that you can possibly have.
So, you know, leaving behind a family that's healthy and happy is super, super important. You can always make money, right? But you cannot get the years back of a miserable, a miserable life or a life thrown away or to addictions or whatever. So I do encourage people to, you know, of course, spend the time with your family. I don't need to tell people that, but leave behind the resources that people can use.
That's not going, that's going to give them a standard of living that's reasonable.
They may not need a wealthy standard of living, but certainly a standard of living where, you know, they don't have to worry about losing a house, let's say, unless they make some major mistakes or something, major downturn occurs in their lives, you know, but through proper planning, you can leave behind a legacy to your children and to your grandchildren by talking to them about these matters, these financial matters, training them in financial matters, making them fluent somewhat in financial matters so that should you pass or should you wind up in a nursing home, they're not being taken by surprise.
Right. That's so key. Right. And should they learn this stuff in school? Yeah, probably. Right. But why leave that to chance? Talk to them about your finances, you know, your holdings. What happens if something happens to you in this case, in that case, and they walk away with that. And what you're doing is you're passing along a financial literacy legacy to your kids and to your grandkids. Because if you do this, they're going to do it for themselves and their kids.
They're more. That's more likely to be passed down than if you don't talk about these matters and you don't take the proper precautions and you don't put everything on paper and you don't create, you know, maybe a, an, a letter of intent, let's call it that letter of intent is after all is said and done, you know, with the trust, with the will, with the probate, whatever. And all this These terms or whatever, a document that says, at the end of the day, this is what I want, you know, and that can get rid of a lot of, you know, confusion and bring clarity to their relationships. So you get, you know, Johnny, you're getting this. Jim, you're getting that. Samantha, you're getting this, whatever. But at the end of the day, you know, this letter of intent that, you know, my heart. My heart's in this document, you know, so. And with this happened in my family, there was an arrangement that I didn't know about. I'm the executor of my mother's instructor state, and there was an issue, and everybody's looking at one brother. We're thinking to ourselves, what's going on there? And then my sister had to call me and pull me aside and say, you don't know this, but I had a conversation with mom, and she expressed to me her intentions, her desire for that brother. And had she not told me that it wasn't in any paperwork.
And of course, you know, loving my family, my mother, I'm like, thank you for telling me that. I did not know that.
I would never have known that had she been hit by a car, I would have had to take action not knowing what my mother wanted. Right. It wasn't paperwork. So you leave a legacy behind of family unity, or you put the odds in the favor of the family and hopefully everybody honors it.
[00:43:14] Speaker A: Well, thanks, Joe. I want to use these last couple of minutes to talk about.
I know you've talked a lot about trusts. What is the difference between a will, a trust, and an estate plan?
[00:43:27] Speaker B: So a will is, upon my death, I want this to go to this person, this to go to that person. These are instructions. I want to be cremated. I want, you know, that kind of a thing.
[00:43:37] Speaker A: Okay.
[00:43:37] Speaker B: And it's, It's. It's good and pretty much valid upon that, and that's about it. The assets got distributed to whoever you will it to and whatnot, but that's it. You know, it's not going to really impact what you want to see happen in five years.
And you still own everything. So whatever's in your name, that's what's part of the will that you, you know, giving out as inheritance. A trust, on the other hand, is a separate legal entity.
And we'll just talk about irrevocable trust. But there's something called a living, revocable trust, which is vastly different than an irrevocable trust. But an irrevocable trust is just that. It's Irrevocable.
So if you put your house into that trust, the trust now owns that house, and you. Let's say you get sued and somebody wants to take all your assets, well, you don't own the. You don't own the asset. You don't own the home anymore. The trust owns it. So they're gonna have to try and sue the trust.
Can they sue a trust? Yeah, they can find it, you know, and they know it exists, you know, But a trust is a private document, whereas probate, when you have a will and it goes to probate court, it gets probated. It's public information.
But a trust is private. And you can then put. You can put everything you want into a trust, and then the trust documents will stipulate. I want this to happen. I want this to happen when I die. I want this to happen When Johnny hits 10, he hits 20, he hits 30. You can control Johnny from the grave.
You can do all kinds of things for years to come and control people from the grave, control your legacy and distribute assets as you want over a period of time. So that's a big difference between the two. And an estate plan is basically pulling it all together.
A will, maybe a health directive. Like, for me, I told my wife, I'm not going to be a vegetable. Don't make me a vegetable.
The brain is dead. Let the body go, please. I don't want to be in a wheelchair staring into the. Into outer space and not knowing I'm on the planet. Right? And you're keeping me alive with drugs. So she knows, Right? So health directive is super important. Otherwise, you're leaving it to doctors, pharmaceutical reps, I like to say, to decide what they're going to do with that body. Right? So an estate plan pulls all that together and gives everybody involved marching orders as to this is what I want to see happen. A letter of intention, if you will. Like just saying, you know, at the end of the day, my ultimate goal is that everybody's happy, taken care of, you know, well cared for with money and property or whatever. And, you know, the system may get the fur coat and the jewelry.
You know, the boy may get a car. You know, stuff like that.
That's not a legal document. The estate plan is not a legal document.
[00:46:27] Speaker A: Gotcha.
Joe, this has been such an amazing conversation for anyone ready to start building a peaceful legacy. Where can they find you Online?
[00:46:38] Speaker B: Yeah, my website is reyesaccounting.com. that's R E Y E S as in SAM accounting.com and it's got all my contact information and I have clients around the country. We're not limited by locality, even though we're just outside of Philadelphia. Thank you.
[00:46:54] Speaker A: Awesome. Well, we are definitely going to have to have you on again because I have so many more questions to ask you that couldn't fit into our 48 minutes.
So, Joe, again, thank you so much for being with us today on the Senior Care Conversation. Your decades of experience, calm wisdom and clear insight remind us that planning ahead isn't about fear here, it's about love to our viewers. If you've ever felt overwhelmed, unsure, or just didn't know where to begin, remember, every step towards preparation is a gift to the people who matter the most to you. Whether it's protecting a home, reducing financial tension, or building a legacy of peace, it starts with having the conversation. I'm Hilary Bailey, and this is the Senior Care Conversation. Until next time, take care of each other and and take care of the future.
