So this episode we’re going to talk about wills and trust, which is something a lot of the officers that I’ve talked to have brought that up. That’s like the one question, hey, can you find out about wills and trusts? And I don’t know anything. I don’t have one that’s up bad on my part. I don’t know anything about it.

So to me, this series with our guests, Cindy Starkey, is very exciting because I don’t know anything about it. I know I need to get one, I didn’t I don’t know the difference between wills and trust, but I don’t know about you. I don’t know anything about them. So we’re going to find out about them. So stay tuned if you want to hear more or learn yourself.

Welcome to the Cedar Harbor Show, where financial education meets real life choices that impact your family, your future, and your legacy. I’m your host, Mario Braga, and on this podcast, we get real. We connect everyday people with trusted professionals who break down the tough stuff pensions, tax, planning, insurance, and today, estate planning. This episode is part of our law enforcement series and I’m joined by my co-host, Officer Tarrant, an 18 year seasoned veteran in the field.

Our guest today is Cindy Starkey, a powerhouse attorney with 35 years of experiences in wills, trusts and probate law. She’s the owner of Cynthia D Starkey, Pllc and has guided thousands of families through some of the life’s hardest moments. Today, we’re answering a tough question is your will just a document or a disaster waiting to happen? So on that note, welcome, Cindy, and let’s do this.

Let’s rock the house. Welcome back. I’ll be excited for another powerful episode. And, I don’t know. We got a lot to talk about, so, you know, where do we begin, Miss Starkey, Esquire. Well, I’m happy to be here. And nice to meet you, Officer Ty. Mario. I guess we could start with. Why do police officers need a trust?

It’s a great place. Very good question. The title for this one, because I have a lot of questions about this stuff, and I don’t really know a lot about it, so I’m excited for this one. Do you have a will or trust of supply? No, I mean you definitely need one. Really, everybody needs a will or trust. That is the reality.

But police officers and first responders probably need them more than anybody because as you know, you put your life on the line every time you go to work. You could be out there and get incapacitated or killed, and you need to have a will or trust in place, because that tells people who you want to act on your behalf.

If something were to happen to you and it tells your family members how you want to distribute your estate, in the event that you know something that happened to you on the job. I don’t know what the statistics are for law enforcement, that your mortality rate has to be lower than police are 67 years old, is what we saw.

Yeah. It’s an it’s it’s not good even when they retire to like the right. I mean we should pull that up time. But the stats aren’t very well. We saw it the other day and we were looking into it, and I think it was lower than a firefighter. And I thought firefighters were at the lowest, but they police officers actually are one year behind the average, firefighter male.

Yeah. I mean, I remember going I remember when we started, that was one of the little spiels they gave us was about taking care of yourself because it was something like, you know, most fire or most police officers only. It’s like five years after they retire. You know, there’s a lot of them that passed away from, you know, heart disease or, you know, all kinds of lists, a laundry list thing.

So it’s a stressful job that’s going to impact your health part of it. For the sleep deprivation is a big part of it, too. You guys, you’re erratic. Sleep patterns. Yeah. Third shift I get I always tell people I enjoyed working third shift, but after a time that really starts to really drain your body and you just. You can’t.

I don’t know how to describe it unless you’ve been through it, but it definitely it definitely affects you in negative ways. My sister works third shift and it’s hell on your body. Really and truly. And a lot of people don’t think about putting their estate planning in place and getting a will or trust until, you know, their elderly things start to get to seven degrees and they’re like, like, could be the end of the road.

Maybe it’s time to start planning. But really, everybody needs to plan sooner rather than later because you never really know how much time you have. And especially if you have small children, even if you don’t have a lot of assets that you need to dispose of, you should, if you have an estate plan in place, either will or trust in it and provide for who takes care of your children if something happens to you.

And also, can determine who handles the money because that’s not always this is going to be the same person and the person that you want to raise your children. If something were to happen to you and you have minor children, not necessarily the same person you want to handle your money. Like, for example, I would probably have left my kids to my sister.

I would never have let her handle that. We have to get that out. Yeah. To get that, you know, watch this podcast. You’ve seen it. She doesn’t care what she did. You might get a phone call later.

But it isn’t. It is important to have an estate plan in place. And there’s a number of different ways that you could do it. You could do a will or trust. Or there are other mechanisms that you could also use in order to distribute your property after your year. So on that note, would you you know, I don’t know about you, but I’m pretty confused about really the differences in wills and trusts.

I know that trusts are more robust and I don’t know if that’s like a legal entity. I don’t really I kind of get confused by the whole thing. I don’t just pretending that when we pass on, but I don’t really get it. Yeah, and that was my question to like, what? What would be, I guess, benefit for each one.

Like, why? Like why would somebody consider a will? Why would they consider trust and like what, what what situation would maybe I do a trust instead of a well like vice versa. Like what would be like especially for a police officer. Like what would make me want to do a trust instead of a will or, you know, whatever.

Well, that’s a really good question. And there are very big differences between wills and trusts. A will only takes effect once you die. A trust you could put into place and it could manage your money. A trustee acts on behalf of you, you. And it’s typically you or your wife are the trustee of your trust, but it could be somebody else.

But, that can take place that can become effective immediately to manage your money. So if you were incapacitated and not killed, your trust takes effect. But the will only takes effect once you pass away. Oh. Okay. Big difference. Yeah. A will you have control over all your assets up until the day you die? Trust. Check.

Look, link. Technically not. Because the trustee is a person who’s acting on your behalf, but in reality, most people appoint themselves. Or, you know, if it’s a spouse, they point, you know themselves, and their spouse is a trustee of the trust until until the time that they’re incapacitated or they die. Wills have to go through probate, which means you have to go to court.

And there’s a lot of reasons why that makes a big difference. Trusts are administered completely outside court. You don’t have any court approval. So it’s, it’s a much easier, less convoluted. So seemingly should seamless transition. It sounds like that’s correct. There’s so wills tend to be less expensive on the front end because you’re not you know, it’s usually just a will a power of attorney a health care power returning a durable car returning.

I do all my will package, all my estate planning packages or estate planning documents and packages. So if I do a will package, it’s a will help care power of attorney and a financial power of attorney. And if it’s a trust package then it’s a it’s a whole host of documents to trust the will that goes along with it.

The powers of attorney, a deed to transfer your property, the funding instructions. I’m trying to an assignment, and then we actually have to fund the trust. So it’s a much bigger package. So the trust tends to be more expensive at the very beginning. While the will is cheaper in the beginning. But when you pass away and you use your will, you have to go to court and file a probate, which becomes more expensive, because then you have to hire a lawyer to file the documents.

You have to have the court to approve everything, and there’s filing fees and publication fees and things. So in the long run, a will doesn’t end up saving you money. A trust ends up saving you money in the long run, but it is more expensive in the short term, and so do all trusts. Then come with the will.

Is that just part of it if you’re going to do it? Yep, they all do. And it’s called it’s a special kind of world call a pour over will and the reason why it’s called that is because, the most important thing about a trust is that you fund it. If you don’t, if you get a trust, you can have the best trust in the world.

But if you don’t remember to put your assets in it, it does you absolutely no good at all. When you die, you have to go to court and you have to, file a probate and open a probate. Don’t want to do that. So it’s very important that you fund your trust. And sometimes, you know, you get busy when you first do your trust, you try and put all the assets you have at the time that you’re doing your trust into your trust.

But sometimes life goes on. You buy, you know, you trade in vehicles, get new vehicles by all you know, trade in your house and get new house. You might buy a vacation property, you might buy expensive jewelry or something else that has a title like, I don’t know, the guns have titles. No, but some of them can be pretty pricey that you’d want to sell, especially now as like goes on sometimes.

You know, it’s been five years since you did you trust you might forget to put something in it when you buy something. And so, the pour over will pour over anything that you left out of your trust into your trust that you don’t have to open a probate up to $75,000 once you pass that $75,000 value, cumulative value limit, then you got to go to court to transfer that property.

And you’ve defeated the whole purpose of having a trust because it’s outside of the trust. Yeah, because only the things that are put into the trust title, you know, that are retitled into the name of the trust, end up in the trust and can pass pursuant to that trust document, and then everything else is outside of it. And either passes through your pour over will.

Or if you’ve exceeded that amount, then you have to go to court. Then, the court has to probate your what’s left of your estate. So that’s a bad thing. You don’t want that to happen. Well, I kind of had that happen to me with with the girls insurance policies. Oh, because we didn’t put the owner of the policy.

You left it in my grandmother’s name, okay? And she had passed away, and she passed away, and we had to go to probate, I guess it well, I guess it avoided probate cause it was under 10,000 or whatever the threshold was. Cindy helped me with that. Okay. But we did. We had to do quite get it. You had to do a couple documents that would be submitted to the court, but we avoided probate because it was underneath.

The value of the life insurance contract at the time was underneath that partial, but still such a hassle. And it’s it took a lot of time and we couldn’t get the we couldn’t transfer ownership to my mom. She was the next of kin. Yeah. And it would have been so simple. And my grandma had a trust. But to your point, we didn’t transfer those assets.

We didn’t. I guess what you’re referring to was funded, right? Which funding isn’t just writing a check, it’s about getting all the assets. And so it is what your. It sounds like you mean by that. How does a pension work with that? Do you. Funny. Is that like funded into a two or what is that. So pensions typically expire when you expire unless you’ve made a provision so that your spouse gets a continuing benefit.

And there are, certain things that you’re never going to want to put in a trust or I shouldn’t say never, because you might want to title them as a contingent beneficiary just so that there’s always somebody there who can take ownership of it. But typically anything that’s a federally qualified retirement benefit, like a 401 K, an IRA, or those kinds of assets, you might have, when I work for the attorney General’s office, we had deferred compensation plan.

So we had a big chunk of money in a deferred compensation plan, things like that. You don’t want a title into the name of your trust, because under the IRS statutes and I’m no expert, I would talk to a CPA, but if you have an item like that, there are different rules for how it has to be passed and distributed.

And so if it goes into a trust, I know that it has to be distributed within one year. And there’s tax consequences to that, because say you have $500,000 in a qualified, IRA and you have to take 500,000 within one year, then you’re getting taxed on that 500,000. Whereas if you have a spouse and you leave it to a spouse or a child or a person, they can take it out over the course of 5 or 10 years when they need it the most, so that it benefits them more tax wise.

So if they have a really low earning year, they may want to take more out. If they have a high earning year, the month take less out just at the end of the five years of the ten years, as long as they’ve distributed the entire amount, they’re okay under the IRS regulations. So those are the kinds of things that you’re not going to want to put in a trust.

And if it ends when you die, like a pension, that one go into a trust anyhow because there’s nothing left that makes sense. Mara, you look confused or you just said a lot and I you went in the qualified. I thought we were talking about pensions, but yeah, there was just there’s a lot going on here. This is a big, big conversation.

So and you know, I’m really excited because this is going to be one of many conversations that we’re going to really kind of break down these subject. It probably have a whole episode on funding a trust. Yeah. That’s that’s a that’s a good one. That’s a good idea. Right. You know and again it’s, it’s so, you know, and which ones are going to be more applicable.

Right. Because you have different situations going on, you know, with your off duty options and then well second careers and yeah. And oh, so what I was thinking too, I wanted I’d like to get into now, but even like once I retire in the more it’s like investing type stuff in like real estate investing. And you always hear people talking about putting and I don’t know with you.

So you would know like having a separate would you do separate trusts for like say you buy an investment property, you buy a multifamily or whatever? Would you want that in the same trust with all this other stuff, or would you want it it’s own separate deal where it’s by itself. So ideally, if you’re getting into real estate investment, you want a different LLC.

Establish for each property that you own because that protects then if you have a catastrophic event and, you know, a rental home, somebody dies in the pool, drowns in the pool or something, then they can only attach if there’s a lawsuit, they can only attach the equity and, the value of that asset and all other assets are protected so long as you’re not co-mingling assets.

But when you’re investing in real estate, and if you’re going to have multiple pieces of property, I would recommend that you do a separate LLC for every single property and have a trust for those two, like a separate trust with each one or the owner. Be the trust you what you do in the owner. Be address I mean the owner of the LLC.

Be a trust. The owner of an LLC could be a trust what you’d want. Let’s let me think this through. So what you want to do, you’d have each business in a separate each piece of property in a separate LLC, and then that you put that LLC into your trust because you can put LLCs and partnerships and businesses that you own as into your trust and then how you’d want to do it.

So there’s extra layers of protection. But so it’s normally came after it came after the trust prove or say like you’re that scenario they’re coming after one of the properties. They’d only get that one LLC or whatever, whatever it’s under. And that’s how you okay that epsilon protecting that one. Yeah. You’re saving it from your other stuff. It all okay.

So can I ask you a question here. When you say put it in the trust again, are you meaning you’re titling it to the trust. That’s correct. Okay. That’s that’s which we I put it into the trust okay. So the owner is in essence the the trust. Trust. Okay. And that study, you can figure out with that. Go ahead I’m sorry.

Oh I just said I’ve seen people talk about that to having a trust. I just couldn’t remember if it was something where they set up a trust group in an LLC for everyone they own, but that makes sense. You have a trust, but then you have an LLC for each one and then put it okay, and you could do it either way.

But if you want to be, it’s nice to have it all in one place in your, you know, in your main trust and have separate LLC. As long as you’re not commingling money, you’re going to be able to protect and, keep the exposure to that property and the value of that property only. But if you have it, if you have all of your property in your one trust, your main family trust, that kind of gives a roadmap to the person who’s left behind.

You have to administer your trust. They know everything that they need to collect because here’s what you do when somebody passes away, whether it’s a will or a trust. If it’s a will, the personal representative collects all the property, goes to court and says, here’s all the property that this person own. Here’s the will that says, this is how it’s supposed to be distributed.

And they ask the court to, you know, rubber stamp it and say, yes, that’s fine. And everybody signs off on yes, we agree that this is the way it’s supposed to be distributed. It’s it’s a will. And you have to go to court. It’s a really time consuming process, which is another reason why trust is more beneficial. If you go the will route, you not only have to file with the court, but you have to file a notice, and publish it in the newspapers to put all creditors on notice that you have died and that if they have any claim against your state, they can make a claim against the estate by filing a

document with the court. And you have to publish that, and then you have to wait four months and sit there and do nothing for four months and just wait for creditors to show up and say, I have a claim against their state. And if they don’t file that document within the four months, then they’re barred from collecting it.

As long as you didn’t know about as long as your personal representative didn’t know about it. But otherwise you’re just sitting there from four months doing nothing. So usually it will take like a year to get a, an estate probated from start to finish, and it’ll probably cost probably around $5,000, maybe more, a lot more if it’s contested.

So that’s the back end expense of a will where the trust is not even that expensive on the front end, and you don’t have any of those expenses because you don’t have any waiting period. You don’t have to file anything with the court. There’s no fees. You might want to hire an attorney to give you advice. If your trustee has questions about how to administer the trust, but their involvement is going to be way less than if you had to actually file a probate because you had a will.

Ask you a question. So let’s let’s back up a little bit and just go with today’s scenario, okay? Right. Right now you don’t have a will I don’t have or a trust. Yes. Right. Heaven forbid there’s an accident on the job. Right. So kind of where where’s this family at. Because there’s nothing in play. Okay. So then you still have to go and file a probate with the court, but it’s an intestate probate, which means there’s no will.

And that’s even a little bit more complicated. So if you have a will that appoint somebody as a personal representative, then you go and you file, you can file something called an informal probate. And that is a little bit more streamlined, a little bit less expensive, a little bit less court oversight. But when you don’t have a will and something happens to you, now you have to go to court and file a formal probate and the Arizona statutes say who has priority to be the personal representative, it’s spouse and then children and then parents, and then, you know, it goes out brothers and sisters and keeps going, you know, further and further family relations with

a spouse. It’s not a big deal because you know, your spouse is going to be the one who is your personal representative. If you have three children, I have an estate, a probate. Right now, there’s two children, and both are disagreeing with who should be the personal representative. And they both are equal. You know, they have equal priority under the statute because it just says children, it doesn’t matter who’s older, who’s younger, who’s smarter, who’s better educated.

Now you have to go to the court. If they won’t agree, and you have to ask the judge to appoint the best person, not a good situation. So at the discretion of the judge, after he interviews both parties, it’s at the discretion of the judge. And it’s going to cost a lot of money. You know, a lot of a lot of estates getting eaten up by court fees.

If there’s disagreement among the beneficiaries. And one of the ways to make sure there are no disagreements is to have everything in writing, in a will or trust that says, this is who I want to act on my behalf. This is where all my assets are going. You might have special things that you want to get. I want to give a gun collection to my son.

I want to give jewelry to my daughter. But if you lay it all out, then there’s a lot less chance that, there’s going to be conflict and your estate is going to be up in, legal fees. Something you may get a will, but I know it sounds like I need to get a will to the honor trust.

We both need trust. You know, it’s funny, I personally, I’m sure she knows the they do that wills for heroes thing. And I’ve meant I’ve meant to do that a lot of times because, like, when I was in law school, one of my professors did that she would go down to whenever they do it at the was at the Coliseum.

I think when they do it sometimes and they’ll have them, I’ll show up and do it. But or I just pro bono people, just U.S. attorneys just come in. Just it’s like waiting a year. Yeah. It’s like once a year they do it for like first responders, firefighter like stuff like that. Military guys, they do that, that dental thing.

I think in the same thing, like they help out veterans who need like dental work and do wills for them. Yeah, that’s a really good program. I take advantage of it. If you don’t if you don’t have anything, it’s worthwhile taking advantage of. I think the attorneys do it pro bono. They’re just estate planning attorneys, and they show up on the day and whoever shows up, they, you know, it’s just a general form.

So you’re going to get the most basic, estate plan, but it’s still far better than nothing. Better? Nothing. Yeah. Yeah. Well, I mean, we got to get some that in place, because otherwise that’s mess. Sounds like. Yeah, well we’ll call I mean, this is obviously a big, massive topic. And, And Cindy, I want to thank you for coming on and being part of this and being a guest on our show.

We’re trying to peel back a lot of different subjects and topics that, you know, a lot of law enforcement officers as, as, you know, we have a lot of that in my family. So I’m fortunate enough to be kind of quasi related to, Cindy, er, full disclosure. Yeah. And, and so we just have a lot of law enforcement, our families.

Yeah. You know, and so I definitely have heard them, their challenges. And that’s what our show is all about. Yeah. Right. It’s trying to bring just, not only basic information, but more detailed information for those people who do want to deep dive a little deeper and, I definitely look forward to working with you further, Cindy, and helping us understand a little bit more about what’s just, I don’t know, to me, a very terrible subject.

Yeah. I think, you know, I don’t have to say. And I’m sorry I hear it, but I just like I do is probably way a lot of people put it off because it’s not something you want to talk about having to die, you know, like, it’s like it. It’s a life insurance. Yeah. License or Joe Wills of grassland.

This because that means, Yeah. Right. That is why a lot of people put it off. And that’s why, it’s really important not to put it off because you really don’t know how long you have. But I have a client who, her mom died without a will. She had COPD, but she was not that sick. And she was 55 years old, and she died.

She thought she had another 20 years at least left. And so, you know, it’s not a pleasant topic, but it’s really an important topic. You you leave a big mess for the people left behind. It costs more money. And it’s harder on the family when like this daughter had they had no idea what her mom wanted done, she had no idea what her assets were.

And so it just makes it. It’s really you’re doing your family’s service by going and getting your estate plan taken care of. Yeah. So if we don’t have one, nobody uses the, what do you call it? Heroes. What’s the wills for heroes? Well, as for heroes, they can always call, they can always go to, Cynthia the Starkey, website, I’m assuming, looking up online.

So notes right in the middle of the put the website and a little plug out there. So again, thank you very much for coming on and I look forward to future episodes. And, this was a great beginning. Thank you very much for having me. I appreciate it. All right. So very, another one. No other. None.