Hi, and welcome to Money Masters.

I'm Amber Renee Dixon.

Before we get started, I want to let you know the purpose of this new program.

Money Masters is meant to educate and inform you about "life planning," a term that you're going to hear a lot of today.

Life planning is how an individual, a couple and/or a family takes steps to be financially prepared at each stage of life.

When it comes to finances, there is no "one size fits all," and everyone's situation is different.

For this reason we have gathered together a panel of local professionals in their field.

We will discuss typical scenarios and options on how to protect, manage and grow your wealth.

This is meant to inform and educate about the right questions to ask about your own life planning.

Let's get started.

♪♪♪ Let's introduce you to our Money Masters, all local professionals from right here in Southern Nevada.

Jason Oshins is a wealth management advisor with WestPac Wealth Partners.

Next is Kim Walker, a certified public accountant with Kim Walker Inc., and Rob Bolick, an estate planning and asset protection attorney with Robert L. Bolick Limited.

Thank you all for being here today.

Let's jump right into this topic of life planning, what it means to each of you, and first tell me a little bit about what you do.

Jason, I'll have you start.

(Jason Oshins) Sure.

When I think about wealth planning, it's exactly as it sounds.

It's planning for the entirety of life, so you think about the three different phases.

The first is accumulating wealth, so working, saving, creating net worth.

The second is distributing that net worth and converting the net worth into cash flow, and then the third is the legacy component, so getting what you have to the organizations and to the people who matter to you.

(Kim Walker) From a perspective of life planning and tax planning, I also find that about every 10 years, people's lives change dramatically.

They start out young, single, working.

In their 30s they're generally married and starting a family, and the issues that come with each decade are different.

Whereas they might learn the tax laws in their 20s that pertain to them, we have to stay with them throughout their life because the issues they need to know about are going to be different in their 30s than they were in their 20s, and we want to make sure as they make decisions, they are also taking into consideration how that affects their tax bill in April when they file their returns.

(Rob Bolick) So as an estate planning attorney, asset protection attorney, my job is to assist clients into getting the correct documents in place to make sure that whatever happens to them during their life-- and things do change drastically over various different decades-- to make sure that everything is in order so no matter what happens, and the world is definitely an imperfect place, life is what happens while you're making other plans.

It's just those things happen to you, and you got to plan for all of the different eventualities.

So for the young married couple, the main concern they would have would be like guardians for the kids, making sure their planning is in place.

If something were to happen to them, make sure the kids are taken care of, properly cared for, and you want to make sure they don't get too much too soon.

And then later in life as they start accumulating things, to make sure that whatever they have acquired that they are able to keep it for themselves.

Nevada has some excellent asset protection vehicles that enable you to essentially have the best of both, have your cake and eat it too, where you can keep your assets.

You control, you manage, you distribute, do whatever you want to from your own pile of assets that you have, your net worth, and hold in such a way so creditors, claimants and others cannot separate you from your assets.

And then finally the last part of life planning would be to make sure your legacy is passed down to your beneficiaries in such a way that it will help them and not hurt them.

-I think we are off to a good start here, so now let's talk about best practices.

We spoke with people in the community to learn about where they are in their own life planning, and from these conversations we developed some scenarios that we hope our viewers can relate to.

Let's take a look.

♪♪♪ Here's a couple in their mid 20s who have recently graduated from college and are starting a life together, both with new jobs.

Currently they rent and plan on buying a home.

Children are definitely in their future.

They ideally see their life as working, raising a family, then retiring to travel the world.

In retirement they want their assets and investments to work for them, and then finally hand off their estate to their children and some select charities.

All right.

So they are college educated, they're off to a good start and thinking about retirement, but some of those goals sound somewhat lofty.

How actionable are they?

What do they need to be thinking about to really make those dreams come true?

-So I think there are certain basic questions.

One would be how much liquidity should they have?

How much should they be saving?

Where should the savings go, recognizing at some point they want to access it?

How much insurance, how much disability insurance, what type of estate planning documents, and I think it's really important that they start building a team of professionals, including an estate planning attorney, a CPA and a financial advisor who can help them coordinate everything and make sure that they're balanced.

-When people are in their 20s, starting out their careers, they typically will have some of the same questions.

If they're newly married, should they file jointly or separately?

They also want to know what is tax deductible?

Then they want to know what kind of receipts they should keep in case they get audited by the IRS.

One of the challenges for the newly employed is they typically will have expenses.

They might need a new car, they'll probably need work supplies and maybe a professional wardrobe.

They're tempted, because of those expenditures, to pull back on their withholding from their paychecks in order to give them a higher monthly cash flow.

The problem is that in April when they file their tax returns, they're then going to owe money, and it's very difficult to come up with 1-, 2- or $3,000 right then and there to pay the taxes.

What we like to address with them when they're at that point is number one, let's change your withholding for the current year so you're not on a treadmill with that tax shortage.

Secondly, it's a fabulous time to look at putting a budget into place and implementing it into their lives.

And then the next thing is if they can't pay the total amount due, the IRS does have payment plan options, and we like to take a look at that to give them some relief going forward.

Finally with the younger clients, they're facing crypto issues, which is very brand new.

What a lot of them don't know is every time you buy something using cryptocurrency, that is a reportable transaction on your tax return.

We have a lot of education to do with our 20-year-olds.

While I do plan for their retirement, for me it's more important that we give them basic education on how to manage their tax strategy because we don't want them to end up in a tax pickle going forward.

The IRS can be a daunting enemy.

-On the legal side of things, it's important for a young couple starting out, you mentioned looking forward to having children.

I assume that would be an asset rather than a liability, but maybe some of each on the children part.

One of the most important things they have is they want to make sure that children are taken care of, so if you have wills, you can nominate who a guardian would be, who is going to have custody of them, raise them.

You want to choose someone that has the same morals, values and lifestyle that you would like your children to be raised in.

If you happen to pass away without a will with some minor children, what's going to happen is the court would then appoint a guardian, and it may or may not be the person you've selected that you want to raise your kids.

The other thing is if you don't do that, if you haven't planned what you're going to do with the appropriate legal documents, whatever you have of your assets, frequently life insurance is going to be one of the larger cash bequests then, the kids are going to get it on their 18th birthday which is generally not a good idea.

The average inheritance is gone within 18 months, and for an 18-year-old, it might be on a three- or four-month.

So there are things you can do to have it continue in trust for their benefit with somebody looking over the financial part for the kids, and you don't need the same people.

So you can have somebody who's good with the kids to be the guardian and somebody else who's good with money handle the finances, and they work together for the benefit of the children.

So that's something a younger family that hasn't accumulated too much, they do have the children, their most valuable asset, you know, that they want to protect.

-We don't get training on this growing up.

-We don't get training.

-Yes, there's this big gap between what we learn in school and suddenly we're in the workforce and we're left to our own devices, so I think it's critical to surround yourself with this team and also to have discipline, and it's not human nature.

There are some really strong behavioral components where we don't necessarily do what's in our best interests, so I think when clients have some structure and they realize there are different components fit to make this cohesive whole, they're putting themselves in a considerably better position.

-I think you hit on that with the discipline.

That is not a word that 20-year-olds like to hear, okay?

You want to have the structure, you want to have the discipline, you want to pay yourself first, you want to make sure you have something set aside.

The sooner you start your financial planning the better it's going to be in the long run, and if you can establish those habits and patterns early on, that can-- you know, when you have a little bit, that'll see through to when you have a lot more and you'll be infinitely better off.

-The other thing is it is difficult though sometimes to ask for help, right?

We all want to be independent, and it's hard to go to a professional and say I just don't know what I have here, and I don't know what to do.

And when you look at the tax code, which is huge, how do you learn that coming out of school, being trained as an architect?

You do need to consult and to reach out to the professionals in your community, if for no other reason than to have a sounding board and to receive the education that you need in order to make proper decisions for your family.

-Basically, you don't know what you don't know.

-You don't know what you don't know.

-And it's important to talk to others who may know something that you don't.

-All right.

Well, thank you all for your input on that scenario, and we have another scenario to move on to.

Let's take a look at that.

♪♪♪ In this scenario we have a couple in their early 50s.

They have two children, one in college and the second in high school.

This couple wants to retire before 70.

Between savings, investments and insurance policies, they feel like they're set for a comfortable retirement.

For them, the question is how to structure the use of their funds and assets when they start their retirement and knowing the potential risks involved.

♪♪♪ So early 50s, they want to retire before 70, that gives them less than 20 years.

How common is this situation, and how do they go about structuring their finances to achieve this goal?

-Well, I think it's critical to recognize that so much emphasis in our industry is on that first phase, accumulating wealth, without necessarily regarding the importance of having a distribution strategy, and fundamentally the rules change when you transition from accumulation to distribution.

It goes from "what if I die too early" to "I have no idea how long I'm going to live, "and what if I run out of money "during this unknown duration of time?"

Issues such as healthcare can be really expensive.

You have issues like inflation, which is insidious, and it means you have less purchasing power every single year.

Taxes increase and you're on a fixed income, it means you have less money to spend.

The market, while you're working the volatility is actually your friend because that's where you get the returns.

But during your retirement, if you're withdrawing money and you don't have a strategy and that's where you have to go to provide income and cash flow, if you don't have a strategy, then when you're withdrawing money and the market is down, you're effectively locking in those losses.

-I will tell you my clients in this age bracket will typically expand their portfolios to include real estate investment.

They might be a partner in a large commercial property or they might choose to just buy a residential property that they can either rent out or they can let one of their children live in.

Real estate brings with it a whole new set of tax laws that need to be learned.

In addition to that, when it comes time to sell that real estate, you have options.

You might want the buyer to cash you out, or you might want to exchange that piece of property for another piece of property to defer the taxes.

Or thirdly, you might carry back a note from the buyer to give you some continued monthly cash flow from that property.

Another situation that I find common for my clients, they tend to be sandwiched when they're in their 50s between their kids who are finishing college and trying to launch their own lives and their parents who might require some financial assistance and planning help.

With the parents it's possible they will assist them financially by moving them into a senior living environment or bring them home to live with the family.

In some cases they can look at taking their parents as a dependent, depending on the situation individually.

Then we have gifting issues that come into play when the parents gift money to them, when they gift money to their 20-year-olds to help them purchase a home, how does that affect their tax structure?

And we also have inheritance that we need to start looking at.

When they inherit assets from their parents, how does that affect their tax structure or their financial plans moving forward?

-From the legal standpoint, this is where the fun begins.

There are so many things that can be done here.

Just to touch on one thing, a lot of people are in a second marriage.

They have children from prior marriages, and one of the main concerns is how do I make sure my spouse is okay and not cut out the children or make sure that both sides are taken care of and so forth and so on.

So there's a lot of issues that it's important to sit down and have your estate plan structured in such a way that you have all the eventualities taken care of.

You don't know who's going to die in what order and what the needs are going to be, so careful planning can certainly help all of those things.

The other component which I touched on briefly before was that Nevada has some very strong asset protection vehicles that allow you to create an entity, a Nevada asset protection trust, wherein you can put your property in there and you control it, mom and dad are the trustees, they're the beneficiaries.

You can have your estate planning incorporated in that.

Under Nevada law, it takes a couple years before the cement hardens and once that happens, you can make sure that whatever you have acquired to this point in your life is yours throughout the duration.

Again, as it's been said that life begins at 50, not for financial purposes.

Hopefully you have acquired it by then.

You don't want to get cleaned out and have to start over.

There are ways to protect yourself from that.

And then finally down to the next generation, Kim, as you mentioned, you have not only what you have accumulated but a lot of times you will receive an inheritance from parents, and you want to make sure that's protected, that's taken care of, that you have the right structure to have it go down to your kids in such a way that it will benefit them, not hurt them.

You can structure your plan, your estate planning, in such a way that they can use it for their benefit, but they can't use it to blow it all on whatever they're going to blow it on.

So there's a lot of things that can be done in making sure that your estate is protected, that you can do whatever your goals are and making sure that your wishes are carried out.

-And the hope here is a comfortable retirement after years of hard work and dedication can be within one's reach; however, it can get complex.

Here is another scenario.

♪♪♪ Now, here's a couple in their early 70s.

They're recently retired and lead an active lifestyle.

There are some underlying medical issues but nothing too serious.

They have access to a healthy savings account, investments, social security and a pension.

They own their home, have two grown children and five grandchildren.

They worked hard their whole life and planned for the future.

Now they want to check off some boxes by addressing their legacy and make sure their estate is prepared at their time of passing.

♪♪♪ This scenario centers on the final stages of life planning.

Let's talk about that now.

Jason, the final stages, what's most urgent to you in those final stages?

-Well, we discussed some of the risks.

They become that much more likely to occur, so the longer somebody is alive, the more likely they are to be impacted by the market, by taxes, by inflation and then by other issues like long-term care or health concerns.

So it's that much more critical that they have addressed those while they're still able to do so, and then that frees up the space so they can think about the legacy both qualitatively and quantitatively in terms of what they want to leave behind to the people who matter to them and to the organizations.

-What I find is one of the biggest issues for my clients in this age bracket is when to take their social security.

Do they take it at age 62, do they wait until they're age 66-1/2, or do they wait all the way until they're 70?

If they take social security at age 62 and they're still working, they might find they have to repay that social security because they've earned too much, and social security does a take-back.

If you wait until you're age 66-1/2, you can work full time after that and not have to worry about repaying any of the social security.

The question is also between 66-1/2 and 70, if you don't take social security benefits, they grow quite substantially.

Meaning that if you wait all the way until 70, your monthly benefit is going to be much more.

People always wonder, but I missed those four years of income; that's true.

The break-even point is about age 82, meaning that if you live at least until age 82, you are better off waiting until age 70 to take your social security.

It's an individual decision.

You want to look at your general health and longevity in your family to decide, do I think I'm going to beat those odds?

Another question is the IRA and the pension become mandatory distributions at age 72.

That means you must start taking minimum distributions every year once you reach age 72.

Sometimes my clients might not need that money in order to fund their lifestyle.

What they have an option of doing from a tax planning point of view is donating that minimum distribution amount directly from their brokerage account, or whoever houses that financial money, to a charity.

Where typically your minimum distribution is going to be taxable income, when you choose to donate it directly to a charity, it becomes non-taxable and if you don't need the money and if you're going to donate to that charity anyway, it's a final hurrah to the IRS, right?

You can not pay them one last time in your life and legally get away with it, I say, and give to charity.

-Yes.

On the legal side, there are several things.

One is if you haven't done your estate planning by now, this is a really good time, you know, to get it.

There's only so many more shopping days till Christmas, so to speak.

So you want to get your documents in place.

The two main options are wills or trusts.

What most people don't realize is a will equals probate, namely going to court.

A lot of people think I have a will, therefore I avoid probate.

I tell my clients no, you consider a will to be a formal invitation to your heirs to go to court, okay?

Going to court is good for attorneys, not so good for the beneficiaries.

So how you avoid probate is you can set up a trust, a living trust, we've talked about that, which is basically a super-size will to make sure your assets go to the beneficiaries that you want under the conditions that you want.

A lot of people have in this case they've got five grandkids.

They tend to say well, I'm going to skip over the kids and have it go to the grandkids.

Typically that's not as good as it sounds.

Most people end up changing their minds and reversing it.

The other thing that's important to keep in mind are powers of attorney.

So a durable power of attorney means one that will survive the principal, the person's incapacity, and the fact that mom and dad are married doesn't automatically give them the right to make financial decisions, or more importantly at this point, medical decisions.

Under HIPAA laws you got to have that piece of paper in place to be able to access records, to be able to have the input, talk to the doctors, decide do I go this treatment or that, so it's good to have those things in place obviously before you have the need.

Nevada also has a very progressive-thinking procedure for this.

They have a lockbox with a secure site with the Secretary of State that you can upload your medical power of attorney there.

You'll be issued a little card that has your access information.

Any doctor or hospital medical personnel can be able to see what you have done with your medical power of attorney which is not only during your life but it also has end of life, what used to be a living will, conditions of when do I want to have life support withdrawn, under what terms and conditions.

You can lay all of this out, and what that does is it also takes a big emotional burden off of the kids who don't want to be responsible for pulling the plug on mom or dad.

But if they're just following their wishes, then it's much better on everybody.

So they get to say what they want, and the kids don't feel guilty.

So at this point in life, there's a lot of things that can be done if you haven't done it before to make sure that whatever the transition, it works out as smoothly as possible.

-Very important information for our viewers.

Thank you all for sharing that information with our viewers, and I want to thank you out there for tuning in.

Remember you can find this broadcast and more on vegaspbs.org/moneymasters.

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