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Dustin:             Hello, my name is Dustin MacFarlane and we're here on Talk 650 KSTE. Thanks for tuning in today. I am an elder law and estate planning attorney. I'm an accredited attorney with the VA. I was thinking, I ought to get a name for my show. That would be cool, but I don't really have a name for my show. It's just me, Dustin MacFarlane. I'm going to be joined here with Jeff Bangerter, a financial advisor.

                        We're going to talk about Social Security issues, and just money in general, and really how it pertains to seniors. That's really what it's about. Maybe I should call my show "Senior Matters." That's the website I have, and so that's what we're going to call it. We just named the show right now. It's "Senior Matters" with Dustin MacFarlane, elder law attorney and generally a nice guy. My phone number if you ever want to get ahold of me or have any questions about the stuff you hear on the show, it's 855-588-5887. I know that's a lot of "8's" and "5's." Let me do that one again: 855-588-5887.

                        I'm just going to dive right in. I'm here with Jeff Bangerter. He's a financial advisor. He's kind of everything. He's a good friend of mine. Jeff, how you doing today?

Jeff:                 Good, Dustin. Thanks for having me on again.

Dustin:             Absolutely. I know before we say anything else, you have a little poem you'd like to read us.

Jeff:                 I like that. Yes, as a registered-

Dustin:             Written by this SEC.

Jeff:                 Yeah, as a registered rep I have to give a disclosure, and for those of you that don't understand the terminology "registered rep," it means I'm a stockbroker. Let me just give-

Dustin:             Let's hear it.

Jeff:                 Investment advisory services offered through Bangerter Financial Services, Inc., a state registered investment advisor, registered representative, and securities offered through Berthel Fisher & Company Financial Services, Inc., Member FINRA/SIPC. Bangerter Financial Services, Inc. is independent of Berthel Fisher. There we go.

Dustin:             That's pretty good. I think we should hire that guy that we hear that talks super fast, that does the disclaimers on the auto commercials.

Jeff:                 That would be good. I like that.

Dustin:             We'll do it in 2 seconds.

Jeff:                 I'll work on a faster presentation of that.

Dustin:             Yeah, you keep training. We're going to talk today about some social security issues and how it pertains to seniors, and just things that should be common but aren't. I don't know about you but the more I learn about this stuff, and it really started when I was sitting in law school, I would just sit there and think, "That should be common knowledge. Oh, no, no, no, wait. That should be common knowledge." It was crucial things that affected people's lives that nobody knew.

Jeff:                 That's interesting that you say that, so have you heard of the rule of 72?

Dustin:             Yes.

Jeff:                 Most people have no idea you take the rate of return you're getting, divide it into 72. It tells you how many years it takes your money to double.

Dustin:             Say that again slowly because if nobody knows, then ...

Jeff:                 Right, and I find most people don't know, and I'm thinking, "They should teach that in school." I've always thought that. It should be a basic thing. For example-

Dustin:             Yeah, like fourth grade math.

Jeff:                 Yeah. For example, if you are earning 10% on your money, good luck with that, but if you are, it would take 7.2 years for your money to double.

Dustin:             Because it's 10%. It's 72 divided by 10 is 7.2.

Jeff:                 Yeah, and so you can do that with anything. Let's say you had your money in a CD earning .5. That would be forever before it doubles, right?

Dustin:             A hundred and fifty years. Well, 148 yea- ... Well, 40 ...

Male:               I don't know.

Jeff:                 Close enough. A long time, more than a lifetime: 2 lifetimes.

Dustin:             Just for your money to double?

Jeff:                 Yeah, versus if you could get-

Dustin:             Nothing pays .5.

Jeff:                 No, and if you could get 6% you could get it done in 12 years, so it's really rate of return matters. I know that we kind of went on a left turn, there, a little off topic, but that- ... I've always thought that too. There's just some really basic financial concepts. It's like, "Why don't they teach this in school?"

Dustin:             We out to start a class: "Basic Financial Concepts for Seniors."

Jeff:                 I like that idea.

Dustin:             We out to invite kids so they could take care of their parents.

Jeff:                 That's a good plan too.

Dustin:             We want to talk to day a little bit about Social Security, and we'll kind of venture off into the weeds and maybe talk about some other things. I'm an estate planning attorney. I focus on elder issues primarily, estate planning for seniors, so wills and trusts for seniors. You do a lot. You're a financial guy, so you're a stockbroker. You sell annuities. You're an insurance guy. You're an investment guy. You help people do rate of return math.

Jeff:                 Absolutely, and literally I'm an enrolled agent. I have all kinds of licenses but the bottom line is we look at people's financial situation and help them develop a plan because most people, I think what we see in our business, is that most of the advisors that people are using are not really advisors. They're sales people, so they're getting together and they're selling them a mutual fund, or they're selling them an annuity, or they're selling some product. Our approach is, how could we offer you a product if we don't know that it solves your problem?

Dustin:             I say this in the most heterosexual way. That's what really attracted me to want to work with you, want to refer clients to you because you weren't just the guy trying to push your product on them. Because you're licensed in so many different things and you can do so many different things, what I love is you can actually provide them what they need and not just, "That an annuity. You need an annuity, and we were just ..." Let's talk about this social security stuff, and we're going to come back to that because we have a client, a mutual client, who was given that line before she came to either one of us.

Jeff:                 Correct.

Dustin:             Before we started I mentioned another similar, and we see it all the time, so I'm sure we'll have a good little banter back and forth on that stuff. Get us started on the Social Security. We have about a minute before the commercial break, so let's just get started here.

Jeff:                 Here's the first thing. There are 567 separate ways that you can claim Social Security.

Dustin:             That's for an individual?

Jeff:                 Yeah, and so if you think about that, if you were thinking about triggering your Social Security, get starting you get a check. The best way I call it, "triggering it." How would you know what's the best way? Are you just going to go on ssa.gov, Social Security's website. They have a nice little website that says it should only take you 15 minutes to figure out the best way and get Social Security going.

Dustin:             You can't even read all the possibilities in 2 hours.

Jeff:                 Correct.

Dustin:             Five hundred ways?

Jeff:                 Yeah, so the 15 minute, yes, you can go online, and you could start [crosstalk 00:06:41]

Dustin:             Let me stop you right there. We're going to take a commercial break. I'm Dustin MacFarlane, elder law and estate planning attorney. I'm here with Jeff Bangerter, financial guru. He's visiting from the international headquarters of Bangerter Financial. We're on Talk 650 KSTE. The number: 855-588-5887. Stick around. We'll be right back ...

                        I'm back here, Dustin MacFarlane on Talk 650 KSTE. You're listening to Senior Matters. Hey, I like that. That kind of works. What do you think?

Jeff:                 I think that's really good. You should stick with that.

Dustin:             Seeing as I already have the website.

Jeff:                 Correct. You might as well have the program called that.

Dustin:             Okay, so you're listening to Senior Matters here with Dustin MacFarlane. I have Jeff Bangerter here, and we are talking about all things Social Security today, how they affect seniors or those who plan to be seniors in the not too distant future, 540-

Jeff:                 Five hundred and sixty-seven separate ways.

Dustin:             Okay, so there you go. According to the government, you should be able to make the decision in about 15 minutes.

Jeff:                 Correct. That's what it says on their website. I'm not sure how they're coming to that. That is if you don't care what your benefit really is, if you're just willing to go on and accept whatever they're willing to send you, it should take only about.

Dustin:             Agreed, agreed. Okay, so what do you have next for us?

Jeff:                 There are 2,728 rules that apply to filing your Social Security benefit, and there are over 100,000 rules that apply to those rules, so, again, it's just kind of ridiculous to think that you ... This is probably the largest monthly cash flow that most people are going to get in retirement.

Dustin:             Oh yeah. Absolutely.

Jeff:                 They're going to make a decision in 15 minutes?

Dustin:             You know what it is? First of all, it's the baseline, right? It's the starting point of most people's retirement. There might be some wealthy folks that just don't even care, but for the most part, it's the baseline. When I ask somebody how much money they earn, they start out, "My social security is ..." I don't see how you could do that, just knock it out in 15 minutes. I have a frozen pizza in the microwave that takes longer than that, and it's not even that good. 

Jeff:                 Absolutely. Talking about the wealthier people too, so I had a couple that came in and they were successful. They have over about $2.3 million. We did the Social Security planning, and we always tie it into a retirement planning complete program.

Dustin:             You know what? I'm going to start referring to myself as a millionaire, but I'm just going to say like, "I have $0.5 million. I've got about point ..."

Jeff:                 You're going to go decimals of a million. It was kind of interesting because like, as you said, so wealthy people, they can look and they can say, "Well, it doesn't really matter. It's just kind of extra money," but what's funny is wealthy people got wealthy because they paid attention to all of that.

Dustin:             That's true. I wasn't discounting. I was just saying it's not the major source of income.

Jeff:                 Correct, and so these guys are not that old. He's 52 and she's a bit older. I think she was about 58 or maybe even 60.

Dustin:             But she looked younger?

Jeff:                 She did.

Dustin:             Okay.

Jeff:                 We went through the planning. They were planning on 10 years before they retired, so he'd retire at 62, but the Social Security strategy that we came up with was a lot of deferral. He wasn't going to take his full benefit until 70, but there's some spousal options: because she's older she would trigger her Social Security first, and then he would get a benefit off of her until he turns 70. The benefit is that is Social Security grows at 8% per year. The income benefit grows at 8% per year, which is pretty good money.

Dustin:             If you don't take it it grows-

Jeff:                 Yeah. Where else are you going to get 8% on your money? From full retirement age to 70, 8% guaranteed growth by the federal government. That's a good deal.

Dustin:             You can't beat it anywhere.

Jeff:                 No, and so that's what the strategy came up with, and we went through that, and we had that built into their plan. Then we just had a conversation about, "But you guys are wealthy enough. You could retire ..." Actually they could retire right now if they wanted to, and it kind of intrigued them because he was like, "Really? I could quit my job right now?" It's like, "Yeah, you're okay," but he's making really great money too, so might as well make hay while the sun shines too.

Dustin:             That's right. This is the height of his earning level, right?

Jeff:                 He really is.

Dustin:             That's pretty cool.

Jeff:                 Here's the thing about Social Security too. Let's say you go to the Social Security office and you meet with the great folks there. They're people working hard, trying to do a job.

Dustin:             They're good civil servants.

Jeff:                 Absolutely, but the law does not allow them to make recommendations. They cannot make a recommendation to you, so the whole 15 minute online thing, you may think, "Well, okay, that's obviously a dumb thing to do, so I'm going to go in and talk to the Social Security reps." They can't tell you anything. All they can telly you is, "I can help you get whatever benefit you're ready to trigger," so if you go in at 62 or 66, or whatever-

Dustin:             So it's sort of like the ATM machine: "You just tell me what you want to do, and I'll do it, but I'm not ..." They can't render an opinion. They can't even sigh and say, "That's a bad idea." They can't do anything.

Jeff:                 Correct. It's against the law for them to do it. Then when you think about it, just think about it this way: Would you want the Social Security clerk, that's really what they are-

Dustin:             They don't have any training or education.

Jeff:                 Certainly not financial advisors. Do you want to have that clerk be your financial advisor?

Dustin:             It's almost like having the teller at the bank window be your financial advisor. You just tell them you want money. They give you money.

Jeff:                 Right, and of course they're sitting there trying to act like a financial advisor. "Hey, you should put money in a CD and earn .5, or, .25," or whatever. That's kind of the same mentality, or maybe even worse. Maybe it's like asking the DMV clerk to be your financial advisory.

Dustin:             What car you should buy.

Jeff:                 Yeah, good example.

Dustin:             To me that is, if can't get information from Social Security where do you go?

Jeff:                 That's a perfect-

Dustin:             I know this is what you do but still, how do you know? When you're looking for somebody, obviously everyone listening should just call Jeff Bangerter before noon.

Jeff:                 Absolutely.

Dustin:             Aside from that, how do you know where to even go?

Jeff:                 Think about this. Everybody has some financial advisers they work with, either a CPA, a tax preparer, an insurance agent, a stockbroker, whatever. If you have a financial advisor, any one of those, and you still don't have a written, emphasis on "written," Social Security plan, they are obviously not qualified to explain it to you.

Dustin:             I guess the next question is, why don't they do it? You tell me. You've been in this gig for a long time, right?

Jeff:                 Yeah, 36 years, so I'm 38 years old. Just kidding. I'm 42. I've been in since you were a little kid.

Dustin:             That's right. Why don't advisors give this advice? Why isn't this on the top of their list?

Jeff:                 The biggest reason is there is no money in it. If I recommend how you should take Social Security, what vested interest do I have? I have none. I don't care, really, how you take it. I don't make any money for having you take it this way or that way. We are financial planners. We're putting the plan together, and a concise Social Security strategy has to be part of a plan.

Dustin:             I'm just going to ask because we're just sitting here talking. There's a lot of guys out there and gals, people, who say, "I'm a financial planner. I'm a financial advisor. I'm a CFP," or whatever, yet I don't know anyone who makes it a standard practice to spend the time and effort to give clients what they need. Why aren't they doing- ... Just because they don't make any money? That's why they aren't doing it.

Jeff:                 Most of the people, and you actually mentioned it earlier, if they have a license, like selling annuity or whatever, if you went to a contractor and all they had was a hammer, everything would look like a nail, right?

Dustin:             Sure. That's all you can do.

Jeff:                 When you go to the CPA, he might do your taxes or tax planning, maybe, if he's a good guy, he or she, and if you go to a stockbroker they're going to sell you stocks, and bonds, and mutual funds. Yes, if you go to a financial planner, they may do a nice financial plan, but if they leave out the Social Security element, you probably shouldn't be working with them, honestly. Social Security is going to be a major income source when you retire, so if you're 55 to 70, because you need to prepare, then you should have a written Social Security plan. How could you possible make this decision that could affect you literally with over $1 million, right?

Dustin:             Over your lifetime.

Jeff:                 Over your lifetime. You're going to make this decision without a written strategy?

Dustin:             I think it would be absolutely insane. I guess that's just everyone needs to do that, and if they don't have a written plan, I'm just giving out 1 phone number. Everyone who calls can reach Jeff through this number as well. It's my office number. It's 855-588-5887. I'll say it slower: 855-588-5887. Call. Jeff, you offer ... What's it take to get that written plan?

Jeff:                 Normally we charge $300, which I think is a bargain, to do a complete Social Security analysis with the retirement analysis, so it's a full package. For people that are listening to your show I'm going to give them a deal: $150.

Dustin:             Okay, that's great.

Jeff:                 The reality of that, you think about it. We've all made really dumb decisions with $150.

Dustin:             As my dad always says, "That won't be the last $150 I waste."

Jeff:                 There you go. We think this is an extremely good value. A hundred and fifty bucks, you get a complete plan that shows you how to take Social Security and how it will actually integrate with all of your other assets, 401(k)s, IRAs, pensions, whatever you have, so that you can see that not only does the Social Security strategy make sense; it actually works for you. Just doing the Social Security strategy by itself will not tell you whether or not it's actually going to work.

Dustin:             Yeah, because I have a lot of folks come in, and I always ask them, "Who's your financial advisor?" The wife always just gets her hitchhiker thumb out and points over to her husband, and they're doing great. A lot of them have a decent nest egg built up, but then I'll ask, "Do you have a plan for Social Security?" I've never had anyone say, "I know exactly what I'm going to do," unless they say, "Oh, I just claimed it. I just took it." They never know why. They just did it.

Jeff:                 Right. Half of all Americans take it at 62, and the reason why is because they can. They're 62.

Dustin:             The government's handing out free checks.

Jeff:                 The government let's you know, "Hey you can get a check," and half of the people in the United States just go, "Yeah, send me the money."

Dustin:             Which doesn't totally make sense if you're still working, if you don't need it yet.

Jeff:                 Right. If you're still working you're going to get basically $1 back for every $2 you get if you make over $15,000, roughly. They change that a little bit every year, but the bottom line is, why would you do that unless it makes sense? Or if you [crosstalk 00:20:08] strategy.

Dustin:             Or, again, just absolutely need. If you absolutely need it that's 1 thing. We're not talking about that.

Jeff:                 Right, because even if you give half of it back, you still got the other half, so it still would make sense.

Dustin:             All right, I understand.

Jeff:                 I think that you sort of led into something, and I think that it's really important is when you think about it, and I'm sure you can appreciate this because you work with seniors. As do I. I know a lot of 55-year-olds don't want to say they're seniors.

Dustin:             At Taco Bell you get senior drink at 55. You're a senior.

Jeff:                 Okay. Perfect. Here's the thing. The #1 concern of seniors, I think you'll agree with this, is running out of money.

Dustin:             Absolutely, and you know what's interesting is it doesn't matter how much money they have, that's still they're concern, is running out of money.

Jeff:                 Right, and so here's the real kind of the crux of the issue is: it doesn't matter how much lump-sum money you have; it matters how much income you have because that's how we all live is on a monthly income.

Dustin:             I'm going to jump in right here. We're going to take a quick commercial break. I'm Dustin MacFarlane, elder law and estate planning attorney. You're listening to Senior Matters. Hey, I still like it. It's kind of catchy. I'm here with Jeff Bangerter, financial advisor extraordinaire. He flew in on a Learjet this morning.

Jeff:                 I wish.

Dustin:             You're listening to Talk 650 KSTE. The number: 855-588-5887. That's 855-588-5887. Stick around. We'll be right back ... We're back. I'm Dustin MacFarlane here. We're on Talk 650 KSTE. You're listening to Senior Matters, and I'm here with Jeff Bangerter, financial guide, financial know-everything guide.

Jeff:                 Know-it-all? That doesn't [crosstalk 00:23:25]

Dustin:             No, no, no, no, but really, during the break we were talking about the importance of having somebody who can not only run the number, and that's a, I don't know, kind of a dumb thing to say but a lot of people don't have the full picture. They just have like these, "Well, according to our data our product should return this amount of money," and it's like, what else is out there?

Jeff:                 Part of the thing, and we were talking about, so you have a client who thought should actually get a plan but she's resisting.

Dustin:             Yeah. She should. She's widowed. She's 62 years old. She has 3 rentals that make almost zero money at the end of the month. They make rent but by the time she pays the mortgage and expenses, there's zero, break even. Then she has an IRA with $400,000 in it, which sounds like a lot, but she's sucking out $5,000 a month to live on, paying tax on, what, 25% of that. If you put a pencil to it, she does not have enough money to live for life expectancy. She will run out of money.

Jeff:                 Right. Part of the thing is, and we meet with people all the time, we brought on some new clients recently, and they had a local advisor that-

Dustin:             Oh yeah, that's what this lady said: "Oh, I have a guy." I'm like, "Well, your guy isn't doing his job. He needs to tell you to stop spending money or get a better plan."

Jeff:                 Right. We actually met with somebody today, I was mentioning too. They don't have a lot. They have $70,000, which, to retire on, is not a lot, but we have people that are in that situation. We still help. It's our job. They're spending $2,000 more per month than what they bring in. That's a problem. They're going to run out of money in like 5 years, and so when I show them that, and of course the husband is blaming it all on the wife, "She just keeps spending too much." I'm like, "You guys got to get control here because otherwise you have a real problem."

                        The other folks that I met with, again, their advisor was telling them, "Oh, no, we've got x amount of cash flow and coming, everything." We ran the numbers. It's like, "You're not going to make it. All they had to see was the numbers and they went, "We get that," and so they reduced their spending per month.

Dustin:             Because there's 2 options. You either earn more or spend less. That's it. When you're in that cat- ... If you're done working, if you're out of the workforce, other than a Walmart greeter, there's not a lot of earn more type of options for you.

Jeff:                 Right, and do you even want to if you don't have to? You want to not have to go to that. You want to go golf or to do whatever else you want to do, garden, or whatever.

Dustin:             Sure, and the big question, you mentioned it earlier, is people's big fear is running out of money. I would add to that, the other huge desire people have is they want to stay at home. They want to live their life through the rest of their life and never have to leave. What's the one thing that allows that to happen?

Jeff:                 It's cash flow. It's income.

Dustin:             Yeah. I used to say you got to have a pile of money. Now I don't agree wi- ... I think I was wrong. I think you have to have monthly revenue.

Jeff:                 That's really the secret, and when you think about it, some of this is really basic, and people might go, "Well, no kidding," but if you spend-

Dustin:             It's one of those, it should be common knowledge.

Jeff:                 Yeah. If you spend less than what you bring in then you're going to be okay. The problem, of course, is then if you start to need help. If your health starts to deteriorate, if you don't have a situation that's set up to handle it, then you end up in a long-term care facility.

Dustin:             No joke. Last week someone sat in my office and they are spending $12,000 a month on care for 1 of their parents so he can stay at home, but the magic is they've created a financial plan over the last 30 years that gives them that cash flow.

Jeff:                 Right, and that's really the secret. There are unique products out there now that will give you more cash flow if you need care, and, again, you don't have to go into a facility.

Dustin:             That has to be part of the plan is that health care kind of kicker at the end.

Jeff:                 Right. I'll give you a couple of things real quick. When we do the full plan, Social Security is obviously the start, but then we plug it into this retirement analysis program that we do. We look at 2 other issues. One is, "What if one of you die?" It's not a "What if?" It's a "When?"

Dustin:             It will happen.

Jeff:                 It's a "When?" and so we look at that, and then we ... "Because what's going to happen? When one of you die one of the Social Security checks is going away. The smaller of the 2 goes away and you get to keep the larger." Let's say maybe their wife is making $2,000 a month. The husband gets $2,500 a month. "When one dies, you are losing $2,000 a month. How is that going to impact you?"

Dustin:             That's huge.

Jeff:                 Right, it's a major [crosstalk 00:28:20]

Dustin:             Because if you have a mortgage, that doesn't go away. Utility bills don't go away. Insurance doesn't go away.

Jeff:                 You eat a little less. That's the only thing that goes down.

Dustin:             Yeah, and not a lot less, not $2,000.

Jeff:                 No, and us guys typically go first. "Hey, our wives, we don't eat that much." You do have to plan. That's part of our plan. We want you to see that so that you can go, "Okay, we need a plan for when one of us dies first. It's very unlikely you will both die at the same time. That's just statistically an anomaly.

Dustin:             It's rare. Even though all young couples are worried about that when come see me, but really, it just doesn't happen.

Jeff:                 No. On goes; the other sticks around for awhile. The other issue is the long-term care, just like what we were talking about. We show that too. What happens if you go in? Right now in California the average cost for long-term care is a little over $8,000 a month.

Dustin:             For a skilled nursing facility that's right.

Jeff:                 Yeah. Let's say you're 60 years old. By the time you reach 80, when you actually might need long-term care, it's going to be like $19,000 a month, so catch that grip, right? [crosstalk 00:29:30]. That's 4.3% inflation on long-term care, so it does go up every year. You've got to be prepared for that. What's going to happen? What's your income source? Like these folks you mentioned, they planned for 30 years so that they have a plan that works.

Dustin:             I would say that sitting down with you and talking about that plan, I don't care if you're 40 or if you're 70, you've got to put something in place because I know you can't guarantee it but you can put a plan in place so that they can stay at home. That's what everyone wants. I always say it on the radio: "My dad's plan is to go out of the house feet first."

Jeff:                 I like that, and I would say that is 100% of the people. Nobody wants to go into a facility.

Dustin:             Nobody. I've never had someone come in and tell me, "I'd really like to go to a senior care facility, maybe tile floors and a lot of nurses and beeps, beeping noises all day long."

Jeff:                 Yeah, sharing a room with 1 or 2 other people.

Dustin:             Yeah, yeah, exact- ... It happens. It happens to a lot of Californians every year, but it's nobody's plan. That's kind of like the last ditch effort to try to take care of somebody, but we can, I wouldn't say guarantee. I can put together a place or a plan that you get to stay home.

Jeff:                 Absolutely. Everybody has I think personal experiences. I'm in the industry, and it's so funny because when you deal with family members, especially parent, there's always this, "Well, you're still a kid." My father-in-law was a retired Air Force pilot, smart guy. Then he was corporate pilot for a while. I mean, this is a smart guy, but he felt, he thought, that the Air Force would take care of him.

Dustin:             Oh gosh.

Jeff:                 There is Yountville. You can go over. There's an old soldiers home over there.

Dustin:             Which is tough to get into, and it's no different as far as the payment sources.

Jeff:                 Right. The issue was he kept thinking, "No, I'm covered. I'm covered," and then finally in one of the Air Force magazines or something, his wife read that, "No, you are not covered. You better get long-term care insurance." It was too late. He had Alzheimer's, couldn't get coverage, and ended up in a nursing home for about 1.5 years or so with really bad dementia, and finally fell, and broke his neck, and died, which was a blessing, but so his wife was having to-

Dustin:             I'm going to jump in right there, and we're going to finish that story. We're going to take a quick commercial break. I'm Dustin MacFarlane with Jeff Bangerter, and the phone number you can get ahold of us is 855-588-5887. That's 855-588-5887. Stick around. We'll be right back ...

                        We're back with our last segment here. I'm Dustin MacFarlane, elder law and estate planning attorney. I'm here with Jeff Bangerter. My phone number is 855-588-5887. If you like what you heard or even if you don't, give us a call and tell us why. No, give us a call. If you'd like to talk to Jeff just leave the message on my voice mail and I will get that message right over to Jeff. Again, 855-588-5887 is the number. I wish we could record the breaks because we-

Jeff:                 We got a lot of better information, yeah, sometimes.

Dustin:             You guys should be here. It's actually a better show during the breaks than it ...

Jeff:                 I really like, you know, we were talking about my father-in-law, and he really didn't prepare. Smart guy; didn't prepare.

Dustin:             Or just thought that the system would take care of him. There was something out there, and it just didn't exist. It was a ghost.

Jeff:                 No, they ended up spending a lot of money, which it really comes back to what we were talking about: how you help people prepare, the idea of, "Prepare for the worst case but try to stay home."

Dustin:             Right. To me it's kind of like ... I don't know the analogy is, maybe wearing a seat belt but driving safely. It's not like you're going to drive like a crazy person because you have a seat belt on. The legal documents that I prepare for seniors, the estate planning documents, we plan as though you're going to live for 5 years in a nursing home. We're okay with that. That's a worst-case scenario and if that happens to occur because medically it has to, or financially it has to, we're okay, but we're going to do everything in our power to keep you at home.

                        That's where I need guys like Jeff. That's why I think working with Jeff is so great. You actually have, I won't even ... A plan, but really a working, tactical strategy to manage all the assets with 1 goal in mind, and that's monthly income.

Jeff:                 Right. It's so interesting that you come with that approach too because when we do the plan that's what we're doing too is we're looking at here's a worst-case scenario: 4 or 5 years in a long-term care facility. If you can stay at home, we generate the income sources so that you can pay somebody to help you at home, and there's a lot of different resources available, which together, we can help. With your disciplines and my disciplines, we can help somebody have a complete strategy, so that they can get every resource available to them.

                        I always liken it to like tax planning. I don't recommend anybody cheat. I don't cheat on my taxes but I take every deduction available. If you know the rules that exist, you can do better than if you don't know the rules.

Dustin:             Oddly, I went on this big vacation a couple weeks ago. I sat on the beach for 12 days and did nothing but looked at the water and listened to the waves crash against the rocks, and I was reading all of these books. You might think I'd be reading law or whatever. I was reading these stories of these military guys in Iraq, all these Navy SEALs, and Green Berets, and whatever, and one thing that was a common thread through all of them is they're tactical planning.

                        They would plan for days or weeks to pull off a 5-hour mission in the middle of the night, somewhere in the hell of Afghanistan or Iraq, but what's interesting is they took a long time to plan for a short operation. I think that's kind of what we're talking about. Sometimes it takes months or years to put this plan in place so that we can plan for the last 2 years of your life. It's a relatively short time in the whole scheme of your life, but if you just kind of wake up one day and say, "Hey, you know what? I've got Alzheimer's. I've got no money in the bank. I have no family. I have no assets. I have no income. I'm going out to Yountville."

Jeff:                 Yeah, that's not the right solution.

Dustin:             It's not happening.

Jeff:                 I really like how you've kind of framed that because one of the things that we talked to our clients about is, so we do this plan when we first get together and they become our clients. Is that it? It's one and done. You never have to worry about it again?

Dustin:             Oh, heavens no.

Jeff:                 No, it's every year.

Dustin:             At minimum.

Jeff:                 Yeah, we meet with our clients more often, but the plan itself, we have to review that every year because, "What happened in your life? What has changed? What did your investments do? What is going on?" So we-

Dustin:             Did you get married, and divorce, and buy a house, and get fired, get a new job, inherit. 

Jeff:                 Right. Somebody passed away.

Dustin:             There's so many things.

Jeff:                 Right, so the "one and done," even if you do have a plan, an actual written plan, which very few people do, but if you do, when was the last time you updated it? If you have a living trust, when was the last time you updated that?

Dustin:             That is a really common thing. People think it's a transactional trust. You just go in, pay the lawyer and that's good. If you're only concerned about avoiding probate, first I think you've missed the mark. I think you're kind of ... What's the phrase? You're stepping over dollars to pick up pennies?

Jeff:                 Yeah.

Dustin:             But it's a living trust. It actually lives with you. It changes when you change, and you should update it every 3 to 5 years, even if it's just a once-over so that everything is fresh, and current, and new, and you're heirs don't have a 25-year-old document where everything is outdated, and people are dead, and it's just a problem.

Jeff:                 That's one of the questions we ask in our plan. "When was the last time you updated your will or trust?" Of course we're really anti-will. We need a trust, but, again, some people still are caught up in, "Hey, I have a will." Certainly you're the attorney and we refer those folks back to you, but knowing what I know, people need to meet with you if they don't have a trust.

Dustin:             Yeah, and fairly regular. In fact, I learned something that I thought, "You know, this needs to be in everybody's trust." I don't know about you but I'm sure this happens, where you learn something new and you thing, "You know, I'm going to change the way I do business. I'm going to change the product, or the system," or the something.

                        Just recently I learned something. I thought, "That should be in every trust from now on, and that should have been in every trust we did, the last 100 trusts we did," so we just did a mailing to all of our clients who had revocable living trusts, and said, "Sign this and put it in your trust binder, and it's going to be an amendment to your trust because we think it makes your trust better."

                        I think on a regular basis you should update it, and if it's me just telling you, I didn't charge anyone for that. It just had to happen. I thought it was the right thing to do to make their trust a better trust.

Jeff:                 Absolutely, and our world does change every day. Also, products, and solutions, and everything change.

Dustin:             We have a couple minutes left. We have about 5 minutes left. We want to talk about annuities for a little bit. I think this was spurred by a mutual client that we have, and wonderful person. This client, and I won't give any information other than she was injured and she was blessed with a small award in some litigation, and so she got a couple million dollars.

Jeff:                 I was going to say "small" is a relative term. A couple million.

Dustin:             I was comparing her to George [Steinbrenner 00:41:11].

Jeff:                 There you go. Okay.

Dustin:             She's now sitting on a couple of million dollars but the problem that I saw instantly, and she came to me after the fact, unfortunately, is the attorney shoved her right into a structured settlement guy who sold her a 20-year annuity. He took $1.5 million of her $2 million award and he locked it up for 20 years with almost zero rate of return.

Jeff:                 Right now when you think about it, an annuity, when you just think about a fixed annuity, which is what they're really talking about, it's an income annuity, interest rates are ridiculously low.

Dustin:             Which is great if you're borrowing money.

Jeff:                 Yes, but an insurance company, just like anybody else, they can't pay you more than what they can generate, and so if you're locking up your money in a fixed annuity right now, you are locking in at the lowest rates in history. That is the craziest thing in the world to do.

Dustin:             This was like 70% of her award. She just locked it up. She's young. She's not 65 yet. She's not even 62 yet, and so in her early 80s that will be completely paid out. She should live older than that.

Jeff:                 Right, and it'll be gone, so $1.5 million gone. Now you're still alive. What did you do with the rest? We see that. I've seen that actual happen before, and I think what happens is, whether the attorney is licensed or they're passing it off to somebody that's generating a huge commission.

Dustin:             It's got to be $100,000 commission.

Jeff:                 Absolutely, so it's just really kind of a ridiculous thing to do.

Dustin:             She was mad because it wasn't disclosed, and she didn't know.

Jeff:                 Right. All of that needs to be talked about. I've seen that exact thing happen, and that's why there's companies. I guess I shouldn't do an advertisement for one of them, but that are telling you, "Hey, if you have a structured settlement give us a call and we'll cash you out."

Dustin:             We'll buy it out.

Jeff:                 But you're cashing out at a discounted rate, so if you got $1.5 million and you unfortunately put it in this structured settlement, you might get a million.

Dustin:             To bring this down, because not everyone has $1.5 million in an annuity, but we, and I'll include myself top of the list here, the commoners, the great unwashed, we have a little bit of money we want to put away for the future, maybe generate a little bit of income and so we put it in ... An annuity, it locks it up, and right now they might not be the best-

Jeff:                 Part of the thing is an annuity is a really wide term.

Dustin:             Okay, fair enough.

Jeff:                 What happens is a fixed annuity is essentially, I got to really tread lightly on what I call it, but it's basically a fixed interest rate product through an insurance company, and they're long-term. You are tying up your money into the very lowest interest rates in history, so a fixed doesn't make sense. Then you've got the other side. You've got the variable products, where you're in the stock market. Those are really expensive, generally. You're probably paying 2% or 3% in fees just to own the dang thing.

Dustin:             I'm just going to say, because we have 1 minute left, and we're just going to wrap it up here, but first, thank you very much for coming. I've had a great time. Hopefully our listeners have maybe laughed a little, maybe been disgusted a little.

Jeff:                 But learned 1 or 2 things.

Dustin:             Maybe they even learned 1 or 2 things. First of all, if you want to get ahold of either me or Jeff, the number: 855-588-5887. I also just ... I lost my train of thought. Not only do I appreciate you coming in, I appreciate what you've brought to us because this is just not stuff that I could do on my own. I don't have expertise in this.

                        If you are approaching retirement age, if you're talking to a financial guide about an annuity, give Jeff a call. Leave a voice mail on my system, and I forward that right over to Jeff. He gets your voice mail. Again, 855-588-5887. If you want to Google him, it's Jeff Bangerter. If you can't spell "Bangerter" just call my number and I'll tell you how to spell it.

Jeff:                 Good luck with that.

Dustin:             We have about 8 seconds left. Thank you very much.

Jeff:                 Thank you for having me.

Dustin:             I'm Dustin MacFarlane. We're on Talk 650 KSTE. Again, 855-588-5887. See you next Saturday. Bye-bye.