“You can’t control when it’s going to happen, but you can control what your loved ones are going to have to go through.”
Facing our own mortality isn’t easy, but it’s one of the most important conversations we can have for the sake of those we love. In this episode, I sit down with Pamela Maass Garrett, an award-winning estate planning attorney and CEO of Law Mother LLC, to unravel the mysteries of estate planning. We dive deep into why everyone—not just the wealthy—needs a will or trust, especially if you have kids or digital assets that need protection.
This isn’t just about money; it’s about ensuring peace of mind and safeguarding your legacy.
Key takeaways:
- Estate planning is essential for all: No matter your net worth, having an estate plan ensures your wishes are honored and your loved ones are protected.
- Assign legal guardianship: If you have children, it’s crucial to legally designate who will care for them to avoid court battles and uncertainty.
- Don’t overlook digital assets: Include your online presence, cryptocurrencies, and digital files in your estate plan to secure your full legacy.
- Open communication prevents conflict: Discussing your estate plan with loved ones now can prevent confusion and disputes later.
- Professional guidance matters: An experienced estate attorney can tailor a plan to your unique situation, saving time and avoiding costly mistakes.
Notable quotes
“I think a lot of the discomfort around death comes from us not being able to control it. It’s a scary thing because it’s completely uncontrollable.”
“Estate planning allows you to have some control around your death. While you can’t control when it’s going to happen, you can control what your loved ones are going to have to go through.”
“I saw crimes or car accidents and I saw kids end up in foster care. I saw families end up in these lengthy probate court battles and I started to ask those questions, why is this and what can we do? And that’s what first got me very interested in estate planning and helping people really protect the people they love.”
Episode at-a-glance
≫ 00:00 Introduction to Estate Planning
≫ 01:43 The Importance of Estate Planning
≫ 05:17 Pamela’s First Money Memory
≫ 13:04 The Difference Between Wills and Trusts
≫ 21:21 Misconceptions About Spousal Authority
≫ 24:09 Understanding Legal Guardianship and Economic Support
≫ 26:19 Guidance and Asset Protection
≫ 27:27 Communicating Your Legacy
≫ 28:34 Dealing with Debt and Life Insurance
≫ 33:06 Choosing the Right Estate Planning Approach
≫ 38:49 Digital Assets and Final Tips
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Meet Pamela
Pamela Maass Garrett is an award-winning Estate Planning & Asset Protection Attorney, and CEO of Law Mother LLC, a law firm she founded to help parents protect their futures and loved ones. Pamela is also the author of the bestselling book, Legally Ever After. Pamela is on a mission to simplify legal, tax and financial strategies for parents with over 2M followers on social media.
Transcript:
Pamela Maass Garrett:
While you can’t control when it’s going to happen, you can control what your loved ones are going to have to go through, what their experience is going to be, what your real legacy is. And I feel like that gives a lot of peace of mind and ownership and empowerment over the whole process, which makes it much more comfortable to go through.
Tori Dunlap:
It is officially spoopy season, everybody. And if you’re not chronically online like I am, I had to explain to my partner the other year what spoopy was. Okay. So they’re spooky, right? Spooky is actually scary, right? Like Kathy Bates in Misery or haunted corn mazes which I did when I was a kid and was literally forever scarred. Have you done a haunted … I hate getting scared. That’s a quick side note. I hate it. I will not do haunted mansions. I don’t watch horror movies. I have absolutely no interest in doing that. Even talking about it, literally I’m like goose bumping as I speak. Definitely didn’t watch Goosebumps growing up. Don’t like getting scared. So that’s spooky. Spooky is horror movies and scary stuff. Spoopy is cute spooky. So we’re talking the cute little ghosts that have the big eyes and our cute little animations. We’re talking like Charlie Brown Halloween. We’re talking children trick or treating. Spoopy. Spoopy is the cute part of Halloween and I love spoopy. So it is spoopy season.
I realize now saying spoopy so many times. I’m at the point where spoopy doesn’t sound like a real word because it isn’t. But yeah, it’s spooky season, it’s spoopy season. So to all those who celebrate, welcome. In the theme of Halloween, we are talking about something a little scary, which is death, but really estate planning. I know it’s not a fun topic, I know it’s not exciting to talk about your death or somebody who loves death, but this is one of those personal finance things that just is so overlooked and has a huge impact, not just on your money, but on your mental health, on your life. The last thing I want you dealing with when you are in a time of grief and stress and chaos is wondering what the person you loved whose died wishes are or wondering where your kid is going to go and who their legal guardian is. There are so many things that you don’t realize are stressful until you’ve been through it, until you’ve had someone close to you who’s died. And also you don’t want that experience for somebody else. I need you to have an estate plan. I need you to make sure that you’re covered.
And I also want to debunk the misconception … We talk about it in the episode too. People believe you only need a will if you have a bunch of money or you have a nice house or you have a lot of stuff. You need a will period. Every single person needs a will, but you especially a will if you have children because I need you to assign legal guardianship. This is so crucial and so important.
So we have an estate planning attorney on the show today to talk to us more about it. Pamela Maass Garrett is an award-winning estate planning and asset protection attorney and CEO of Law mother LLC, a law firm she founded to help parents protect their futures and loved ones. Pamela is also the author of the bestselling boo, Legally Ever After and is on a mission to simplify legal, tax, and financial strategies for parents. And she also has over 2 million followers on social media.
We get into estate planning, what it is when you need it, and how to know when it’s time to bring enough professional to help. We talk about planning for your children or dependents. Why just being married doesn’t mean that your spouse will be taken care of in the event of something happening to you. We give you the too long didn’t read on wills and trusts and how to get more comfortable talking about subjects that can feel really scary because you have to. You have to if you want to protect your money and your loved ones. And we also talk about what happens to your assets should you die and what happens to digital assets like crypto, NFTs or anything that is in the digital sphere. So super important episode, please send it to your family, please send it to the people in your life. Allow this to open up a conversation for you. And without further ado, let’s get into it. But first a word from our sponsors.
Pamela Maass Garrett:
I am in Colorado. Inglewood, Colorado.
Tori Dunlap:
Oh, cool.
Pamela Maass Garrett:
Yeah.
Tori Dunlap:
I have not been there, but I’ve been to Denver quite a few times and I really like it.
Pamela Maass Garrett:
So suburb of Denver.
Tori Dunlap:
Okay. Cool.
Pamela Maass Garrett:
Practically the same.
Tori Dunlap:
It’s really cute. The little Union Station downtown. You know what I’m talking about?
Pamela Maass Garrett:
Yeah.
Tori Dunlap:
Yeah. Very cute.
Pamela Maass Garrett:
And you’re in Washington?
Tori Dunlap:
I’m in Seattle. Yeah.
Pamela Maass Garrett:
Amazing.
Tori Dunlap:
And it’s beautiful. It’s been like we’ve had a heat wave, so it’s been like 90 degrees in Seattle, which is just very hot for us. I am so excited to dive right in with you. We like to ask guests who have financial backgrounds or who are going to talk to us largely about personal finance and money, what their first money memory is.
Pamela Maass Garrett:
Yeah. So my first memory around money is back when my best friend on our street came over to play Barbies for the first time and she brought over her whole collection of Barbies, which was a shoebox with two Barbies in it. She came into my room and I had a whole tub of Barbies and the dream house. I just remember her being in so much awe and feeling really sad. Sad for her, wanting her to have more Barbies. And I think that was that first moment where I had the shift in my mind where it wasn’t just focused on me and I was really focused on her and her having more and realizing, hey, my parents definitely didn’t have a lot of money growing up. They were self-made and they were penny pinchers, they were budget. So I definitely didn’t have all the toys in the world, but I think up until that point, as kids we’re so focused on what toys we get and us, and that was a big turning point for me.
Tori Dunlap:
I don’t know. Because we’ve asked this question quite a few times on the show. I don’t know if anybody’s talked about how their money memory was really about somebody else’s realization that maybe their financial state was not what yours was. I find that so fascinating.
Pamela Maass Garrett:
Yeah. And I think we lived in a middle class neighborhood in Mesa, Arizona, and I had a four bedroom house and it was a family of four and my best friend had eight brothers in that same size house. So it’s so characterized that time. She would always want to come over to my house and it was just such that moment of her clothes and just constantly in my face. And I just remember focusing so much and thinking about that. And then it shifted a lot because we moved a few years later to an upper middle class neighborhood and I think that reason it stands up so much is then I became my best friend. I was the poorest one, I was the outsider. I felt less than. And so it really influenced a lot of my limiting money beliefs that I had for a lot of years.
Tori Dunlap:
How old were you around this time? Did you mention that?
Pamela Maass Garrett:
Yeah. I was thinking about that the other day. I want to say it was before elementary school, so right before we started elementary school.
Tori Dunlap:
Yeah. So probably five. Between four or five.
Pamela Maass Garrett:
Five or six. Yeah.
Tori Dunlap:
Yeah. Wow. It’s crazy. That’s what I love and hate about asking this question is it’s like you just realize it so much about how we view money or so much about the narratives that we believe about money have everything to do with our childhood experiences around it. Just like every other trauma I guess. But it’s just so interesting to me.
Pamela Maass Garrett:
Yeah. Absolutely.
Tori Dunlap:
So estate planning, a dark subject. My job before I was running Her First $100K full time was marketing an app around wills, trusts, and life insurance. And it was a very, very difficult thing to do because no one wants to think about their death and they definitely don’t want to think about others around them dying. So what brought you into this world? Why are you passionate about it?
Pamela Maass Garrett:
Yeah. So I started my career as a lawyer, as a deputy district attorney. And if you think of Law & Order, that was my life. I was in court every day. I was in trial every week. I loved it. I loved serving my community, I loved being in court. But I started to see something Tori that I didn’t like. I saw what happened when people had no estate plan in place. So I saw crimes or car accidents and I saw kids end up in foster care. I saw families end up in these lengthy probate court battles and I started to ask those questions, why is this and what can we do? And that’s first got me very interested in estate planning and helping people really protect the people they love, protect themselves, and get that great start, get that plan in place.
Tori Dunlap:
I think that that is one of the misconceptions. Maybe it’s just about of course life in general is none of us plan of course to unexpectedly die. But again because I ran marketing for this company, I know that I think the number one cause of death for people under 40 is accidental. I don’t know if that’s still true, but there’s all these stories of someone in a skiing accident or a car accident. And I think that of course we don’t want to think about it, but it’s then worse if it happens because we haven’t done anything to plan for it.
Pamela Maass Garrett:
Absolutely. Yeah. I think you touched on a major point. It’s one of those things people tend to put off until it’s too late and then it’s too late.
Tori Dunlap:
Right. So when it comes to working with clients who are uncomfortable talking about death, how do we get them comfortable talking about it or thinking about it?
Pamela Maass Garrett:
Yeah. So I feel like this comes up a lot because I work with couples. And so a lot of times the wife will set up the appointment and the husband will show up and he’ll have his arms crossed and just be angry and pissed that he is there and he doesn’t want to do it. And I get that. I understand the discomfort. And I think a lot of the discomfort around death comes from us not being able to control it. It’s a scary thing because it’s completely uncontrollable. Like you were saying, we don’t know when it’s going to happen. And so what I like to do is really share how estate planning allows you to have some control around your death. While you can’t control when it’s going to happen, you can control what your loved ones are going to have to go through, what their experience is going to be, what your real legacy is. And I feel like that gives a lot of peace of mind and ownership and empowerment over the whole process, which makes it much more comfortable to go through.
Tori Dunlap:
Yeah. It was one of the things we talked about of think of it as the least selfish thing you can do, the most selfless thing you can do, which is think about your own death but only for the people who are going to have to deal with it. Obviously when you die you don’t have to deal with it anymore, but your family does. Your spouse or your children or whoever is in charge of your stuff and your money and where it all is. I think that is one of the most selfless things you can do to make sure that you are making it easier when you die and not harder.
Pamela Maass Garrett:
Yeah. I think selfless and a gift is right on. The people who put a plan in place that’s what they’re doing. They’re giving that greatest gift to that people they love.
Tori Dunlap:
And I have been in this situation with family members who had it and I’ve been in situations with family members who did not. And speaking from personal experience … And I think we all have the story of somebody who did not or had not enough in place and there was a lot of conflict in the family because you’re in a very emotional time. There was fighting over assets and stuff and it’s just not a fun experience. So you’re also preventing not just the lack of coordination of where is everything and what’s happening and then do I have to go to court to figure it out, but also the infighting with your family.
Pamela Maass Garrett:
Yeah. And a lot of times that type of infighting comes from the simplest things. So I know in my own family I had a family member who wasn’t clear about wishes and it was a very low cost item that caused relationships to be strained, that are still strained today because there wasn’t a clear direction and people had different views.
Tori Dunlap:
Yeah. For us it was photo albums, which not worth any sort of financial money but worth a lot in terms of memories and emotions. Your book, your channel, you talk a lot about living trusts, trusts, wills. Can you explain the difference between a living trust and a will and the pros and cons of both?
Pamela Maass Garrett:
Yeah. So I like to describe it as far as what happens for your loved ones when you pass away, what’s the experience going to be like? And for a will, the pro of a will is they’re quick and easy to set up, relatively inexpensive. The cons is you’re dying with everything in your name. So when you’re dying with everything in your name, typically the probate court is going to get involved and they’re going to transfer everything from your name, they’re going to interpret the will and transfer it to the people you love. And that whole probate process takes time, costs money, and it really varies based on states. I know where you’re at probate is a little bit more efficient than where I’m at. On average across the country it takes between nine months and two years, costs five to 9% of the state. And then on top of that, your loved ones are going through this grieving process and they’re having to deal with lawyers in this time and assets get lost and then it’s public. The probate process is public, so all of your private information gets out there. And with a will, you can’t really do a lot of advanced strategies that you can’t do with a trust.
So the pros and cons of a trust, we just went through. With a trust, it’s a legal document. You’re making the transfer in life, so you’re holding all of your assets in the name of your trust and you make that transfer, you have full control. So the pro is it avoids probate, so it saves that time and money and you can do more advanced strategies you can provide … If you’re a business owner, you can do some more advanced strategies. You can do asset protection, you can set your kids up for success. And then the con is it does take a little bit more time and energy to put in place in front. It’s that short term for the long term. You’re spending a little bit more money up front, you’re taking a little bit more time up front, but then you’re saving your loved ones the time and money down the road.
Tori Dunlap:
If I’m a listener, I’m going, okay, when do I need this? And I can answer one of those questions again with my background of doing this for a bit. I think there’s just this misconception that I only need a will or trust if I’m wealthy, if I have a bunch of money. But for anybody who is a parent, you need a will in order to assign legal guardianship. That was, again, one of the things we talked about at the company I worked for that people don’t realize is, okay, let’s say you do die and especially both of you … Let’s say you’re in a car together and you get in a car accident. If you have, let’s call it an interesting family dynamic where there are certain people that you do not want your children to go to should you die, you need to make sure to have that in writing. So I think of that as a really interesting example of anybody with children you need a will to assign legal guardianship. It’s not about assets in that case necessarily. It’s not about how much money you have or if you own a home or if you have millions of dollars. It’s about protecting your children and making sure they’re going to the people you want them to go to. What other cases do you need in estate plan for?
Pamela Maass Garrett:
Yeah. So I always joke that when my kids turn 18, I’m going to show up in their room telling them happy birthday and then handing them a medical power of attorney and a durable power of attorney to sign. So we just got this call the other day from a mom whose daughter went off to college and didn’t have her EpiPen, she was out of state, ended up in the hospital and mom and dad are trying to call the hospital to get information because the best friend called and the hospital’s like, “Hey, your child’s 18. We can’t tell you anything. HIPAA.” And so once you turn 18 when you’re an adult, there’s some basic documents you should get in place that we’re always talking about. At least the medical power of attorney who’s going to make your medical decisions if you cannot, your financial power of attorney who can step in for you financially.
And then yeah, life stages. When you own a business, if you want to make sure your business has a plan for when you pass away, that it’s not going to end up stuck in the probate process and can carry on. When you own real estate, when you get married and when you have children, those were other times when it’s really important. You really have things that you want to set in place. And then I have a lot of clients who are single and it’s that incapacity planning. If I was to become incapacitated, I want this person to step in and make my decisions. I don’t want to leave it to chance. And I think we all remember hearing about Britney Spears and what happened with her. And you being the one that’s in charge of, Hey, if anything ever happened, I’m setting it up front. I don’t want it to go to chance.
Tori Dunlap:
And I will also admit for you dear listener, even me, the multimillionaire financial expert, I don’t have a full estate plan yet. It’s on my docket of things to do, but I get it. You get busy, life gets hard, you don’t want to think about it, it’s all get to it eventually. So it is one thing that this interview is forcing me to think more about, which is important.
You also talk about updating your estate plan. When should that happen? I imagine big life events as well.
Pamela Maass Garrett:
Yeah. So I would say at least every three years or after big life events. Marriage, purchasing, new assets, business, kids, all of that.
Tori Dunlap:
I don’t mean to go into fear mongering, but I do. You’ve mentioned a little bit of what happens if we don’t have an estate plan. Give me the full thing. From start to finish if we don’t have one, what then happens and what toll us that take on our families?
Pamela Maass Garrett:
Yeah. I would say so. The first is if you become incapacitated. So a lot of us in our lifetime will, and so what’s going to happen is it’s going to go to court and the judge is going to decide, hey, who’s going to manage your financial and health decisions? I don’t know if you remember the Terri Schiavo case back in the ’90s. But in that case, she was a young woman, had cardiac arrest, she was married and she was on life support for several years in a vegetative state. No chance of survival and no chance of regaining consciousness. And her husband wanted to take her off life support at about the seven-year mark. Her parents did not. And it became a big political issue. Most of us, it won’t become a big political issue, but it was litigated for many years. This poor woman was kept on life support. Eventually she was allowed to pass.
So the reality is for most of us, it won’t become a big political issue. It touches on what we talked about before that it will become a family headache. And then when we pass away, it goes through the probate process. The government’s taking control. A stranger is making decisions and they might not be the decisions you want. And you touched on this before, who would raise your kids? Worst case scenario, kids can end up in foster care, which no parents want. And being raised or money going to people we don’t want in the way that we don’t want. All the things you’ve worked so hard to grow throughout your life, making sure that that’s preserved in the way that you want it to be.
Tori Dunlap:
Yeah. I forgot about the Terri Schiavo case until you just said that. If you don’t know, again listener what that is, I would maybe just do a little bit of research because I remember hearing … I think it was on Oprah if I remember correctly. It was a big deal on Oprah and my mom watched Oprah growing up, and so that’s where I remember seeing it. The difference between a trust and a will we’ve talked about, but can we talk about … Again, I think there is this misconception around trust funds or again, you need a bunch of money. When do you need a trust versus a will?
Pamela Maass Garrett:
Yeah. So I really don’t subscribe to this idea that you need to have a certain amount of money to qualify for a trust. It’s really about your choices and who you are and what your values are and what you want your loved ones to go through when you pass away. I will say, I have a client that I set up a trust for who works at Walmart and she owns her home and she wanted to get it set up for her kids. I have big tech people. I have every spectrum. So you don’t need to have a certain amount of money to set it up. It’s about your values, your choice of what you want your loved ones to go through. I will say in certain states, once you get over a certain value, it does become very like an economic, it makes sense to do it. So in Colorado, that’s 75,000. If you have over 75,000 assets. But I have clients that have less that put it in and clients that have more. So it’s really about that experience you want your loved ones to go through. If you want it to be quick and easy and you want everything protected.
Tori Dunlap:
Another misconception I think, and especially from your work, is that a lot of people just think that their spouse may automatically have authority over what happens to you and your possessions and whether you become incapacitated or you pass away. And even with the Terri Schiavo case, that’s proof that things are a lot messier than that. So can you outline some circumstances where the spouse might not be in charge or how people can be proactive in thinking about that?
Pamela Maass Garrett:
Yeah. So I think you touch on the Terri Schiavo case and incapacity. It’s not a default If you become incapacitated that your spouse is going to step in and if anyone related to you challenges it, the judge will listen to it. And then it’s just based on who’s the judge, you get what they decide. And then when you pass away, depending on if you have children from a prior marriage from this marriage, if you have no children, if your parents are alive, every state really has different laws around it. And some states based on your years of marriage and your parents will receive a certain amount, some it will go to your kids. So you really need to set it up so that it goes in the way that you want. And especially for blended families, a lot of times children get inadvertently disinherited because parents don’t realize that. And so you’re the first to die, you’re remarried, you have new stepchildren, everything goes to your spouse, then the spouse dies, it goes to your stepkids and your kids receive nothing. So really making sure that you understand that.
And then at some point you and your spouse are going to pass away. And so having a plan for that. And then in some states there is common law marriage and you may pass away and the person you’re with that you’re living with may argue that you were married after the fact or you both pass away and the kids may argue that you were married. And so if you’re in a long-term relationship and you’re in one of those states, it’s important to address it.
Tori Dunlap:
Yeah. I was going to ask about domestic partnerships or if there is any legal difference, should somebody die or become incapacitated between legal marriage and the other kinds of partnerships that might be approved legal under the law?
Pamela Maass Garrett:
Yeah. Absolutely. And it varies by state. And so if you are in a domestic partnership … And we really saw this during COVID where people were in partnerships and they wanted their spouse or their partner or their girlfriend or boyfriend at their side at the hospital, and they weren’t allowed in or they didn’t receive what they thought they should. So yeah. If you’re in any type of partnership and you want to make sure that partner is treated under the law as someone that receives the benefits that you want them to, it’s important to plan for that and put that in place.
Tori Dunlap:
You talk here about your legacy framework. Can we go through that acronym?
Pamela Maass Garrett:
Yeah. So in my book, Legally Ever After I talk about the six step plan and the six step plan spells the word legacy. So the first L is legal guardians, which we’ve touched upon. And you want to name legal guardians so that if something were to happen to you, it’s clear who would take care of your kids. And if not, the default would be a judge would decide. E is economic support. And one of the easiest ways I recommend getting started is grabbing a file folder and putting everything that you have together and letting someone you know, love, and trust know where it is. And that could be a digital file or it could be a hard manila file. One of my friends lost her father unexpectedly a few years ago and he had nothing in place, and so she didn’t know what assets he had. So she had to go through all of his mail, computer files, boxes, trying to find what he had and where it was. Calling old employers. She’s married, she has children, she was working a full-time job. She described that whole process as a full-time job trying to figure out what assets he had. And so just doing that. You talked about Tori that you haven’t done your plan yet. Even just doing that step right now of organizing everything and telling someone you know where everything is will take a huge burden off of them.
Tori Dunlap:
I’ve done that for my parents. My parents know where things are and they know a general outline of what I would want. They also have for me, they have what they jokingly call the binder, except it’s not really a joke. It’s huge binder. And they’ve been talking to me about the binder for the past eight years and they’re like, “Here’s where it is. Here’s where all our accounts are.” And again, it doesn’t sound sexy, but I just have so much peace of mind knowing that when I am an emotional wreck and I am completely so exhausted and tired when I lose my parents, that that’s not something I’m going to have to think about. So the binder I highly suggest.
Pamela Maass Garrett:
Yeah. And I love that communication is such an important piece, which I’ll touch on in a second. G is guidance. So we all deal with employee handbooks at some point in our life. That is your handbook for your life. What are your wishes? If you’re a parent, it’s your parenting handbook. What are your educational values, your spiritual values, your financial values? What do you want passed on? If you’re single without kids what are your values around your decisions if you are end of life around your funeral of that? A is asset protection where it really comes into play if you own a business, if you have people that you want to receive things in an asset protected way to protect from future divorces, future fraudulent credit. C is carry through, communicate, and update, which we just touched on Tori. Your parents have done a great job communicating with you. These plans only work if you share them with the people you love. And the silent generation really didn’t want to talk about it. And I know you do such a good job and your podcast, and I love your book of having these conversations, having people talk about it. These plans only work if you carry through, you communicate and you keep it up to date.
And then Y is your legacy? So when you pass away, your loved ones are going to miss you and they’re going to want more to remember you by, besides your estate planning binder, the binder that we talked about. They’re going to want your insights and your stories and all of that. So with our clients, we do a legacy interview at the end of the process where we’re asking them those questions and we record it and we save it in their file for their loved ones. And we’ve had generations of people coming back to us and saying, “Wow. This was so meaningful.” So with technology these days, I’ve got on Zoom with my parents, had them start recording advice for my kids. So these kinds of things really do make a big impact.
Tori Dunlap:
That’s really nice. That really is nice. Well, because yeah, you get caught up in the like what is the legal documents of it all, but it’s easy to forget that there’s actual people with stories and memories that you also want to pass on too. I love that. That’s really nice.
Okay. Talk to me about debts. Can debt get passed on? How do we protect children from inheriting their debts? Tell me all about that. Also, I think I know that if you are a co-signer on a student loan and somebody dies, you still have to pay your student loans, which I think blows a lot of people’s minds. So in death you cannot get away from paying off your student loans.
Pamela Maass Garrett:
Yeah. So you bring up a good point. It depends on the debt and it depends on co-signing. So federal student loans typically, if someone hasn’t co-signed, those go away when you pass away. So that’s a nice benefit there. And then private, usually it’s going to collect against the state. Your real estate, if you owe a mortgage, the state when the house is sold, it’s going to have to be paid off. Other types of debt, typically you’re going to have to pay from the estate overall. So I think from a conversation around protecting from debt what to do, it’s being clear what’s there and having that organized and being able to communicate that. And then as you mentioned, Tori being very careful what you co-sign because if you are a cosigner and that person passes away, that is something that you’re going to be on the hook for, which is a shock to people.
Tori Dunlap:
So when we’re talking about all of these things around, of course estate planning and trusts, we haven’t touched on life insurance yet. Talk to me about the importance of life insurance. And I also would love to talk about things like indexed universal life insurance, which people often say is an investment, but I think is a complete scam. So talk to me about the importance of life insurance and which kind should we be getting?
Pamela Maass Garrett:
Yeah. So when it comes to life insurance, I’ll just disclaimer here, I don’t sell insurance. I always think you should do your research. As Tori mentioned, there’s a lot of scams out there and there’s a lot of unethical practices. So you really want to work with licensed reputable people who have a good reputation, understand everything that’s involved. And to your last question around debt, a lot of families purchase insurance to cover that. So that when they pass away, there is going to be insurance money to pay off all their debts and for their kids to have a meaningful amount of money that will help them out. So I always say term life insurance is something to look into because they’re low fees, they’re affordable, and especially in your wealth building years, they are going to be something that is going to cover you.
So if I was to pass away right now, I personally want to make … My husband’s a stay at home dad. I want to make sure he’s covered. I have two kids, I want to make sure they’re covered. So I have a big policy on myself that’s a term policy that is during these wealth building years that I just know … I get on a plane and I’m like, if something goes down, I know my husband and kids are going to be taken care of. They’re not going to have to do a Go Fund Me. And it’s really inexpensive. Less than a hundred bucks a month.
You can get term life insurance policies for your children. A lot of times there are some innovative things people do around that because then they’re locked in. So then if they later have something that excludes them, they get that benefit. When it comes to whole policies, IULs, all the more advanced strategies, it is much more complex. I would just say be cautious like you mentioned Tori. You really want to be aware of the fees, aware of the opportunity cost. Are whole policies useful for certain high net worth of individuals who are facing estate taxes? Absolutely. Are there some whole policies or IULs that might for specific situations be advantageous? Yes. But I would say for the vast majority of people, they’re going to really want to do that cost benefit analysis and work with a professional. Trust people like Tori to help you really do that cost benefit, do that comparison between is your money better spent somewhere else?
Tori Dunlap:
And I’ll be even more direct, just don’t. No. The average person listening to this show, 99% of you term life is exactly what it’s for. And we always, life insurance is for life insurance, and investing is for investing. You’re getting life insurance for the life insurance benefits, not as an investing vehicle. And especially if anybody is out here saying, “Oh, use an IUL instead of your 401k.” You don’t have a financial advisor, you have a life insurance salesman. And the reason they’re telling you that is because they make massive commissions off of you signing up. So yeah, don’t do it. It’s just not worth it. You have better ways to get rich and other avenues.
So I am listening and even as myself, I know I’m going to need to go to an attorney. Maybe you and I should talk after this. I know because my situation is complex enough. I own a business, I’m a multimillionaire, I don’t have any dependents, I don’t own property. I just know that my situation is going to probably need an estate attorney. Where can we go? Are the apps like the one I worked for legit? Tell me for the average person, what should I go do? Okay. I need an estate plan, I need a will to assign legal guardianship. What is the cheap but gets the job done version, and then what’s the more advanced version?
Pamela Maass Garrett:
Yeah. So I would say, obviously I’m an attorney, so I’m a little biased here because I see all the aftermath of what happens when people do it themselves. So I would say if you’re the type of person who values professional advice, whether it’s when you bought your home, you worked with a realtor because you wanted that support, you wanted to save the time and money. If when you started your business, you worked with coaches, if for your financial journey you’re working with Tori in the community. If you’re someone that values the advice to save money, save time, understand how it all works, you are going to get more ROI working with an estate planning attorney that’s licensed and recommended in your state. And go on Google, look at reviews, chat with your network, get a good recommendation for someone, and I can give some more tips about what you should be asking specifically with regard to attorneys.
Tori Dunlap:
That would be great.
Pamela Maass Garrett:
Yeah. But I would say the danger of doing it yourself online is diagnosing yourself medically online. You’re the advice, you’re not paying for the documents. And people tend to make a lot of mistakes. It’s all of your assets, your real estate, your business, everything you own, and you’re going to go spend like a hundred dollars to protect it all. I will say as an attorney, we make more money if you do it yourself online because in probate, if it all fails and it goes through probate, we make more money. So I would say for the people who are suspicious, well, she’s an attorney, she’s telling you to work with an attorney, actually we make more money because when plans fail down the road, we go through probate, we make more money. So it’s me coming from this place of my own family, went through horrible probate. I don’t want to see people go through that process. Spend the money, get a plan in place that’s really going to give you that value. You’re not going to get the same value from doing it yourself online.
That being said, I know there’s some people who will never work with an attorney and will do it yourself. And so I would say if you’re going to do it yourself online, that step that we just talked about, getting everything organized and communicating is where a lot of people make mistakes and the down the road tend to be worse. Look for software that has options for your specific state. And I would say if you’re going to go the trust route, don’t do it online because there’s so many nuances of putting things on the trust that the online shops just can’t provide. If you’re going to do a will online, you’re going to keep it simple, you know it’s going to go through probate, just find a resource that you feel comfortable that’s tailored to your state.
As far as working with attorneys, things that you can ask for, I went through the basics. Someone that’s licensed in your state, get a referral, someone that has good reviews. We do everything at our firm flat fee agreed to in advance so there’s no surprises. There are a lot of firms moving to that. So I would say understand up front how they’re going to charge you. If they’re going to charge you hourly every time you have a question or nickel and dime you on getting things notarized, you just want that transparency up front. So we do it flat fee, agree to in advance. So there’s no surprises that people can call us when they’re at the bank and they need support and they’re not scared of getting a 450 an hour charge. We also have ways to keep plans up to date. So I would say work with a firm that has membership programs or ways for you to stay in contact because this is not a one and done thing. You’re going to need support ongoing. And look for a firm that takes that educational approach and is going to take the time to explain things to you so that you can maintain it and understand it.
Tori Dunlap:
So it’s okay to use something online if you have a basic … To your point, I just know that there’s some people who are just like, “No. Attorneys are too expensive. I’m not going to do it.” But we would rather have them have something than nothing. Is that accurate?
Pamela Maass Garrett:
Yeah. I would say I don’t want people to have a false sense of security.
Tori Dunlap:
Yeah. Yeah. Good point.
Pamela Maass Garrett:
There was a woman in Texas that I always give the example who went and did a will online. She owned a piece of real estate and she owned a retirement account and she had two kids. They were worth about the same. So she said, “Okay. I’m going to give my daughter my retirement account and my son my real estate.” She put it on her online will. Simple. I have two assets, easy. Done. She passes away many years later, as you might expect Tori, she used that money in the retirement account. So when she passed away, her son inherited this piece of real estate that was extremely valuable and her daughter received something that was worth really not a lot. So the daughter went to her brother and said, “Hey, I don’t think this is what mom wanted.” And the brother was like, “Well, that’s what she put in the will.” So they went into litigation. It was a big battle. The court ended up sorting it out. But that’s the thing is people don’t realize even simple cases, how an online form isn’t going to explain those nuances to you and how it all works.
Tori Dunlap:
What happens with digital assets?
Pamela Maass Garrett:
Yeah. So digital assets are the new frontier in the estate planning world and I don’t feel like the law has completely caught up with it. I would say you can have your plan set up so that you have a digital executor. So you can name someone to take care of your digital assets. Technology has come out with a lot of different social media sites. So Facebook, you can put a legacy contact. iPhones, you can put a legacy contact. I would encourage you to do that. I am a big fan of password aggregators like One Pass and some of the other ones. Use the one that you like. But those are a really great way. You can also use a legacy contact. And then sometimes people just do the good old-fashioned password books and let their loved ones know. But you do want to plan for your digital component, especially for photos. Especially for your iPhone login. Those kinds of things I think tend to become messy after the fact and create a lot of burden down the road.
Tori Dunlap:
As we’re wrapping up, what is one thing that you want somebody to take away with and what is one … Obviously I think it’s going to be get an estate plan, but what is one thing that somebody can do right now to just have more of their estate in order?
Pamela Maass Garrett:
Yeah. I would say just one takeaway, one thing you could do now is grab that file folder and put the first page of everything you own in it. So a copy of your business entities, a copy of your retirement account statements, your bank account statements, your life insurance, get that all organized in a folder and tell people where that is. And that’s such a great step if something were to happen that they’re not trying to find it, that things aren’t lost. And that’s your first step when you need to do a plan, whether you’re going to do it yourself online, whether you’re going to hire an attorney, they’re going to ask you to collect all of that so you now have everything organized in one place. And the other benefit of having everything financially organized is when you work with people like Tori and her programs, you need that financial organization so that you can grow your wealth. You need to be revisiting that. So get it all organized in one place and that’s the first step. And so important.
Tori Dunlap:
Thank you so much for all this information. I have a large to-do list now that I might be reaching out to you about. Let us know where people can find more about your work and where they can potentially work with you.
Pamela Maass Garrett:
Yeah. So we are on Instagram, LawMotherCO, on Facebook, LawMother, TikTok, LawMother. And you can download a free copy of my book Legally Ever After. We give it out digitally for free when you follow us. All the details are there.
Tori Dunlap:
Amazing. Thank you so much. Appreciate it.
Pamela Maass Garrett:
Thank you, Tori.
Tori Dunlap:
Thank you so much to Pamela for joining us. You can get her bestselling book Legally Ever After for free on her website, lawmotherco.com. You can also follow her on Instagram at lawmotherco. Thank you so much for being here. As always, please leave us a review if you like the show. It’s really, really helpful for us. We’ve received a lot of negative reviews recently saying that the show is too political and I call bullshit on that. So it really does help our ratings and it hurts our ratings for the negative reviews and helps our ratings for the good ones. So please leave us a five star rating if you enjoy the show and if you’ve gotten any value from it. And we also appreciate you sharing this show with other people in your life. So thanks. Go vote. Vote.org. We’ll talk to you later. Bye.
Thank you for listening to Financial Feminist, a Her First $100K podcast. Financial Feminist is hosted by me, Tori Dunlap, produced by Kristen Fields and Tamisha Grant, research by Sarah Sciortino, audio and video engineering by Alyssa Midcalf, marketing and operations by Karina Patel and Amanda Leffew. Special thanks to our team at Her First $100K, Kailyn Sprinkle, Masha Bakhmetyeva, Taylor Chou, Sasha Bonnar, Rae Wong, Elizabeth McCumber, Claire Kurronen, Daryl Ann Ingram, and Meghan Walker, promotional graphics by Mary Stratton, photography by Sarah Wolfe, and theme music by Jonah Cohen Sound.
A huge thanks to the entire Her First $100K community for supporting the show. For more information about Financial Feminist, Her First $100K, our guests and episode show notes, visit financialfeministpodcast.com. If you’re confused about your personal finances and you’re wondering where to start, go to herfirst100k.com/quiz for a free personalized money plan.
Tori Dunlap
Tori Dunlap is an internationally-recognized money and career expert. After saving $100,000 at age 25, Tori quit her corporate job in marketing and founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. She has helped over five million women negotiate salaries, pay off debt, build savings, and invest.
Tori’s work has been featured on Good Morning America, the New York Times, BBC, TIME, PEOPLE, CNN, New York Magazine, Forbes, CNBC, BuzzFeed, and more.
With a dedicated following of over 2.1 million on Instagram and 2.4 million on TikTok —and multiple instances of her story going viral—Tori’s unique take on financial advice has made her the go-to voice for ambitious millennial women. CNBC called Tori “the voice of financial confidence for women.”
An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.
