- 3 hours ago
Nobody wants to think about death. But every Black man has people depending on him — and what happens to them when you're gone is one of the most important decisions you'll ever make while you're still here. This conversation breaks down everything you need to know about protecting what you've built — wills, trusts, probate, life insurance, and the legal tools that keep your family from fighting over, or losing, what you worked your whole life for.
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00:01Welcome to the Sway Stage. Building wealth is important, but protecting it is just as essential.
00:07Today, estate planning attorney, Michael Hall, breaks down the tools family need to build,
00:12preserve, and pass on wealth for generations to come. Please welcome Michael Hall.
00:28How's everybody doing this morning? Good. We get to talk about estate planning, leaving a legacy and building wealth for
00:38your family going forward.
00:41And so, generally when I do this talk, we talk, most people don't like this talk because they fear they're
00:48about to die for some reason or another,
00:49but we go have this conversation and talk about it. First thing we generally would talk about here is, what
00:57do you need to do to plan for your future?
01:00The one thing that I generally do is tell you you need to create a will.
01:05And I guess for purposes of an introduction, I am Michael Hall. I'm a family law and estate planning attorney
01:12here in New Orleans.
01:13And we've been doing this for about 22, 23 years. So, a little experience in doing it, and we try
01:20to take the shock out of it when we talk about it.
01:23So, when you create a will, that's the first thing I tell everybody you need to do.
01:31It just happens. Whether you have no children, one child, a wife, you need to do a will because that's
01:38the way you leave the rules for how you want things done when you pass away.
01:44So, you cannot change it. You have to actually follow the rules put in.
01:51So, generally, I will give it to you from the perspective in Louisiana.
01:57If you don't have a will, the state tells you how all of your assets will go.
02:04You have no, you have nothing to do with it. The state does it.
02:09So, you must. Absolutely, it's a must. You must create a will.
02:13In your will, you outline all of your assets.
02:16You say what you want to do with your assets.
02:20And, you know, I tell people all the time, they talk about legacy.
02:23I tell people, your children are your legacy, not the stuff that you have.
02:27Your children are your legacy.
02:29Your assets, that's the things you leave them to let your children do what they need to do with your,
02:36you know, with the assets.
02:37So, outline it. Tell us exactly what you want done.
02:43You got two kids. Look, I want to leave it to them equally.
02:48You got two kids. You don't want to leave it to both of them.
02:52You want to leave something to one, something to the other.
02:54You have to specifically say that.
02:57You have to specifically dictate that out in your will.
03:03Insurance is another thing that we come up with, and when we're talking about these things, insurance policies are generally
03:11not included in your estate.
03:13What I tell people a lot, though, is think about a trust if you have young children for purposes of
03:22your insurance policies.
03:24If you have young kids, when you're creating your will, make the trust the beneficiary on your insurance policy.
03:36Now, I am not a fan of a trust unless you have young children or you have special needs children.
03:42In my opinion, that's the only time you need to create a trust.
03:47Trusts are generally designed for tax purposes.
03:52It's a tax shelter.
03:53It is designed, in my opinion, to protect people who have a lot.
04:02If you have, like most middle class Americans here, you die, you have your main house, maybe one or two
04:10pieces of property, you don't necessarily need a trust.
04:13You need a will.
04:14Leave that in, dictate that out.
04:17Now, people can put it in trust.
04:20It's not what I would do because it's so hard to get it out of the trust once you put
04:26it in there.
04:27And, again, when we're talking about your legacy, i.e., your children, you've got to also be mindful and focus
04:36on the fact that once you're gone, once you close your eyes and you go see the Lord, it goes
04:42to your children.
04:43Your children only.
04:45You should not try to dictate to the grave or dictate from the grave, I'll say it like that, in
04:51that you say, when I die, I leave it to this kid, and then when this kid dies, it's got
04:57to go to this person.
04:58And when this person dies, it goes like that.
05:01Technically, that is not allowed in Louisiana law.
05:03Now, some of you guys may be from different states, so it may be a little different there.
05:07However, in Louisiana, it is not allowed.
05:11And, again, I just wouldn't recommend that you do it that way, simply because you may be a person who
05:19has a lot of real estate, and you are a real estate person, but your children are not.
05:27And I'll use myself as an example.
05:29I have two daughters.
05:31Both of them are teenagers.
05:35I've got a law practice.
05:36They hate the law.
05:38They don't want to be lawyers at all, the furthest thing from it.
05:42I'm not going to force them to be a lawyer.
05:45I'm going to tell them to chase your dream.
05:49Use my assets, because, again, you're my legacy.
05:52Use my assets to chase your dream at the end.
05:55Same thing with property, and clients that I have who own a lot of property, they want to, say, put
06:00the property in trust so we can leave it for the kids to have and let them do it.
06:05But my opinion there is that's not such a wise thing, simply because my kid's not a property person.
06:13My kid's an artist.
06:14She wants to be on Broadway.
06:17And, again, I'm using me as the example.
06:19My kid, these lights are killing me.
06:22Come on, we're going to be, we've got to be real now.
06:25My kids like Broadway, my oldest kid.
06:30She wants to be on Broadway.
06:32She wants to do that.
06:33Take the property that I own, one of them.
06:38Fund your dream.
06:39That's your dream.
06:40Fund your dream.
06:41Daddy's going to do whatever he can to make your dream work.
06:43And if that means doing that, that's the way I would recommend you do it.
06:47Don't put it in trust because you lock it in.
06:50It's easy to get in.
06:52It's hard to get out.
06:53Sounds like being married, doesn't it?
06:55That's what a trust is.
06:57It is just like that.
06:59So I would not recommend that part for purposes of a trust.
07:04That's not what I would say.
07:06I would say, however, create an LLC if you have property.
07:12And I'm talking about that because a lot of my clients, that's what they do.
07:16Create an LLC.
07:18Put your property under the LLC.
07:20It's easy.
07:22Your children, you're the member manager.
07:24Your children inherit from you at that point.
07:27They can transfer the LLC to you like that.
07:30You can't transfer the trust because the trust is its own juridical entity with its own rules.
07:35So put it in an LLC.
07:37Put it in an LLC, not a corporation because, again, it's a little difficult there.
07:42It passes.
07:44You can transfer the company.
07:46It's easy to buy and sell doing it that way.
07:50Y'all got questions as we go?
07:52Stop me.
07:52I'll take it.
07:53Go ahead.
07:58I got a question.
08:10His question is, if you put your house in a trust, essentially, does it help you or prevent you from
08:19getting sued?
08:19Or how does it protect you from getting sued?
08:22So, same principle.
08:23Yes.
08:24Does it protect you from getting sued?
08:25But they're going to sue the trust.
08:27They're not suing you.
08:28All right?
08:30But it's the same principle if you put it in an LLC.
08:33They sue the LLC.
08:34They don't sue you.
08:39Now, when you have it in the LLC, you've got to get the proper insurance, not just homeowners, but you
08:43need an umbrella policy to cover that.
08:45But it's the same principle.
08:47And it's easier to transfer.
08:50It's easier to leverage.
08:52You know, you've got to think of the property as it's not just property.
08:55It's actually money.
08:57I can leverage it in the different fashions that I need to.
09:00So, with the trust, it's a little harder to do it that way.
09:03It's a lot harder to do it that way, more steps.
09:06And, again, it's the reason why I say I'm just not a fan of it.
09:10Other people are.
09:11Trusts are just designed as a tax shelter.
09:14That's all it is.
09:16It doesn't help you.
09:18To me, it kind of handcuffs you a little bit.
09:21So, that's why I'm just not a fan of the trust.
09:24Go ahead.
09:26Go ahead.
09:36Yeah.
09:38Hello.
09:39So, I have a question.
09:40Me and my husband haven't started a family yet, and I work in the finance industry, and I've kind of
09:46been steered towards opening a trust.
09:49So, when you're saying it's easy to get in, because it is easy to open it up, but hard to
09:54get out,
09:54are you saying that once you put the assets in there, even if you have individual beneficiaries of the trust,
10:01it's essentially just locked in until someone dies, and that's why you're saying it's not the best vehicle?
10:09Yes and no.
10:10What I'm saying to you is, once it goes into the trust, the trust is the owner.
10:15You put it in an irrevocable trust, you decide seven years from now, you want to take it out.
10:21Now, you are actually in court proceedings to get the property out of a trust.
10:27Because, as opposed to just creating your LOC, you pop it in, you can transfer however you want to through
10:35an LOC.
10:36Again, I keep, I'm a, look, I'm the dead horse.
10:39I'm going to keep beating it.
10:41It's a, it's a tax structure, it is, it is not, I mean a tax shelter, it is not the
10:48vehicle for something like that, to me.
10:50It, rich people put assets, liquid, and maybe property as well, that's what they do with trust.
11:03And they live off of the residuals, that's what it's really designed for, because you will never touch my principal,
11:10I get the residuals yearly, monthly, or however you do your distributions, but I have such assets in there that
11:17it makes sense.
11:19And the principal never moves, the trust pays the taxes on it or whatever, but, exactly, exactly.
11:33Question.
11:36Yeah, I'm sorry.
11:39Like with the trust, say for instance, if I pass away in a trust, and I pass it on to
11:49my, say my house, I die, my kids get my, my house, don't they have to pay like capital gains
11:58on like the house or whatever, but in a trust you don't?
12:07So, the answer, the specific answer to your question is yes, but let me kind of give you the real
12:14answer.
12:15Yeah.
12:16So, again, that's why I say it's a tax shelter, essentially, and that's why people say you do that, but
12:21there's still a tax to be paid.
12:23The trust will be paying the taxes, but who does that affect?
12:28Because the trust money belongs to who?
12:30The beneficiaries that are getting, so you're kind of reducing it in that respect.
12:34But, that's what I'm saying, for purposes of your estate, when you do a will, you pass it to your
12:43kids, you're not going to have the capital gains tax that you're saying.
12:50You've got a million dollar threshold, and I'll give it for you, the quick version of this from a Louisiana
12:55perspective.
12:56And most other states are like this, too.
12:59You and your wife have a house together.
13:01You own one half, your wife owns one half.
13:05Well, your one half of your half a million dollar house is only $250,000.
13:11We factor in all the other little things and assets that you may have.
13:15If it doesn't reach that million dollar threshold, there's no tax to your children.
13:21See, it's really only you we're dealing with.
13:24We're not dealing with the house is a half a million dollars.
13:28We're not dealing with a half a million dollars.
13:29We're only dealing with $250,000 because it's just your estate that we're dealing with, not your wife's.
13:33So, again, I would suggest, if you're doing it like that, an LOC.
13:41Otherwise, if it's just one house, just write your will and pass it like that.
13:48Anybody else before we move on?
14:10I'm saying you use an LOC as opposed to a trust.
14:27Depending on where you are, I'm telling you to use your LOC instead of a trust.
14:33It's easier to transfer property via LOC than it is a trust because your property is actually locked into the
14:41trust.
14:42As opposed to an LOC, you can transfer in and out.
14:46You can leave the LOC to whoever your person is or your beneficiaries in your will.
14:52That's what we're actually saying here.
14:55Hmm?
14:56If you put an LOC, how does that protect you from probate?
15:01How does that protect the family from probate?
15:05Pogba?
15:07So, no matter what, you're going to have to go through probate.
15:11It never transfers unless you go through probate.
15:15See, that's the big misconception I think people have in that when you're doing this, you're protecting things from probate.
15:21Yeah, if the LOC, if the trust owns the property, and I think that's what you're trying to say.
15:29All right, you're saying, look, I've got the house in trust.
15:32It's locked in trust.
15:33To that perspective, you don't own it, so it will never go through probate because it's in the trust.
15:40All right?
15:42I'm saying to you, depending on what you have, that's not the way I would recommend that you go.
15:48Simply because, again, you weren't here, so I'll say it to you.
15:53Like, you, as the owner, you're trying to protect from something that I don't think you need to protect.
16:00And what I mean by that is you're trying to preserve the house because you want it to go from
16:05this to this to this.
16:07The one rule that I tell clients all the time, why you living is yours.
16:13All right?
16:14When you gone, you ain't yours no more.
16:17Let it go to your kids.
16:20Let your kids, your legacy, now let your kids create their own legacy.
16:26As the parent, it's your job to put your kids in a better situation than you were.
16:32When you pass away and if you leave them that house, you just did that because now you have left
16:38your kid in a position to utilize the asset that you left them how they need to do it.
16:46In trust, I can't leverage it in the manner that I may need to.
16:49And when I say leverage it, hey, man, I may need to just do, I may need to pull $50
16:54,000 out to chase my dream.
16:56I can't do it like that in trust.
16:59That's why I'm saying to you, I'm not telling you not to do that.
17:04I'm saying to you, it's just not the way to go if, in my opinion.
17:12That's my time, guys.
17:14I'm sorry.
17:15If you want to reach me, I think they have my information on the web and I'll answer any questions
17:21that y'all have.
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