In the first episode of the Family Legacy Podcast, hosted by Michael Rutkowski and introduced by Kerry Guard, the discussion centers on estate planning, particularly guardianship for children. Michael emphasizes the critical importance of having legal documents in place to ensure children are cared for if parents become incapacitated or pass away. The key topics covered include:
Listeners are encouraged to seek professional legal assistance to ensure their estate and guardianship plans are effectively in place.
Transcript:
Kerry Guard 0:11
Welcome to the family legacy podcast, a podcast that goes beyond legal jargon and gets the root of how to ensure your past, present, and future are protected. This episode is brought to you by the Rutkowski Law Firm, Michigan's leading asset protection, estate planning, Medicaid, and Elder Law Firm. And here's our host, Michael Rutkowski. Michael, how's it going today?
Michael Rutkowski 0:29
Kerry, thanks for having me.
Kerry Guard 0:32
I'm so excited to have you. This is our first episode, folks. So buckle on up. Each week we are going to come to you and answer some of your burning questions as it relates to how to protect your assets and your legacy. Moving forward, we all have families we want to make sure that they're taken care of. And what better way to learn than throw an expert, an expert like yourself? Michael, so great. Great to have you.
Michael Rutkowski 0:59
I'm truly excited to be bringing this content, because every single week, we're meeting with families, and questions come up. And you know, some are the usual typical ones, but other ones kind of come out of left field, and they're just great for everyone to know. So I'm just excited to kind of talk together and let people know, like, what's going on in the estate planning world?
Kerry Guard 1:20
Yeah. Yeah. And you know, this is only our first one, so we're just going to take sort of questions that we've had in the field. But I do look forward to people chiming in. If you're listening and you have a question, don't hesitate to reach out to us, and we will be sure to have that answered on our next episode. That's what we're here for. We want to answer your question, so we're going to dive on in before we get there, I just want to say, you know, you got a lot going on. Kids are back at school. You just had your 17th year anniversary. Congratulations. Thank
Michael Rutkowski 1:54
You. Always, so many things going on. Always,
Kerry Guard 1:57
yeah. So what's top of mind for you right now before we dive in, yeah, I
Michael Rutkowski 2:02
Know a lot of things that, you know, kids back to school right now. It's been great to get back to a routine at work. Has been just amazing. You know, personally, I'm always focused on fitness, nutrition, you know, how to be a better dad. You know, those are kind of a lot of the podcasts that I'm always kind of listening to, along with getting better at my at my craft, too. So, you know, I'm always listening about estate planning, and financial planning, because they kind of weave in together. So those are a lot of the things I'm focusing on as we move into kind of our our busy season, you know, a lot of families. You know, once kids go back to school, whether it's college age, you know, whatever kindergarten we're starting to do. We're kind of in planning season again. You know, everyone took the summer off, and it's back into getting our finances restructured, talking about, what are, what are we going as you know, election seasons coming up here, what changes on the estate planning side, financial planning side? So there's a lot going on as we move into the fall here. Football,
Kerry Guard 3:03
Oh, who's your team? You know, that's an
Michael Rutkowski 3:04
Interesting one. So being in Michigan, I'm, I go both ways. I'm, I grew up a University of Michigan fan, my my wife and brother went to Michigan State. Feel like my kids are going to go to Michigan. So, I go both ways. You know, Michigan won the national championship last year. That was super fun to watch this year. It looks like Michigan, Michigan State, might have a go at the, the, the, you know, the competitive Michigan, Michigan State.
Kerry Guard 3:30
game, alright. Well,
Michael Rutkowski 3:33
Lions, all day, Detroit. Lions, let's go Super Bowl ballot.
Kerry Guard 3:36
I mean, I feel like you can't lose because you have all these teams that all have a shot at making it happen. So
Michael Rutkowski 3:43
It's funny how it goes in waves. You know, go. We're riding the clock five years ago and we had nothing, you know, I went to Western Michigan. I went to Western Michigan, and I was probably rooting for them five years ago because all the teams in Michigan weren't doing so well. So it's nice to ride this, this wave of good teams in Michigan. Again, again.
Kerry Guard 4:01
That's awesome. Yeah. I mean, I grew up in Pennsylvania. We have the Eagles for NHL, and then and the Pittsburgh Steelers, if you're on that side of the realm, yeah, and then, and then, from a college standpoint, it's really all about Penn State. So we got a few. We got a few as well. I appreciate having, like, what I put in which basket this week, although I think my Eagle stance would kill me if they knew I was both for sure, Pittsburgh is awesome. I could hang out with you all day, but we should get to it. People are on the edge of their seats, and they want to know you know for you, and sending the kids back to school. It sounds like guardianship was top of mind, and that was where we were going to start. So what is, what does it mean to create a guardianship? Let's
Michael Rutkowski 4:44
Dive let's dive into that. Because I think there are some misconceptions here, and people just need to know. You know, one of the most important decisions you'll make as a young parent is who would be the parents of your children if you couldn't be. And a lot of times we just assume, like, oh, well, I have siblings, I have parents, like, you know, they'll be taken care of. But the reality is, is that if something were to happen to you and you couldn't parent your child, whether you've passed away, or you become incapacitated, lots of situations could present themselves. You want to have some kind of document that says, What are your wishes when it comes to who would take over? Because how it works in the court system, in the US in Michigan specifically, is there's going to be a court hearing. The family is going to come in, the judge is going to have about five minutes to give it a go to trying to figure out who's going to be the best fit to be the parents, and then they're on to the next case. And so how, in five minutes is any judge going to truly understand your family dynamics? I work with families for hours on end, and I don't even scratch the surface to understand, you know, we all have our family dynamics, right? And so just putting that, putting it in place, a document, a guardianship appointment document, usually that's contained in a will, but it can be a standalone document to say, hey, if something happens to me and my wife, I want my brother and his wife to do it, or, you know, my sister or my parents, or whoever that might be, because otherwise, there's a statute in every state that says what's the order of priority, and that might not be who you want. So it's really important to have this done in advance, to say, you know who's going to be the parents of my kids. I
Kerry Guard 6:36
feel like I remember you saying to or reading somewhere that it's even if you're separated, like, even if it's a short stint, and it's not necessarily,
Michael Rutkowski 6:47
Well, there's a there's a lot to think about when parenting kids, let alone, like, the actual parenting of kids, but you have the ability, a lot of people don't know this as well. Like, let's say you're going on a way trip, couples away. The trip, no kids. And grandparents are watching the kids you want to sign a temporary delegation of authority. Document, simple document. It says, I'm granting grandma and grandpa the ability to treat my kid and make parental, parental decisions because I'm gone. You know, they break their leg and they need to go to the hospital. Who's going to be signing off on that? Your caregivers need to have something in place to give them that authority. Otherwise, they can't do it. They can in an emergency situation. They don't have the ability. So that's regardless of the guardianship appointment. It's responsible to put something like that in place, and you do it each time because you can appoint different people. It's for a temporary period of time. So let's say you're going away for a weekend. You just say this document only works Thursday to Monday or whatever you're doing. But something like that is incredibly important so that whoever you're entrusting your kids with while you're gone can do anything you could have done if you were there. So it's another thing parents need to be thinking about. And just
Kerry Guard 8:04
to be clear, those are two different things. So you have the guardianship, is it? Yeah, somebody takes over permanently. And so, yeah. So if you, if
Michael Rutkowski 8:13
You work with our office, essentially how our process would work is, that we'd get an estate plan in place, and we'd have guardianship appointments. Now these are there's two things to think about. There's a temporary guardianship and permanent guardianship. So let's just hypothetically say something happens today. We want someone to be able to take custody of our children for a short period of time until a judge puts that final guardianship in place. And that may not be the same person depending on geographical location of you know, maybe your siblings are out of state and they're who you want to take the kids, but mom and dad are close, and they need to be able to make decisions for the next two weeks. So there's a temporary Guardian, and then there's a permanent guardian. Lots of times it's the same people. Sometimes it's not. But through the estate planning process, we'd have that all documented and laid out. But also the families would get a couple of these delegation of parental rights forms so that they have those on standby, and then they can just fill them out as needed. They can either swing by our office at a bank or anything to have them properly notarized. But those would give your caretakers, for that short period of time, the ability to act if something came up.
Kerry Guard 9:25
Okay, so just as an example, when I was living in Seattle and we didn't have any family near us if something happened to me and my husband, I may have needed a short-term guardianship in place for like, our very best friends down the road to take the kids until, like, my mom,
Michael Rutkowski 9:44
Yeah, would have, yeah, your situation just begs for this, because you don't even have family nearby, because sometimes you know they'll, they'll hand the police or whoever will hand off to a next of kin. Or a family member, just as we're sorting this all out. But if you have no family nearby, what's going to happen until mom gets in town, you know? And so that would be a really, a really important document.
Kerry Guard 10:15
Let's talk about the process. So if you wanted a guardianship, does it have to go with a big estate plan as well, or a trust plan, or can it just be on?
Michael Rutkowski 10:25
Yeah, typically the guardianship appointments. So picking who you want to take your kids would happen inside of a will. Now you might end up doing trust planning, but even if you're doing trust planning, there's still be that will for that guardianship appointment, because that has to happen through court order. So under a will or a standalone document, will be that guardianship appointment, because it has to actually go through the court system to be finalized, a court has to approve it. They do have the ability to, you know if, if someone else, maybe even your kid because at the age of 14, a child has a lot of say in like who they want to take care of them. So you might actually have a guardianship appointment in place, but if your kid is 16, over 14, they have the ability to come to the court and say, Hey, really, I know my parents wanted my their uncle and aunt over here, but I get along so much better. And here are the reasons why I want to be with this aunt and uncle or these people, or whatever they can present their case as to why maybe it should deviate a little bit from what the parents chose.
Kerry Guard 11:33
Wow, that's a big responsibility. Yeah, yeah.
Michael Rutkowski 11:38
So there's lots going on here. I mean, you know, this is why it's so important to not only have the guardianship appointment in place but have these conversations as a family. You know, I can't tell you how many families kind of just, they don't talk about, they don't want to talk about death, so we don't talk about these things. Because if some people think, if you talk about it's going to happen, but you need to, you need to have these conversations, because the planning only goes so far, but if everyone is on the same page, it just works so much more smoothly. I Zoom has just been an absolute blessing for estate planning because now when we're working with families, we have a son in Colorado and a daughter in California. We're all jumping on the Zoom call. And everyone is a part of the planning. They know what's going on. They know where to reach us in the event of an emergency. It has changed the landscape of estate planning in such a great way. It's not a lot of things that came out of covid on the on the positive. But this was one of them, for sure, for sure, definitely.
Kerry Guard 12:45
I didn't even think of that in terms of having people in multiple states and being able to bring them together to plan. I think that's so important, especially when you're talking about guardianship and how to move kids from one place to another, and what the plan's going to be for that. So that leads to my next question in terms of, well, it's twofold. The first part of it is, what is a guardian even? What are their rights and responsibilities as a guardian taking over now.
Michael Rutkowski 13:14
Karen, we could do this all day. How long do you want to do this? We could go for hours. I love it. You know, essentially, when you're putting in place a guardianship, that guardian does not have personal responsibility, as long that we get asked this all the time because we work with not only for minors. I know we're really focused on minors here today, but we work with a lot of incapacitated individuals as a result of the aging process. Guardians always want to know, like, what am I personally responsible for? Responsible for if I take on this job, and as long as you're acting in the best interest of the individual, there's no personal responsibility here. Let's throw some terms out there that we need to define, though, because they kind of get thrown around. There's a guardian and there's a conservator. The Guardian takes care of the physical well-being of the person, and the conservator takes care of the money side of things. So okay, so we got those two in play, usually for adult incapacitated individuals, we're usually getting both appointed guardian and conservator. Minors don't really have anything yet, so that might be a trustee that's managing some funds for things like school and medical and all that, and the Guardians just doing the everyday stuff. You don't need a you don't need a conservator to manage the lunch money. It's just really like larger assets. So usually for a minor, it's just a guardian, but no personal responsibility there, but they're essentially the parent or the child. So it's going to be on them to make sure that they're getting proper schooling, proper you know, if they're not, if, if a parent could get in trouble for something, The Guardian could get in trouble for the same thing. If that makes sense, you're actually taking on that role as a parent, parent, and guardian. It's a lot.
Kerry Guard 15:00
That is a lot. How do you choose? So, how do you choose?
Michael Rutkowski 15:05
Factors? You know, I don't have a right answer for you on this. I'll just tell you what I hear people discussing when we're picking a lot of times. There are some geographical situations we're talking about. You know, all its studies have shown that it's best for a child to maintain as much status quo as possible in tragic events where, like, let's say parents were in a car accident or something. So we're kind of thinking through, okay, who would be best to kind of leave the kids in the same school system? We don't want to uproot them and move them, you know, I'm in Michigan. We don't want to move them to Florida or something like that. So those are a lot of times like, what people would provide the most similar school system relationships. You know, you don't want to uproot them from their friends as much stability as possible if something were to actually happen. So that goes into it a lot. You know, a lot of times I hear people talking about the responsibility level of their siblings. So, you know, sometimes they're like, well, these siblings, they're like, you know, financially more, you know, savvy, and they're savers, and they parent like we do. And then they're like, Oh, my other siblings, not a chance, right? So those are the things that kind of look to like who are most similar to us as parents and parenting style that happens a lot. I see a lot of people when they're having young kids, they'll first choose their parents as guardian conservators, and then later, as their siblings mature, they might move the siblings. But know this also, you can also have backups appointed to see. I told you, we can just keep going forever on this. When you do the appointment, you can have a backup in the event you let's say you appoint mom and dad today, and your kids are two and four, and 10 years down the road. Mom and Dad now are like, 75 and they're like, this is just way too much for us. So they can tap out and say, you know, appreciate the thought, but we're going to go, we're going to pass and go to the next people, and maybe, you know, in the documents, we have the siblings as backup. Another thing you need to think about is, could that couple, Could one of them act alone, like, Okay, I'm appointing my mom and dad, but there's no way my dad could do this by himself. My mom could do it. My mom could handle this all by herself. So in the document, we'd say my mom and dad or my mom alone. But not a chance you know that my dad could do this. So No, no, no, not having my dad, not happy for my dad, so, yeah, I mean, you can see there's just, like, a lot that goes into thinking this through, and that's where really our job as attorneys to counsel families through this, to help them make these decisions. Um, in anything that we do, we usually are working through the families with, like, how to process this and think about it. Okay, go away. Think about it. Talk about it as a family. Let's get back together and make those final decisions because it's a lot. It'd be a lot to make all of that in just one meeting. So usually, when you're walking through the process with us, it's usually anywhere between, call it four and six meetings to kind of, we like to break it up into little chunks so that it's a little bit to think about. You know, let's talk. Let's figure out where our assets going today, and then next time, let's talk about who's going to manage this all and our minor kids. And there's a lot that goes into all this.
Kerry Guard 18:32
For sure, there are a lot two final questions. I know we could do this all day, and maybe we'll do a part two, or maybe you have your own questions, and you could pop those over to us and we look forward to potentially answering them. I want to first talk about when you're 14 or over, you have some say on where you would like to go based on what your parents have requested. But what about if you're younger? Do we as parents need to be sitting around you said that there should be a lot of conversation that's going on. So is it appropriate for me to sit down with my eight-year-olds and have this conversation of, okay, let's talk about this? If something's to happen to me and Dad, we want to make sure you're taken care of. And here's what we're thinking about. How do you feel about that? I mean, is that that feels like, yeah, it feels big.
Michael Rutkowski 19:17
Does feel big. And that's hard to say. It really is. I think every family is a little bit different on what they want to talk about, you know, and we work with every extreme, from like a couple doing planning that they don't want a person to know about anything and have and keep it very private to the family that literally everyone's on the call. We get on a Zoom call, and it's the Brady Bunch. We've got the whole screen going, and that's cool, too. I think every family dynamic is a little bit different. I think, at minimum, with this appointment, trustee, and stuff are a little bit different. Someone could pass and, you know, it's just, you know, you can delegate a lot, too, in a trustee role. Well, you can hire attorneys and CPAs to help with it all. In this role, it's probably appropriate to have that conversation. You know, hey, siblings, if something were to happen to us, would you guys be open to being the guardians of our kids? You know, I think that's fair. If you're not really in the mood to have that conversation, then I would just put a lot of backups because gives those people the ability to say no.
Kerry Guard 20:27
Well, I also imagine that if they say yesterday, 10 years down the line, their circumstances could change. So having backups regardless is probably a good idea. Yeah, in
Michael Rutkowski 20:36
Everything we do, we like to have at least two to three backups. I think a lot of families, you know, as much as we want to meet with families every three to five years just to see what's changed in their life, a lot of times, estate planning is kind of a set-it-and-forget-it thing for most people, you know, I did it, we're covered. Put it on the top shelf, in the closet, and let's not think about that again. Yeah. So we try to do planning with as much. What Ifs to say? Okay, even if this plan isn't executed for 30 years, like, would this still make sense? And then, obviously, once the kids age out, the guardianship stuff just falls off. You know? You know, if once the kids get past 18, then it's then all that falls off, all that sense, yeah, and so when we're working with younger families, probably, you know, like I started in this conversation, the most important things that families are going to make who are the guardians of the kids? And usually, we should be structuring a trust to say, how we want to structure the distribution of assets and not just give it all to them early, right? Because I know for me, if, like my kids were to get any money right now, life insurance proceeds, whatever it's, iPad games all day. They love it. They wouldn't say for college, retirement, nothing. IPad games all day. So putting, you know, putting something in place that says, you know, they can have it for health, education, maintenance, and support until age 25 you know, let them mature a little bit. It can be used for college and all those things. A down payment on a house, whatever you want to set up. So those are probably the two most important things, tips that I can give to parents with minor kids.
Kerry Guard 22:19
Think we should come back to on a well, circle back, folks on the, trust on the, yeah, let's do that. Trust planning as it relates to this because I have so many questions. It'll be good before we close out. I do want to know what happens if you don't have this in place. I know this is really scary to think about, but I think it's important for us to understand,
Michael Rutkowski 22:42
Yeah, so it gets wrapped into the probate court. And so most families are coming to us with a wide variety of issues, but the main objective, most times, is to keep it out of the court system because here in the US, it's time-consuming and expensive. You know, usually, you're looking especially in a decedent state, meaning someone's passed away with no plan in place, and it has to go through probate, you're going to end up spending anywhere between five and five and 10% of the assets just to get it transferred through probate. But not only that, everything's locked up for anywhere between nine and 18 months. So it it just is very problematic. People want to avoid all that, so usually we're doing some type of planning to keep things out of the court system. In a guardianship case, there are delays that happen all the time with guardianships. You know, you're probably not going to get in front of a judge for at least a month. So there's that month time frame where where nothing is no one can make decisions for these minors. Who's, who are they going to live with? These minors are in like, Limbo, of like, who am I going to live with? And how is this all going to work? And all interested parties receive notice that there's going to be a hearing on, you know, call it whatever, January 5. Everyone comes to court, and you can tell us why you should be guarding of these kids. And then the judge gets to figure it out in five minutes. That's kind of how it goes down, kind of how it goes down. So, you know, having these documents in place, it's more of just a the judge stamping their approval on what you picked, versus talking to the whole family about who should do this.
Kerry Guard 24:22
all right. Well, I'm gonna go get a guardianship put in place immediately. Um, so important. Thank you so much, Michael. If you liked this episode, please like, subscribe, and share, and if you have any questions, as I mentioned, please email us at Rutkowski Law Firm. I always get those letters referred.
Michael Rutkowski 24:44
Yeah, sorry. We're gonna, we're gonna put that either below or however that works. You'll see, you'll see how to get Yes,
Kerry Guard 24:49
you will. Yes, you will. Or you could always head to the website and give us a call, either way, we are here for you. Thank you all so much. We'll see you next time.
Michael Rutkowski 24:56
Take care.
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