Trust Part 2: Estate Planning | Zach Miller, Sam Acho, Jeff Locke, Riccardo Stewart | NFL Players’ Podcast #22
Enjoy NFL Players’ Podcast? Leave us a 5-star rating & review to help others like you discover the show!
A key component to creating multi-generational wealth is having a plan to pass on your wealth to the next generation.
In this episode, the AWM Football team, Sam Acho, Zach Miller, Jeff Locke, and Riccardo Stewart begin discussing the importance of NFL players setting up a Trust and having proper estate planning.
For questions, you can reach out to Riccardo Stewart at +1 (602) 989-5022.
+ Read the Transcript
Riccardo Stewart (00:11): Hey guys I wanna welcome you to another episode of the AWM NFL podcast. My name is Riccardo Stewart and I'm your host. And as always, I'm joined with three of my good friends, coworkers, and we're just enjoying summer and different places. It looks like Sam's at home in Texas and Jeff is in LA and Zach is in Phoenix, but it looks like he might be ready to leave because I am also from Phoenix and I'm not there. I'm in a hotel in Newport because what people do at this time of the year is they leave Phoenix to get out of the heat. And so this is where we are.
And we're going to just pick up on our last podcast, which we talked about trust and the importance of trust. And then today we're going to talk about when it comes to trust, estate planning. So last episode we titled Trust Fund Baby as we talked about trust. And so I'm going to start with the professor and go, Hey, what again is a Trust Fund Baby and what are we talking about?
Jeff Locke (01:00): Yeah, trust fund baby, you don't gotta work, right? Your parents or maybe your grandparents or their grandparents accumulated enough money where their money just sits in these trusts and you get to just pull money out for the rest of your life. So you don't need to go and do your own thing. You can just pull it as you need it.
Riccardo Stewart (01:17): And we talked about like the importance of trust and how, why NFL players need them and when they need to get them and establish them and so forth. But there's another language or words that are used and that everybody's familiar with, and that is estate planning. And so first, I'm going to just start with you, Sam. I love doing this 24 year old Sam Acho doing whatever it is you're doing at 24. When you hear the phrase estate planning, like what was the first thing that just came to your mind?
Sam Acho (01:44): Well, at 24, Ricardo, I was actually doing estate planning as a going into my third year in the NFL and I had a financial advisor and they started having this conversation about estate planning. And I'd heard the phrase before, but I didn't know what it meant until I sat down with the lawyer and my financial advisor. And they were going over stuff like, Hey, when you die, who do you want your money to go to?
I'm like, when I die, I'm 24 years old, I'm just starting living, you know, but it was this thing of like, hey, I'm not trying to, you know, no offense, I don't want to wish this on anyone. But these are important questions that need to be answered. What happens with your estate? Now as a 24 year old, 30 year NFL linebacker at a good amount of money, a good amount of assets, a good amount of things that if something were to happen to me, and I was actually getting ready to get married, so me and or my wife, what happens to our estate? So at 24 years old, which sounds crazy, but I was actually making some of these plans. But the initial feeling was just shock of why am I having this conversation? And then it turned from why to, oh, wow, I need to be having this. And probably more guys need to as well.
Riccardo Stewart (02:51): Yeah, like for me, when I hear a state, it's like usually though, it's like you're going to your friend's house who's on your club basketball team and he's having a party and you're driving up some hill and you're like, it's such and such a state. By the way, the code to my gate is such and such. Like that's what I think of. But Jeff, like realistically, when we're talking about estate planning, like what is estate planning and then where do trusts fit with inside the estate planning?
Jeff Locke (03:15): Yeah, great question. And Sam really teed me up here. So first, what is an estate? Estate, just think of it as your net worth. It's everything you own. That's your estate. And then estate planning is pretty much three different parts. First one is what you want to happen with everything you own when you die. You're going to write that out in your trust. Also in that trust, point two, who you want looking after your family and handling passing out your assets when you're gone. And the third thing as part of estate planning is how you want to be treated if you're not mentally or physically able to make decisions for yourself. You can elect to have certain things done or you can appoint someone else to make those decisions for you.
Riccardo Stewart (03:58): That's good, as I would expect, Jeff, that's why I asked you. Not that I wouldn't expect any less from you, Zach, but I'm gonna ask you a question as well, just sticking with trust. What's the difference? Explain to me, revocable, irrevocable, revocable, is one better than the other and why?
Zach Miller (04:17): Yeah, so there's a lot of different types of trusts. The standard one, the easiest one to get set up is a revocable living trust. And sledge has means you can change it at any time. And then the other one's irrevocable, meaning once that's established, it's set. You cannot pull the money back into your control. And so they're just different tools for the job. It's why the estate attorneys, they bill like $500 an hour because they're setting up these complex, essentially legal agreements so that your money, your heirs, your trust fund baby that they're all taking care of. And so the easiest way to think about it is there's a right tool to kind of deal with an estate tax. So maybe you're setting up an irrevocable trust because guess what?
The government's coming back for even more tax money from you if you die with a certain level of assets. And then that revocable trust is kind of to ease that estate planning process so that it's legally bound whoever is essentially inheriting your wealth, they're legally bound to take care of all the people in the trust. And so very standard to set up, but something that once you have enough money, you should and want to go get this done. And trust me, like I had to do it myself. You don't ever want to think about yourself dying. I mean, it's one of the worst things to have to plan out. Start at the end, like, oh, okay, I'm dead. Like what happens? But it is like something that's important to go through. So just bite the bullet, get it done.
Riccardo Stewart (05:46): Yeah, those are tough ones and you gotta be able to answer those questions. Jeff, talk about what happens if you don't set it up and if it's not set up properly. We gotta talk about the pitfalls and so if you can explain those.
Jeff Locke (06:01): Yes, what happens if you die without a trust or any estate planning done is essentially a court is going to decide and a judge what happens to all of your stuff based on whatever state law either you're a resident of or you died in. So you end up paying a lot of extra fees when you do this, right? You got to pay attorneys and you're not paying them, but the money's coming out of what would be going to your family. If you have to go through this court process. The other problem here is it can take months or even years for your family to get access to any of your assets or your money. Whereas if you go through the estate planning process, like Zach said, like it's kind of written in stone, you signed off on this stuff and all of that can happen much, much quicker and get to the right people. And it will also be much cheaper for you than the alternative.
Riccardo Stewart (06:51): Yeah, so I'm hearing, you gotta answer the questions of what happens when you die. You wanna make sure you have the right trust. There's so many trusts, what's the right trust? Jeff, you gotta make sure that it's set up properly so that you're not putting a burden on your family, the people who you want to receive it, and they can receive the most of it. That's a lot. And so Sam, I mean, I got three more questions, right? Well, for you, for Jeff, and for Zach. And I'm gonna start with you, Sam. It's like, what kind of, this is a heavy responsibility. What type of advice, just walking through guys, about thinking through this. What kind of advice would you give?
Sam Acho (07:25): The first piece of advice that I would give for someone who has made a good amount of money or has a good amount of wealth, especially when you're young, is to go ahead and go through the estate planning process. Even if you're 22 or 23 or 24, some of the people that we work with have $100 million or they're going to have a couple hundred million dollars. And if you don't work on that process now, you may be surprised a little bit later. And so I think just the first piece of advice is work on that estate planning process as soon as possible. And that's part one. Part two is don't be afraid of it. I remember when I first started thinking about the process, I didn't want to go through it, but it was really simple of, hey, like Zach said, let's start at the end, right?
Think about your children and their children. Maybe it's friends, maybe it's family. Who do you want to help take care of? And so think about it in that way, of a way to actually serve people. And then part three, I think I'd really just sum it all up by saying, not only not to be afraid of the process, not only to make sure you do the process, but embrace the process. It may be a one -time thing. You may be able to go and make a couple of adjustments as you get older. Maybe you have more kids, but start the process now and embrace the estate planning process. It could pay off huge dividends down the line.
Riccardo Stewart (08:41): Yeah, well, speaking about the process that leads me to you, Professor, what are the steps that need to take place in order for this to be established?
Jeff Locke (08:48): Yeah, it's really pretty simple and it should start with your financial team. So people on this call, that's how we start our planning process as we talk to our clients about their situation and what we think they need. Then we go out and we help them find the correct estate planning attorney based on the state they live in or maybe they live in multiple states and we got to find the right attorney for the fit with that client. We then help make sure all the documents get signed.
Then once everything is in place, we the financial team or your advisor should be helping you change all your financial accounts to match your new estate plan and also help change the title of real estate, all the little things that need to be changed after your new estate plan is in place. Sounds super simple, but kind of as Sam mentioned, like some of these are really heavy decisions, right? It can take a couple of weeks, a couple of months to really go through all this, get it right and get it executed.
Riccardo Stewart (09:42): Last question, Zach, and it's piggybacking exactly what the professor was just talking about is, I mean, who should I expect to help me set all this up? Is that my advisor's responsibility?
Zach Miller (09:50): Yeah. As Jeff just said, like your advisor should come in and help. It's a lot to know whether you're talking about an executor, a beneficiary, a trustee, there's all this new language and all you're trying to do is make sure that you're set up as best possible. And the advisor, I mean, I do it all the time, sit in with the estate planning attorneys, make sure like if anything's unclear or even just I know their situation really well financially so I can help weigh in on places where they might want to get something done, but they don't know how to communicate it in a state attorney kind of language.
And so getting that process done. And then the other thing, if an estate plan gets stale or you don't just look at it every year, like it should be constantly be updated because life changes. You get married, you have kids. There's all kinds of changes where if you're not constantly looking at that and that's an advisor's job to make sure that they stay on top of the estate plan because it is living and breathing and it needs to be updated whenever life changes.
Riccardo Stewart (10:58): We say this a lot and we quote, you know, the Eastern philosopher, notorious VIG, and that is more money, more problems. When really it's more money and it's more complexity. And when there's more complexity, it necessitates clarity. You got to make sure you have advisors and a team that understands how to bring that clarity to you. And so anything we talked about in this podcast or any of the episodes that you hear, if you have any questions, please reach out to us. Our number is 602-989-5022. Again, that's 602-989-5022.