Who Benefits from an Estate Plan with Amphay Champathong

Interview Transcription

ADRIENNE: 
Welcome back. And thanks for listening to the Team Lally Real Estate show home of the guaranteed sold program. We’ll buy it I’m Adrienne and I’m still Attilio and I’m Hawaiian. And if you have any questions, just give us a call at 7999596 or check us out online at Teamlally.com.

ATTILIO: 
Well, hey everybody, our next guest who’s our next guest, or actually this is not our next guest. It’s the main guest is he came to Hawaii with his family as refugees from Laos after spending a couple of years in a refugee camp. He grew up in Kalihi, attended Kalani High School and completed his college education and University of Hawaii.

ADRIENNE:
He has a BA in Sociology, Master’s in Social Work, and Juris Doctorate at the William S. Richardson School of Law. He’s a member of the Hawaii State Bar Association, practicing in a state He planning and serving as a Guardian-ad- Litem. Please welcome our guest, Amphay Champathong.

ATTILIO: 
Amphay! Hey, are you there? Aloha, welcome, Kelly. Oh, yeah. Here’s the first question off the bat. Let’s just hit him. It’s like, like the cheerleaders on the sidelines at the football game, hit him high, hit him low. Give him a question right off the bat. So let’s go right away. Estate planning, what we’re and explain it to me as if I was an 11 year old. What is estate planning?

AMPHAY:
Estate planning is an exercise in your liberties, if you value your privacy, if you want to be able to control you know, the reason why we work hard at Attilio is because we want to provide for our family. And in the event, something happens to us that it will help us. And when we pass away, yeah, that it will be transferred to our children. If you want to see that happen, and control that, then you must do your estate plan. Yeah.

ATTILIO: 
Yeah, you know, I, this is an actual, I feel like it’s like, there was like an FBI TV show. And it was like, there are many stories in the Windy City. And here is one of them. So I’m going to share one of those real life estate planning situations, we just talking with the client last night. So it’s her and her sister are going to get proceeds from the sale. This is from the dad’s property. But then the niece. The dad put in all these stipulations, I think, whatever she’s gonna get like a minority percentage. 20% Yeah, 20%. But he had stuff in there, like she had to have on certain GPA only goes

ADRIENNE:
for educational expenses, but she has to maintain a certain GPA or she doesn’t get any of the money. Yeah. So like, there’s strict requirements. And then one of the sisters is the one that’s in charge of the money.

ATTILIO:
The executor, yes. And so I thought that was real life example of the Father with this with through his trust, putting in some very specific instructions. And so Amphay, when somebody puts in those kind of instructions, can the people just blow it off and do whatever they want?

AMPHAY: 
You know, and this is why it’s important to go and see the help of an expert that is in this area, because it actually works both ways. He just shared how, you know, as the individual, as the parents that work really hard, I do want to be able to set conditions as to how I want my beneficiaries, my children’s to inherit, you know, the things that I’ve worked hard for, at the same time, there’s also should be some flexibilities in the event that, you know, things don’t go as planned. Now, do we have enough discretion that we provide to our trustees in order for it to benefit our children? So that’s a question but what I’m gonna say is, it’s important to have that discussion so that way I can share with my families Yeah, you know, what are the upsides what are the drawbacks? What are the consequences and all these different so that way now our families make well informed plans for their families. I

ATTILIO: 
think it’s just also to Adrienne is this Do you think this is like a topic everybody’s like up? Let’s talk about what’s going to happen after I die?

ADRIENNE: 
No, people don’t really like to talk about it. It’s not like

ATTILIO:
you’re getting a lot of hit getting a lot of views on Instagram, Tik Tok. Hey, this is what they want to happen when I die. And everybody’s like, chiming in. No, no, because

ADRIENNE: 
I have seen people like put stuff on Instagram about making sure that your, you know, your property is protected by a trust. Well, I guarantee you, they’re not but they’re not a traitor. Yeah, they’re not attorneys. Like Amphay. Well, it’s being triggered

ATTILIO:
because something happened or a relative this or that. And it was one big fight at the funeral. You know, like, Man, I wish we had that spelled out. Well, I

ADRIENNE:
mean, there’s the passing away, but then there’s also the asset protection. Yeah. So, Amphay, can we talk about, you know, that part of the estate planning? Well,

ATTILIO: 
let’s go to the next question, which is, can you explain to us what is a trust?

AMPHAY: 
You know, I just wanted to add on a little bit, I know we talked about individuals passing away and what happens to their assets I, I think something as important or not even more costly, in terms of unintended consequences is when we fail to prepare. And then now we are incapacitated. Most individuals will go through some On period of incapacity before they pass away, some much, much longer period of time. Now, if you don’t do your planning, during these incapacity, the only means as to how your family will be able to access your assets, your account to help support your needs, as well as your family’s needs is through a conservatorship. And to me, a conservatorship is much, much more time consuming, and expensive. Yeah, you think about this Attilio, you could be I had a client can’t call me. And he had to take care of his mom who was in a nursing home for 10 years, she was incapacitated for 10 years. If there were no planning done, that means 10 years, they would have to do an accounting with the courts, which is required by law. And if it’s costing you $5,000. And that’s pretty low and conservative $50,000 unnecessarily being to go to court, just to let the court approve, you know, your accounting of the, you know, the conservatorship, so, very, you know, yeah.

ADRIENNE:
Well, I really I like, I mean, I’m a client of Amphay’s, and he’s, you know, sits you down and takes you through the process asked a lot of questions. So, can you share with our listeners a little bit about like, what to expect, as they’re sitting down doing this planning?

ATTILIO: 
What kind of areas? Yeah, what kind of areas of discussion are you going to be talking about with them to help them flush this out?

AMPHAY: 
Yep, to sitting down the, like, no obligation consultation, it’s so important. We pride ourselves at the firm to educate our families, as I aged and you see, yeah, we sit down, we talked about this, we talked about it, because it’s important to know what’s important to you, and to your family. And then that way, we can have a go back to well informed planning. So that way you understand, you know, if this scenario happens, what’s the likelihood what’s the, all the unintended consequences, your options, and then at the end of the day, you know, we’re told me, as your attorney, help us know, what, and how you want to control your assets. So we have conversations about business, we have conversations about, you know, the makeup of the family, the health of the family, the well being of the family, who’s in the faculty, because sometimes we you know, in these meetings, have boundaries, or husband and wife would always joke. That’s the kids that I know about, and they go well, it’s important to really know who your descendants are. Your children are. Yeah, that makes a big difference. Well,

ATTILIO: 
you know, every time you fly southwest, they tell you, with the oxygen mask on you first, and then your favorite child. So you can you can take care of that favorite child to say always do the show. No, you got to take care of them all. But the other thing so our good discussion, no children. Yeah. Well, the discussion I’m worried about, yeah, you want people to know how many kids you got? Oh, I got three that I know of, Am I Oh, what? Take it easy, sailor. But anyway, we’re going big picture and then we’re funneling down. So the big picture is estate planning. The next thing in the funnel is the trust. Let’s talk about the flip side of if you don’t have a trust probate, What is probate.

AMPHAY:
So probate is a court proceeding where the court will appoint a person called a personal representative, this personal representative would be responsible for administering basically paying the tax payment, that thing, whatever is required for that individual that passed away, and then what’s remaining, there is going to be, you know, distributions for the heirs of the estate, what’s left. Man unnecessary. time consuming, a waste of resources, because it is costly, and there are many, many drawbacks when you do get yourself involved with probate. The two biggest, biggest things that come to mind right now is the fact that one it’s a public proceeding. Yes. And it’s really an invitation for flight. We’re now the general public, your family, your extended family and nearly find out so and so passed away. Here’s the court date if you have any claims whatsoever to the state, please come forward. Yeah.

ADRIENNE: 
So Amphay with the with the probate, on average. How much more does it cost the estate’s because of this probate process versus, you know, like having the trust and having everything all protected and spelled out?

AMPHAY:
Depends is probably a bad word that you don’t want to hear, right?

ADRIENNE: 
No,

AMPHAY: 
what I would say is this. If you’re looking at a simple probate simple meaning nobody’s fighting, you know, you have one property. You know who your children are, the descendants are simple probates would cost about six to 8000. And simple is an ad put those PVC mean, I’ll put those quotations simple. What we think some, it’s simple. When you start looking into it, it gets much, much more complicated. Yeah. Well, I talked about it being you know, public proceedings and people fighting. I like the sharing the story of prints. I shared this with the guy right. When he passed away. He he did, he was

ATTILIO: 
me, that was the artist formerly known as Prince.

AMPHAY:
And he didn’t have his estate planning event. He had no real hair, no trust, he had nothing. And then so again, it became K he passed away. So who’s gonna show up? Yeah, well, when that happened, 45 people showed up. They had people claiming to be his wife, his spouse, his children, he says is that however 45 people

ATTILIO:
I think I missed it. Cousin. Can I can I get some? Can I get some piece of that still?

AMPHAY: 
No, they narrowed it down to finally they got down to six. Yeah. And you know, it took so long that two of the six beneficiary or, or inherit, you know, actually passed, the heiress passed away.

ATTILIO: 
was taking so long.

ADRIENNE: 
So now for those four people that are entitled now with this whole process. How much did that end up costing his estate?

ATTILIO: 
Millions of dollars in legal fees?

AMPHAY:
Well, yeah. Initially, they had valued in the theater a lot. 300 million. Yeah. Wow. By the time it was distributed to the heirs, they got about a little over 10 million and wow. A lot But however, this thing was worth 300 Then it came down to 150. Then you go all the legal fees in court? I think I was, I would say five or six years. That’s how long it took something

ATTILIO: 
interesting about Prince Well, a couple things he he lived in. I think it was Minneapolis St. Paul Minneapolis, Minnesota. His house look it would look kind of cool, but it looked like a two story like warehouse very industrial looking. He died in the elevator in his in his place and you know, something to do with something anyway, I don’t I won’t speculate on that. But he died he was found in the elevator knowing he was alone. It found by his one of his assistants, and then he had a safe I heard this on a podcast, he had this safe that you would find in a bank and this safe is so difficult to get into because nobody knew the combination. That would have been something to put in a trust document. Nobody knew the combination that there’s like one of five safe crackers on the planet that can get into this thing. And if you screw it up, you literally going to have to dynamite the door open because it’s just so ingenious how this this safe door was created. This is the kind of like a vault like you walk into I’m not talking like a floor safe. And in that safe was a room which shelves full of songs that credit that Prince had recorded but not released. You know how much that is worth if he had just spelled it out. But you know, the other thing I want to ask you is a lot of times people think oh, I’m like Mr. Kham aka Viva ole in the Mr. Santo li song by Keola and component Beamer. Do you know that song?

AMPHAY: 
No, I do not. Would you say that? Oh speaking? Yeah,

ATTILIO: 
Mr. Sun, surely somebody else is killed on propodeal Beamer and they it’s a very humorous song it talks about all the ethnicities that we have here on these islands and all the prejudices and stereotypes, but well, he may have done one version of it, but I’m looking it up and it says play it. It says Keola and Kapono Beamer. But anyway, they you know, they go through all the different ethnicities and I always remember the Hawaiian one because I’m Hawaiian, and they go Mr. Kamaka Viva Olay get plenty nothing you know, cuz I was at an event was the opening act, it was it was actually a real estate event and had the brought us and they open up that event by going, okay how many irons in the room and I think I was the only one in the room raise my hand and they go, okay, that’s why we lost the land because only had one Hawaiian in the room. But the point being is a lot of people, it’s a humorous point I’m making here with a very serious message. And that is that a lot of people think, oh, Illuminati, I shouldn’t make one trust. What’s the myth of that Amphay?

AMPHAY:
In know, that I hear from one of my dear friends, he asked me he recently passed away. And he is he does property assessment value assessments. And he said, in his 25 years of doing this work, you have seen so many Native Hawaiians lose their home, because they fail to protect the property. So we talk about protection, you know, there’s a couple of things that can come into play. One of it is, you know, protecting yourself in the event now, you pass away with regards to continuing to pay for whatever is remaining on the property. The second part is protecting the assets, right, and then the state. So you know, it’s, to me, I go every the modest income families, this becomes so much more important, because the cost would be significant in terms of us having to go through the probate process or the conservatorships and things like that, and I go, if you plan you’ll avoid all of that. And I go, you know, you spending 50 $100,000 In a probate proceedings, and you have one house I go, that’s significant in terms of what’s not less available for you and your family. So,

ADRIENNE: 
so Amphay, what is the family does not own a home, and they have children under the age of 18. And or a child that is special needs? What is the benefit of having that? Trust and the estate, the estate planning done? Yeah.

AMPHAY: 
So I’m going to actually speak of that together, okay, because we’re really talking about incapacity. So if you have a minor as a beneficiary, and they are a beneficiary for any types of account, so your retirement accounts, your life insurance accounts, your 401. They now they meaning the institutions are not going to release those funds for the benefit of your minor children. Because minors are deemed incapacitated by law just because of their age. That can mean that individual is special needs. Regardless if they’re a minor, or they’re an adult, they’re deemed incapacitated. And third parties again, like your banks, your your life insurance companies are not going to release the funds. The only need as to accessing this for the benefit of your minor children is through a conservatorship. Yeah. So if you have, you know, say a minor, that’s eight years old, what that would mean is 10 years, that child will be in a conservatorship.

ATTILIO: 
Okay, with a whole bunch of administrative costs seat. Yeah, the don’t go to the child.

AMPHAY: 
No, and this is just doing accounting. This is just an accounting and I go now, when we talk about the unintended consequences, when that child turns 18, the law requires the correct distribution of what’s in the font. So there is no way that the family now so you get to cross your fingers and hope that this child now that turns 18 somehow is financially educated, financially responsible to be to know not to waste in our firm we call it the baboos beneficiary, you know, that baboos as I speak about myself as well. At 18 If I came to $200,000 I go I probably be it’d be all gone.

ATTILIO: 
about it folks. What that kind of dumb knucklehead stuff he was doing when he was 18. My kids I had I was I when I first made the trust, they were kind of young so I said 25 for higher education and college degree, and they got to come home one papaya on my grave on my birthday, like papaya I should put that in there. Oh, you know, speaking of which, updating the trust, it’s been a couple of years. I personally recommend, I’m thinking like every five to 10 years, you should update it. Or if you like go buy like 10 properties, you should definitely update it. But how often do you think last question for you? And for you? How often should someone update a trust?

AMPHAY: 
If not update, they need to review it. Yeah, it can look at it. If you don’t need to make any changes. Leave it alone. That’s a peace of mind that you got from the planning. Leave it alone. Now, if you need to make changes, again, that would be good times to make changes, and we will contact our families, every so often have been changes in the laws, changes in the rules and things like that.

ATTILIO:
Okay, good. All righty. Well, thanks for being on.

ADRIENNE: 
We do have before we let Amphay go, I want to just make a quick announcement to our listeners. Oh, yeah. About SafeRide Hawaii sign waving. Yes. So there’s a sign waving for Azalia on December 23. From four until 5:30 Amphay, where can they go to? Can I just show up? Or how do they participate?

AMPHAY:
Yes, we are wanting the community support. SafeRide is important. Important. I think we have a great mission to keep our communities safe, especially during the holiday seasons as people celebrate. So it’s going to be right across the intersection coin into ice palace. That’s the simplest way that I can share that will be there from four o’clock to you know, it says 530 But it will be their later. So show up. Show us your support and our love for Azalia and this great work to keep our

ATTILIO: 
community our community safe. Yes. Thank you for that Amphay. Yes.

ADRIENNE: 
Thank you. Amphay thanks for being our guest. And I

AMPHAY: 
appreciate you guys. Thank you.

ATTILIO: 
You awesome. Aloha. Aloha. Aloha.

AMPHAY: 
Aloha. All

ATTILIO: 
right, so we’re wrapping it up. And well, real quick note. Azalia was someone that unfortunately was Amphay’s daughter got hit by a drunk driver. And so they started this nonprofit called SafeRide Hawaii. Yes, you can have them at your events. You can call them they bring two people, one to take you home. And once you take your vehicle home. So it’s an awesome, awesome nonprofit that is making not only you as the individual safe, we’re making our community safe. So please come out and support this remembrance of Azalia December 23 4pm to 530 and or later.

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