Tax Planning Issues in Estate Planning, with Jordan C. Parr

0:02 Welcome to [The Estate Planning Podcast] and while estate planning has a lot of important goals, preserving wealth, avoiding conflict, avoiding court, health issues, personal issues, one of the most common ones is taxes. Trying to minimize taxes to make the most effective use of wealth and transfers when possible. And we're excited to have today someone who I work with actually in this area. We have a couple cases pending where high net worth individuals either have or have not taken advantage of the law and the consequences of that in order to minimize their tax liability using estate planning. Jordan Parr from Hill, Farrer & Burrill in Los Angeles. Jordan, thank you for coming back on the program with us. Good to see you, Bill. It's good to be back. So, you know, I think one of the things that fascinated me, I was in a meeting on a case, I think that you're involved with, where the tax planner was kind of laying out the tax consequences of estate planning and I remember I was in a meeting thinking, "Wow, there's a lot of people here, a lot of salaries, a lot of expense. You know, make sure I create you know, if I'm going to do something, make sure I create contribution." But I realized that with proper planning, you're really talking about saving 10 times your fees, 20 times your fees. There's a really tremendous opportunity with proper planning particularly for high net high net worth individuals. It's very true. You know, I think it was Ben Franklin who said an ounce of prevention is worth a pound of cure. it's it's worth putting the money up front to come up with a tailored plan to avoid the heavy taxes that can be levied down downstream if you don't have any sort of plan in place.

1:41 You know, I work with you with a professional fiduciary on a couple cases that work with him on one where the decedent went to planner, worked out a plan, got the plan printed, maybe reviewed it. He paid for a lot of it, never executed the plan. And here we are actually trying to pick up the pieces with some of the same people you work with in other cases. and I and I just watched the bills go by, you know, hundreds of thousands of dollars. This case is a $40 million estate. Hundreds of thousands of dollars wasted because the plan wasn't executed versus other ones where I see that money is saved. So, let's talk about what are some of the key areas where people can get benefit and save money on taxes by doing proper planning. Sure. And it might be helpful to kind of take a step back and give an overview of how the estate tax system works. In California, there's no state level estate tax. It's purely a federal tax. And right now with the passage

2:42 Can I just say, "Please, I always urge people when you say quietly cuz somehow the state of California hasn't figured out there's opportunity to tax more people and they don't." So, be careful now. Okay, so there's no I'm sorry to interrupt you, but that one just always gets my attention. So, there's no state of California for example estate tax. Yeah, you know, it is it is ironic because California is one of the more aggressive you know, taxing states and yet they have chosen to not pursue an inheritance tax or an estate tax, which yeah, is surprising. so, the federal estate tax especially with the passage of the one big beautiful bill that recently became law, it's it's really a very rarefied atmosphere of people who have to worry about this. So, the individual what they call exemption is about $15 million. And so, with a married couple, you can combine those. So, you're you're looking at people with a net worth north of $30 million who have to worry about an estate tax or a single person with a net worth of 15 million or more. So, most of us you know, this is not a something we need to plan around, but for those I just missed by the way in case you're wondering. I just missed that one.

4:03 [laughter] for those who do have to plan around it, I mean the estate tax is about 40% of the assets above that exemption. So, it is very significant if you have a wealth of that size to make sure that you have a plan in place to mitigate that to the extent that you can. And so, some of the strategies that we employ are the gifting of assets either to family members or to charitable causes. And there's many techniques within that realm to essentially offload assets from the estate so that when the person dies, it's no longer assessed as part of that 15 million and above number that would otherwise be taxed. And we can talk some about some of those techniques if it's helpful, but just I think as a starting point, just having an overview of how the tax system works in this area is a helpful starting point. Yeah, I think that's a great the overview. on this case of one of the cases I'm working on now that does not have an estate plan, the estate's about $40 million. And you say, "Well, 30 million's exempt.

5:20 What's the big deal?" Well, that 10 million at 40% is $4 million. And I was sitting in a room and I was trying to guess what the fees were and I guessed about a half million dollars between the accountants, the attorneys. And that sounds like a lot. It is a lot of money. It sounds like a lot. It is a lot, a half million dollars of somebody else's money. But in order to save 40% of $10 million or 4 million. And so, I realized, "Yeah, this is like a multiplier if you have good advice and can avoid these problems, then the fees as expensive as they are become cheap if you get good advice and very expensive if you get bad advice or no advice." Yes. And even that 30 million figure, there are certain forms that you need to file with the IRS in order to double that 15 million. You know, it's it's the technical term is called portability. You have to file an estate tax return in order to transfer the deceased spouses cuz normally a one spouse dies first and so, you transfer that 15 million to the surviving spouse via an estate tax return. It's not automatic. so, even then like the technicalities of how complicated the system are really emphasize how important it is to have competent advice and you know, not let this kind of just be the default you know, go it alone sort of way of planning.

6:47 Yeah, and you're talking about a lot of money. So, let's talk about what are some of the strategies that you employ to help people minimize the tax implications or maximize the wealth that's transferred? Sure. So, I think at the most basic level, you know, everybody whether you are worried about estate tax or not, if you own property in California, you should have a revocable living trust. I mean, that's that's a middle class ultra high net worth everybody. Again, if the threshold is about $180,000. I mean, there's a recent law that passed that that raises it for the personal residence, but without getting into the weeds, a revocable living trust is worthwhile for everyone. So, Well, hold on right there because I often ask people that and they're they hem and haw. So, you're on record here in a sense. of course, get your own personal legal advice. This is a general business statement he's making. But I say this all the time that anybody who owns a house in California should have an estate plan and probably that estate plan includes a revocable living trust because why would you go through probate when you can pay in advance a fraction of the fee, a fraction of the heartache and a fraction of the problems? Absolutely. I mean, the probate is probate avoidance is probably the number one advantage of a revocable living trust. But there's other advantages, too. I mean, as people age and they may lose capacity, they can't sign legal documents. Imagine you have an elderly couple who, you know, they suffer from dementia or Alzheimer's and their home, which is maybe their most valuable asset that they would like to borrow against to have, you know, the care that they need. If they don't have an estate plan in place, even if they're alive, you know, it's like they're suffering from this incapacity. How do they sign the legal documents to take out, you know, a reverse mortgage or whatever the tool is that they might want to use to access the equity in their home. a revocable living trust is one of the

8:50 Ways that, you know, if the elders become incapacitated, a new trustee can step in and the trust owns the home and now that person, often a trusted family member, can, you know, take the necessary steps to access the equity in order to care for the elders who otherwise might not be able to do so for themselves. And the do-it-yourself program often doesn't work. I have a client who

9:15 [clears throat] his mother owned a house. He was helping her and she they needed the equity in the house and but she was too frail to manage the process. And so, he got a doctor's letter that she's incapacitated to invoke the power of attorney to sell the property. The problem was well, the property now is deeded in her name and she well, two problems. One is can't put it in the trust because she doesn't have capacity herself to put it in the trust. But worse is the incapacity was right on the same day as the power of attorney. So, in essence, they doc he knew he had to get the form. He went to Staples, got it. Then he knew he had to get the letter, he got the document the letter which was like a couple days apart. Well, he basically invalidated his own power of attorney because you have a letter from the doctor saying she's incapacitated and then you have a power of attorney stated 2 days before. the whole thing fell apart and now again, he's going to pay you know, $30,000 to unravel what could have been a very simple estate plan if he just put the prop her property in a in some sort of a revocable trust with all the normal paperwork. So, that's a basic level is just to get that something started. So, let's talk about some What are some of the tools that are available once you go past the basic plan to maximize the value of planning? Absolutely. So, for the tax planning, especially for people who are worried about estate tax, a very powerful tool within the revocable living trust is to allow the trust to divide into sub trusts upon the first spouse's death. You know, sometimes practitioners call this an AB trust or even an ABC trust with each letter denoting a different sub trust that is created. So, let me break down what that might mean in terms of how it's implemented. So, you have an elderly couple. the let's say husband passes away first.

11:12 And then their revocable living trust will say, you know, in California we are a community property state and so it'll say all of the husband's share of the marriage's community property and all of his separate property will go into one trust and I'm going to talk more about what that trust is in a moment, but just we're going to take deceased spouse's half and we're going to put it over here in this trust. And then the trust will say the surviving spouse, her half of the community property and any separate property that she has is going to go into let's call it a survivor's trust. And so that's her half of the estate and she can do with that what she wants. Typically a survivor's trust is revocable. The surviving spouse can use it, you know, they can get remarried, they can benefit their second marriage with that money. It's it's theirs to do with whatever they want. But let's now circle back to the deceased spouse's half. So, there's a couple different permutations of what you can do with what is sometimes called the B trust or the deceased the decedent's trust. The one that I typically like is called a marital trust. And what this means is you file the estate tax return to denote that everything in the deceased spouse's half is for the benefit while the surviving spouse is alive, it's for the surviving spouse's benefit. And this is important because that makes it a gift from the deceased spouse to the surviving spouse.

12:53 And that is significant because within the tax code gifts between spouses are never taxed. There's an unlimited marital deduction between gifts between spouses. Oh, hold on. I told my wife I couldn't give her more than $100 for tax code reasons. You say I can give her a bigger gift than that now? I mean I'm I'm not a therapist. I can't give marital

13:16 [laughter] marriage advice, but I can say legally speaking there would never be a tax consequence of gifts between spouses. And remember, other gifts like for example a gift to a child or you know, any sort of gift that's not between you and a spouse, if it's above an annual exemption which right now is around $20,000, you need to file a gift tax return. Now, you won't necessarily owe money on that tax because of the exemption which again, I'm trying to keep this 30,000 ft without getting too far into the weeds, but there are tax implications for gifts over, you know, let's say $20,000 for anyone who's not a spouse. But between spouses, that doesn't apply. So, when you have this marital trust, all that money of the deceased spouse's half can be used for the benefit of the surviving spouse without any sort of tax implication. So, this is a very powerful tool. And what the marital trust then what it does is after the surviving spouse the second spouse when they pass away, then the money that's left over in that marital trust will pass to the heirs which is usually children, but it may be charities, it may be other people. I mean again, estate plans are infinitely customizable, but creating a marital trust to take advantage of that unlimited exemption between spouses is a very powerful tool.

14:51 So, I'll pause right there. there's more to talk about, but I think that's a good kind of introduction for now. Yeah, and I think these issues become more complicated. I know I hear bits and pieces, but it gets more complicated as the family gets more complicated with divorces and deaths and widows and kids and then kids from the prior marriage blending in. You want to treat them the same, you don't want to treat them the same. I had a case where a father had a child out of wedlock and before he was married and then married and then had a child and then died. And I guess by law half went to his prior estate which was the child out of wedlock and the other half went to the daughter who you can imagine they didn't like each other. And so simply putting a estate plan whether he intended to or not, nobody knows, but he could have either put in a plan to say that's what I want to do. but these things get really complicated because the there's laws for all these cases, but each case is different and customizable and you have to make sure something addresses yourself, your own situation individually. I'm so glad that you brought up the blended family situation cuz that is also, I mean tax issues aside, the relationship dynamics in blended families are especially sensitive. Yeah.

16:09 And creating this AB trust, the survivor's trust and decedent's trust is a really powerful tool to ensure that, you know, let's imagine you've got a husband and a wife. It's a second marriage for both of them. Each spouse has kids from a prior relationship, but neither of them have kids with each other. Right. So, now you've got two sets of kids who are not biologically related to each other. Their only connection is because their parents have now entered into this new marriage. And so this is always a delicate situation because when one spouse passes away, often times that spouse wants to make sure that there's something left over for their biological children. They might say, you know, I love my second spouse and I like his or her kids, but I want to make sure that my wealth ultimately it goes to my biological kids. I mean not to say that the second spouse's kids I have any issue with them, but I just want to make sure there's something taken care of Yeah. for my kids. And so doing the split of the AB trust will, you know, provide some protection to ensure that the surviving spouse doesn't just say, "Okay, I'm the only one left. I'm taking everything and I'm disinheriting, you know, my other those other kids who aren't biologically related to me.

17:34 I'm just giving everything to my, you know, bloodline." again, you see unfortunate situations where things like this can happen when there's not proper planning in place. So, tax issues aside, the family dynamics are another important reason why having a tailored estate plan is really valuable. You know, I've seen cases where they had sub estates like this, but the house the residence was deeded as a life estate to the surviving spouse. And in cases where it's like you say blended families and prior marriages, you know, in practice it sounds makes sense, right? Of course dad would want his new wife to live in her home for the rest of her life. I mean, he married her, he loved her, he cared for her, he spent the rest of his golden years with her. On the flip side, the kids are like counting the days on the calendar till she dies because here in LA those houses are now worth a million, two million dollars or more and it creates really bad The longer it goes, it just seems to create bad blood. I was in involved in a case like that. My mother was widowed, remarried to a man who was also widowed, remarried, both had kids. He was a estate planner and he had set up the separate estates. But I said to him, "Look, the house is just I it wasn't that much money. I said, "But it's just going to get ugly over the years. Why don't we make a deal now and that way you get all the appreciation and we'll give you a discount cuz you're in the property and we made a deal and everybody was able to move on." But I've seen those cases just become civil wars because well, yeah, dad wanted her to live comfortably, but she didn't want to live in a two million dollar house. Well, it wasn't a two million dollar house.

19:14 So, how that that's got to be something Is is there some solution there I'm missing or is that just one of the challenges you have to kind of work around? No, so that's a very good example especially using the primary residence. So, this AB split would be a good solution for that because what it does is say, you know, okay, you've got your home and let's say it's held, you know, as community property, it's both of them. So, when the first spouse dies, you know, let's say it's a husband. His half of the home goes into this irrevocable exemption trust or I'm sorry, marital trust. And what that will do is it says, "I allow my surviving spouse, my wife, she gets the benefit of that house for the rest of her life. She can live in it. You know, it's it she gets the beneficial interest in that house. And then the surviving spouse, you know, her half of the house goes into her survivor's trust and she can do, you know, whatever she wants with that. But then what it makes sure is is that when the surviving spouse is passes away, then that house after both spouses have died, it will go 50/50 between the heirs of the marital trust, which is usually the biological kids of the deceased spouse, and the heirs of the survivor's trust, which is usually the biological kids of the surviving spouse, who of course now is deceased. But anyways, that that sort of structure allows the survivor to, you know, live and enjoy and reap the benefit of these assets that were acquired during the marriage, but it also makes sure that it half of it is set aside at the end of the day for the deceased spouse's bloodline, so that they can rest assured that hey, you know, stepmom isn't going to sell the house and, you know, just take the money and run and, you know, we're left with nothing.

21:10 And there might be good cause to be concerned. You know, such as, you know, mom's mom's separate money was used to pay the mortgage, rent, taxes, improvements or not and that would affect, you know, is a community property and you might in divorce have that contest and here's it, you know, their way past is is much harder to put all that together by having it lined out ahead time to kind of solves the problem I think that we might decide how this is going to be handled and it provides a process that's lined out. So I it just seems that particularly with blended families, it's just there's already a fire burning between them and the money just is like throwing gas, you know,

21:47 [laughter] in my experience. Yes, it's very true. Part of what makes this area of law trust and estates fascinating and also challenging are the relationships and the family dynamics that as practitioners we try to come in and set up a plan to if not completely eliminate at least somewhat limit the emotional strife that that that can happen because people tend to feel more at ease when they're like, okay, at least there's a plan. And I might have certain feelings about this family member or that family member, but when something's set up with the legal document, you know, there's a level of comfort that comes with that that can somewhat help move smooth over some of the friction between, you know, family members. Now I think you're being a little modest and then I know your background. You have a degree, I'm not sure of divinity. I know you at one time you were involved in church ministry, which is probably all about relationships and listening to people and letting them vent. How does that play into your legal practice? Normally people think of attorneys as sharks, barracudas or bloodsucking leeches and here you are a nice guy who smiles. Doesn't sound very lawyerly to me.

23:06 Well, that's funny. I think it was, you know, the Shakespeare play, let's kill all the lawyers. You know, that that that sentiment is real. And I will say that I'm grateful for my ministry experience because as you mentioned, so much of when I was working in the church, it is coming alongside people who are confronting, you know, their mortality. They may have lost a loved one. They're grieving. And I encounter very similar situations in my practice as a lawyer, although I'm operating in a different role, but just having that experience of being in those very intimate family settings was a great way to prepare me for my legal career. So, you know, thank you for bringing that up. Well, I do I do think there's a relationship there. I mean, traditionally, you know, the people we went to for legal decisions were the spiritual head of the clan or family or community or whatever it was. And so it makes sense and I know my in my experience when I see successful attorneys, there's they always have a blend of two things. They have great technical legal skills, whatever all that means in their in their particular niche. It can look different ways, but at the same time, the ones that are really great also have great soft skills. They're great communicators. They're great either written communication and or meeting one-on-one helping people come to some conclusion. And while, you know, imagine in estate planning you're representing, you know, one party most typically, that that if your ability to communicate with the rest like you have to fill in the gaps that they didn't do in some regards, right? They if they communicate with the family well, there's no more communication there's more communication with the attorney and that's not necessarily good unless you do a good job of it.

24:55 Absolutely. I mean, being able to be an effective communicator is essential and I think in any area of practice, but especially in this area where often times the family members, you know, there's different levels of sophistication that people might have and it's very important, you know, when I do enter into these family conversation conversations is to make it clear first off who I represent because it can be very easy for family members to think of the attorney as, oh, you represent the family. It's like, no, I represent mom and dad and, you know, you I'm ultimately there to, you know, ensure that I'm advocating for what they want, which may be different than what you want. So, you know, making setting those guidelines is is very important and being able to communicate in a way that hopefully brings clarity and harmony, which I mean, sometimes that just can't happen because of various reasons, but it's always the goal to try to, you know, bring order out of the chaos, let's say. Well, I think that having that communication line, you know, I always thought the extra phone call, you know, was the one that makes the difference. See, I again I'm involved a couple cases with you and one of the things that that is newer to me this past year or two I've seen more of are professional fiduciaries where in some cases there might not have been one or in some cases the litigation just goes on and on forever.

26:23 You know, fortunately a couple cases somebody put forward the idea, hey, let's get a third party to manage this drama and we're involved a couple where that's the case and it just seems that that person A is more trained in communication, documentation and B they're not family members, so you're not going to be as emotional probably dealing with them as you otherwise would be. So, talk a bit about the role of a professional fiduciary to administer a plan. I just feel like that's not that's an underutilized position. Yes, there's a fee and it's costly and again, it can be very expensive, but it's not as expensive as drawn out full civil war litigation. Absolutely and I'm so glad that you brought up fiduciaries because many families are not necessarily even aware that such a profession exists. And especially for larger estates where, you know, the cost associated with hiring a professional to administer a trust, yes, it is an added cost, but to your point, it is a fraction of the cost of a lawsuit that can, you know, just become astronomical. It's again that whole an ounce of prevention is worth a pound of cure. So, for example, in a family dynamic where, you know, I see this all the time where there might be one person, a patriarch or a matriarch who kind of is the glue that holds the family together and, you know, there's all these, you know, simmering disagreements with the family, but because mom or dad or whoever it is is still around, people kind of bite their tongue and they and they play nice and everything. But as soon as that, you know, the matriarch or patriarch passes away, well, it's like, all right, now all of these hurt feelings and, you know, emotions that have been simmering, well, now that person's no longer there to keep them in check. And so now there's a dispute. And so if

28:28 You feel like that may happen, a very good planning tool is to instead of putting a family member in charge of the estate, which is the normal kind of default way to do it, but when you know that there's different factions and there's different people who have, you know, their opinion of how things should go, just saying, look, I'm not going to I'm not going to put somebody who has a let's say a opinion already in control, I'm just going to get a neutral professional fiduciary not related to our family, you know, they're familiar with the probate code, they know how to read these trust documents. I'm going to name that person as the decision maker for my trust to make sure that it's administered in a way that honors my intention. I mean, I can't tell you how much money you could save by just doing that simple, you know, change from a family member to a neutral professional. And usually what ends up happening is, you know, if there is a dispute and there's no professional, often times the court will just say, well, you guys, you know, brother and sister, you know, step kids, step kids, you guys can't get along, so I'm just going to appoint a professional anyway.

29:50 You know, the case that were you one of the cases that were involved with is this precise situation where brother was the trustee, his siblings sued him, and there's this whole dispute, and the court said, "Well, you know, we can't have you guys fighting and somebody in control of the trust, so we're just going to put in a neutral professional while you guys, you know, litigate this out. Somebody's got to keep the lights on, and we're going to put the neutral in place." And so, you know, what a what a savings it would have been if from the beginning that professional was already there as opposed to having had to file this lawsuit and have the court then intervene and say, "I'm we're going to put a professional in." So, yeah, it's a it professional fiduciaries are great. You've got individuals who I think can be really powerful. You also have institutions, especially for much larger estates. Naming a bank or, you know, a trust company as the fiduciary can also be a very worthwhile strategy, for sure. Yes, I'm sorry I started laughing when you when you started the topic, cuz I think myself, "Imagine saying, 'Yeah, you know, to handle this complicated large financial matter, let's take one of the siblings that already has his own baggage, and then everybody else has baggage on him, and he's never done or read business anything like this before.

31:13 Let's put him in charge of life-changing money for all the siblings, and see if he can help them get along.'" It's like, "Of course it's not going to work. Who would think that would ever work?" They could barely even, you know, divide a birthday cake without arguing over the size of the slices, and now you're going to give them $20 million and tell them to play fair. It's just I see this all the time, and it's And I think that, again, this is something that you can handle when you write the plan and say, "Well, who are appropriate people in your life? Is it Is there an attorney, an accountant, somebody who's maybe a fiduciary that you might know, or companies that have that service?" And I think that it particularly for a higher net worth individuals, why would you not? I just I just don't understand. Why would you In the case we're working on, the fiduciary is not just a fiduciary and licensed to act in the middle, but he's an expert in real estate. In this is a case where we have a bunch of properties, and we're trying to figure out what's it worth, what do we do with it, you know, and somebody who knows what they're doing. It just cuts through. I know I called the other attorney on some questions. He's He's saying, "Well, why are you calling me already?" Well, because it's in foreclosure. I know what that means. Like, we have a ticking clock here, and I'd rather get an answer now than 2 weeks from now when we've lost some daylight. So, again, I to me the third-party fiduciary is something that serves as a solution when you're in litigation, but much better considered at the estate planning stage. You know, kind of to wrap up just cuz I appreciate I've I've kind of used the time I got from you, but I know you're very generous with your time. Just one I'm curious, one of the topics of the day that everybody's looking at is artificial intelligence. I know that in the legal field it's a big topic.

32:49 You know, there's problems with it, there's people using it. I know the firm that you're that you're with is one of the I think most established firms in Los Angeles, been around over 100 years. So, to me that sounds stodgy and old, yet I'm sure you also use technology in the company to a high level. Where do you see artificial intelligence as your practice, as a practitioner of law, or as a firm in this field? Where do you see the change just happening? Is it something that you're doing it at Is it a firm level? Is it the software that you use every day that's implementing these solutions? And how quickly do you see this changing your industry? So, I think that's a really good question, and I'll start by saying it's here, it's going to Artificial intelligence is, you know, it's like the calculator. You know, people do math, they use a calculator. People are practicing law, they're going to use artificial intelligence. But the question really becomes is how do you use it? I mean, lawyers right now, there's all kinds of cases where you know, careless practitioners are just kind of copy and pasting what whatever the AI spits out, and they are getting in hot water because of that, because AI is very far from being able to actually provide true, you know, advocacy and to really actually do a lawyer's job. Now, having said that, there are some things that AI is very good at. I like to use it as the beginning of my research. I think it's very helpful for, you know, if I have a question, I can put it in the AI and say, "You know, what are some authorities that address this?" And then now that I have, you know, a starting point, then I can read them myself, and I can come to my own conclusions. I don't really trust the AI to come to conclusions on its own. I just look at it as more like a very high-powered Google. It's It's a much better search engine than, you know, we've had in the past. I mean, people in the legal field, you know, sometimes you'll Shepardize a case and, you know,

34:52 Do these techniques to kind of find, you know, legal authorities. And AI can do that pretty well and in a way that's, you know, more efficient. But there it still is I mean, and I don't know what's going to look like in 10 years, 20 years, but it's still far away from, you know, being able to really understand the nuances of the case, and especially when there's relational dynamics that you just really can't type into a box. And I will say, if there are any people who are working with attorneys right now listening, you know, I have clients sometimes who will who will put, you know, things that I write or their questions into AI and then come back to me, and I would say that that is usually more trouble than it's worth, because now I have to explain where the AI is wrong to this. And I would say, if you have an attorney, trust your attorney. Trying to second-guess the attorney with the chatbot is I think a Yeah, inefficient use of resources. But yeah, it's a brave new world, for sure, and it's here to stay. But I think it's still very much in its infancy, and lawyers are still essential. We're We're not anywhere near where a computer can just, you know, handle a case, you know, A to Z.

36:15 Seems to me that these tools are tremendous law clerks, virtual law clerks. They're They also can be, if used right, really good paralegals. But they're not ever going to be attorneys, because it's all about the edge case. It's all about the things that haven't happened before. It's all about the details you didn't think to put in the prompt that make the attorney I think the attorney. I think the same with real estate that And I think that then forces us to be improving on our knowledge so that we can use these tools effectively to serve our clients, but at the same time make ourselves more valuable by saying, "But I need to review it all," because at the end of the day, the chatbot can't make a good decision. It can make some good presentations and synthesis and summarize, but at the end of the day I have to go through that and make sure all the key matters are met. I'm sure the same with you. It can prepare maybe a list of documents or assets, but it's not going to necessarily decide what the best tax strategy is, you know, at the end of the day. Absolutely. I mean, there's an irreplaceable human element to being a counselor. And whether you're a counselor as a realtor or as an attorney or what have you, there's an you know, I there's some statistic out there that like 80% of communication is nonverbal. You know, it's a lot of things that are just cannot be translated into the digital format. Now, again, I like AI. I think it's a good tool. I think, you know, it's going to be used, and it should be used. It's just figuring out the proper way to use it, and, you know, kind of tempering some of the hype that's around it by saying, "Look, yeah, it's good, and it is useful, but it is not this miracle catch-all, you know, going to solve all the world's problems." There's always going to be a human element that is essential.

38:01 Or else we're going to have some other problems. If there's no human element involved, you know, not to go back to divinity school days, but that's a whole 'nother issue. It's if you take the humans out, that pie doesn't look so good. Jordan, look, you've been very generous with your time. I really appreciate the chance to talk today about these issues, estate planning, and previously we've had chance to go into probate as well. Anybody wants to get a hold of him, he works for the firm or is a is associate What's the proper term? You're a partner, you're associate? You're associate. I'm an associate. You can call me Yeah, I'm an attorney at Hill, Farrer & Burrill. We're in downtown LA. We've been in the city for over 100 years. You know, it's a great firm. I'm I'm really proud to be a part of it. And if you have trust and estate or probate needs, I'd love to talk to you. His contact information's down below, or if you're listening to us on audio, feel free to reach out to me. I talked to Jordan or seen email from him you know, almost daily it seems like every couple days. We're involved in a couple cases. It's been a pleasure to work with you personally as well as on the peripheral couple cases. But most importantly, thank you today for sharing your information with people who are watching our program. Thank you so much, Jordan. Thanks, Bill. And for the rest of you, this was [The Estate Planning Podcast]. We get together with a new episode every week, usually with an estate planning attorney, but sometimes other vendors, to be better and more effective at serving our clients. If you have questions, comments, I'd love to see them. Call, text, email, or put it in the program. Subscribe if you like this. If I can help, reach out at Bill Gross Probate on social media. And as always, make today your best day ever. Thank you so much.