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welcome to mobile estate planning with your host michael bailey over a decade ago attorney michael bailey turned his attention to estate law after he recognized the unacceptable number of adults without proper end-of-life planning michael recognizes that many of his clients have difficulty finding the time for making a proper estate plan that’s why he became the mobile estate planner He will go to wherever you are to assist you with your estate planning, including writing wills, trusts, and giving you the information you need to avoid probate. Now, ATX, Ask the Experts, presents Mobile Estate Planning with your host, Michael Bailey.

SPEAKER 02 : 0:57

All right, good afternoon. Welcome to Mobile Estate Planning with Michael Bailey here on 560 KLZ AM. Also heard on 100.7 FM or the KLZ 560 radio app. And all of that so that we can do something besides just leave our families alone. Phone number to talk to me on the air is 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-394-6887. And once again, 720-394-6887. So let’s talk about estate planning. And I’ve had lots of people who are like, oh, well, there’s this kind of idea that somehow if they have me do their estate plan, that I will obtain magical mind reading powers for them. I will now know everything about all of the assets they’ve ever had and ever will have and that i will keep track of all of them because that’s apparently what i’m supposed to do i i did not know this i wasn’t in the job description and it’s certainly not true but uh you know so when i when i send out uh my questionnaire to people when you know i first meet i’m going to meet with them i’ll send out a an intake worksheet where I ask about what their assets are and how much they’re worth and who they want to leave stuff to and who they want to put in charge and name, address and phone number of all those type of things. And so I’m gathering information. And I think some people think that because I’ve asked for that information, that it’s all going to go into the estate plan and then it will live there and then I will keep track of all the rest of it forever and ever and ever and ever and ever and ever. Well, that’s just not true. If I find out that somebody has, mostly I’m asking for what kind of different assets do we have and how much are they worth? Because those can inform what we’re going to do. If somebody says, oh, well, I have my house here. I have a quarter interest in the family farm in Kansas from when grandpa and grandma died. and I own a 10th interest in the family lake cabin in Michigan, then that helps me understand, oh, gee, we have property in multiple states, so we probably ought to do something about the property in multiple states. We could have the property that’s in those multiple states going to different, if we just do a will, then my clients will need to go through probate in every single one of those states. The remain probate is done in the state where you live, in the county where you live when you die. But any other state or jurisdiction where you have, so any state, not necessarily jurisdiction. So if you have multiple properties in Colorado, you can do probate just in the one county in Colorado. But if you have real estate property in different states, then in the other state, you would need to apply for what is called ancillary probate. to address that real estate in the other state. So that’s just kind of how that goes. And so, you know, for somebody who has multiple properties and or maybe they’re real estate investors and they are, you know, we actually have my My brother-in-law, his parents, he used to work for one of the big window manufacturing supplier companies. And so he got moved around the country. So he lived in Washington for a while, and then he got moved out to Missouri, and then he moved to Arizona, and then he moved to Michigan, and then to Kentucky, and then retired in Utah. Well, at all these stops, they bought a house and they never sold the houses. They’ve rented them now. So now they have like five, six, seven rentals. And so they’ve got seven different rental properties. It’s what funds their retirement because they’ve got seven different rental properties with rental income coming in, which is great for them. But it means that… If they were to pass away, then their kids would have to go through probate in all of those different states. And that may not be what they’re hoping to do. So instead, we look at trying to create a trust. We say, okay, well, we’ll put the assets inside of the trust. And then when someone dies, the trust does not die with you, but rather the trust continues to exist because it can be its own separate entity. And then whoever takes over that trust as a successor trustee, the trustee is the person who’s in charge of a trust, then the successor trustee has authority and the ability to take those assets and to distribute them out to the named beneficiaries of the trust. And in doing so, they don’t necessarily need to go through the probate process for every single state because it’s all consolidated in one trust and all can be administered under that trust. So it makes life a little bit easier. It makes life a little bit simpler. And then whoever, you know, kids or loved ones or whoever’s left over doesn’t have to go through all of go through probate and all of the different states. It’s mostly the same, but it’s always a little bit and slightly different throughout these various different states. And so, you know, people may not want to figure out all of the different variations. Well, that’s, you know, if you have property in multiple states, it’s one of the things that may trigger us wanting to look at a trust. But that’s not necessarily the only thing. But it helps inform that decision, helps us make that intelligent decision of what’s the best way to do this, what’s the way that would work best for you to set this up. So, you know, whether it’s a will or a trust or some other manner of doing things. So you are listening to Mobile Estate Planning with Michael Bailey here on 560 KLZ AM. Also heard on 100.7 FM or the KLZ 560 radio app. Phone number to talk to me on the air is 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-394-6887. And once again, that’s 720-394-6887. So, you know, just because people tell me that they’ve got a whole bunch of different properties doesn’t mean I’m not going to list them all out in the will. I’m not going to list them all out in the trust. And say, well, gee, now every time that you change a property, you need to come back to me and you need to update these documents so that all the assets are all up to date. That would be great for me. Every time somebody makes a change in an asset, they have to come to me to change their estate plan. I’d be like, cool, I’ve got to charge you extra for that, but here we go. So great for me, maybe not so great for you. But so, you know, real estate, multiple states, real estate that’s owned in different ways. There’s just one of those is one of the piece of the puzzle that I need to know and understand so that we can figure out what works for you. Now, let’s say that you’re you bring me your look at your assets and you have one house. And then you’ve got a bank account and checking account, savings account. And you’ve got most of your money is all in IRAs and 401ks. Okay, that makes sense. You put your money into those retirement vehicles. Makes perfect sense. And so I’ve had clients come to me like, oh, you know, do we need to trust? And I said, well, let’s talk about that, shall we? This particular, you know, so your IRAs and your 401ks, they have beneficiary designations on them. If they have beneficiary designations on them, that means they will pass outside of your will, outside of your trust, and don’t need to go through probate because the beneficiary designation will transfer all of the ownership of that, or they’ll transfer all the assets of that IRA or 401k to your named beneficiaries. So you want to make sure that the beneficiaries named are correct. You know, is it your spouse first and then your children after that or is there a life insurance policy that’s set up to go to an ex-spouse because that happens a lot in divorce where you’re maybe you’re paying alimony or something like that and then there’s or child support and then you’re like well what if I die well you know the courts can order you to maintain a life insurance policy and That life insurance policy can have the designated beneficiary of the ex-spouse. And so if you die, then it pays out to the ex-spouse. They’ve got their alimony and or child support that they can then use to support the child. Because if you die, it doesn’t just eliminate the financial obligations you may have to a former spouse or to your children. So you set up your beneficiary designations where they’re supposed to go. Are they supposed to go to… current spouse and then kids or if you don’t have a current spouse just two kids if you don’t have current spouse or kids somewhere else but anything that has a beneficiary designation that will pass that’s kind of like the first yeah so that kind of the hierarchy of how things pass if you own something jointly with somebody when you die the joint owner becomes a sole owner beneficiary designations That’s kind of the next level of you’ve got a beneficiary designated on your bank account or your investment account or your IRA or 401k of where it’s supposed to go when you die, who’s the named beneficiary. Then everything else that doesn’t have a beneficiary designation or isn’t jointly owned will pass according to what your will says. A trust only controls property that’s owned by the trust. So if you have a trust, then the trust will go ahead and say what all of the property is supposed to be and distribute all the property that it owns. But the trust doesn’t say what happens to property that’s not owned by the trust. So if you create a trust and you put your house in there and you’re like, but I’m not going to put… this other you know the portion of the family farm and then you die well the portion of the family farm where is it supposed to go well there’s if there’s no sort of designation on where it’s supposed to go you know then we’ll look at your okay well what does your will say well the will says uh will says put it in the trust and then distribute it according to the trust all right cool that’s that’s the language that we put in what’s called a poor over will p-o-u-r not p-o-o-r Because we want it to pour over like a pitcher of water pouring over into glass, not to make you pour. We’re not trying to make you pour. We’re just trying to pour it over so that we know where it’s going to go. But you want to be careful. And the pour over will is kind of the backup to the trust of if you didn’t get things in the trust, what do we do about it? Those type of things is what we’re looking at. So as we go through assets, we go through what we’re trying to do. We go through how are we going to make this work. There’s all of those different types of things that show up. And so those all inform what we’re going to do with different assets and how we’re going to set up an estate plan. But going back to my first example of you’ve got a house and then all your money is in IRA, 401ks. Someone’s like, oh, well, do I need a trust? And I said, well, let’s talk about that. Are you trying to preserve assets and not give them out to people all at once? Is there a reason why you wouldn’t want to just transfer everything to your kids? People say, well, no, my kids are in their 40s or 50s, so they’re financially responsible. They can handle it. I’m like, okay, makes sense. So then we look at how do we say, well, we’ve got beneficiary designations on those accounts. Then what’s left to give away is your house and your bank accounts. Well, bank accounts, you can put a pay on death designation. So if you put a POD or pay on death designation, that’ll transfer according to the pay on death designation. Again, that’s similar to a beneficiary designation. And then that only thing left that might trigger the need to go through probate is the house. And if somebody doesn’t want to if somebody is concerned about the house and how is the house going to pass and we just need to get it to the kids without needing to go through the probate process, then we say, OK, there is such thing in Colorado as a beneficiary deed. And a beneficiary deed is essentially a transfer on death deed. It’s where you can name beneficiaries of your house. And so if you take if you create a beneficiary deed, you can put a beneficiary deed that says, okay, here’s a beneficiary deed, and it’s going to go from the person that has passed away to the kids, and we’ll just split it up between the kids, and then the kids will be owners. Well, with a beneficiary deed, you can take, you prepare that, You get it signed, witnessed, notarized. You record it with the county before the current owner dies. And then upon death, you can go to the county with the death certificate and say, hey, this person has died. So ownership transfers from the deceased person to the named beneficiaries, the heirs. Sometimes you need a certificate. supplemental affidavit to tie the name on the death certificate to the name on the deed because they don’t always match but that transfer happens at the county clerk and recorders level so just the county clerk and recorder will be like oh well you know we know that it’s no longer the owner is no longer the deceased person but rather it’s the named beneficiaries on the beneficiary deed okay cool and then the named beneficiaries on the beneficiary deed can probably go and sell the house or you know if they want to keep it they can keep it but if they want to sell it then they sell it and as part of the chain of title there’s a beneficiary deed and then the proof of death showing that they’re the three owners and then you can transfer ownership from the three kids that are owners to whomever you sell the house to and now everything has been transferred and everything like it’s supposed to, and you just kind of move on. And a beneficiary deed, I charge $250 for a beneficiary deed. So if I wrote somebody a will, one of my will packages, plus a beneficiary deed, it would be $750. Well, my trust-based packages start, they’re usually between $2,000 and $3,000. So depending on what you’re, if you’ve got a whole bunch of assets that already have beneficiary designations, We don’t necessarily need to set up a trust to avoid the probate process because we can do a couple of different things and save you some money. And a lot of times when I’m telling people this, they’re like, oh, but is there a downside? I’m like, not really. If we’re trying to avoid probate, there’s just different ways of doing it. And, you know, sometimes it’d be like, well, you know, if you’re going to move from this house, then the beneficiary deed is tied only to that house or that real estate. And you have to go to a different place for a different type of different. If you have a different house or different real estate, then you’d have to do a new beneficiary deed. But even then, we still got five moves before we hit the two thousand dollar mark with the trust. So yeah, and I’ll be talking to people. I’m like, so basically, I’m trying to talk you into paying me less money, but still getting you the same benefit. And people seem to appreciate that, that I’m trying to talk them into paying me less money, but still getting them the same benefit. And you know, that makes perfect sense. But neither approach is the correct one for everybody. I mean, I’ve already got two approaches. So if there’s different situations, whichever one would work best for you and you’re most comfortable with makes sense. Some people, like me, for instance, I have a trust because I have properties in multiple states and I have children that are under the age of 18. so i want to hold on to things and give it to them over time instead of all at once because as much as i love my 13 year old if we both my wife and i died and there was a million dollar life insurance payout for him i don’t think giving a 13 year old a million dollars and saying hey good luck would be fun yeah there’s the uh old cartoon richie rich where he was you know teenage kid that was super rich that’s great for cartoons not so good for law stuff So you are listening to Mobile Estate Planning with Michael Bailey here on KLZ 560 AM. Also heard on 100.7 FM or the KLZ 560 radio app. Phone number to talk to me on the air is 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-394-6887. And once again, that’s 720-394-6887. So because of that, we’re not really able to just keep, you know, there’s no one right way to do things. And even if you tell me what your assets are, it doesn’t mean that I’m going to keep track of them all the time. Several years ago, I had a client where I had written a trust for her and she called me and she said, oh, well, I’m getting divorced. So if you could just tell me, you know, if you can just send me a list of everything that’s in the trust and everything that, you know, what was in the trust. And so we can I can have that list. That would be great. And I’m like, so why don’t keep track of that list? She’s like, but you wrote the trust. I’m like, uh-huh, I did. That doesn’t mean I keep track of all of the assets that were in the trust or that were put in the trust or that have been moved out of the trust. I even asked her, I’m like, so have you opened a new bank account or have you opened a new investment account? Have you moved houses? She’s like, well, yeah, I’ve done all those things. I’m like, and how many times did you call me and let me know? And she says, well, none, but you’re supposed to keep track of it. I’m like, how am I supposed to keep track of it exactly? Now, this was a person who didn’t quite understand what my role was as an attorney, but I don’t go in and then keep track of everybody’s assets and everything like that. I mean, I don’t even know how I’d go about doing that. I mean, I’d be like, hey, you know, call up Charles Schwab or call up… Fidelity and be like, hi, my name is Michael Bailey. Here’s my, you know, a couple thousand clients that I have that I know have invested through you. Would you please just go ahead and send me all of the list of all of their assets so I can put it in my files? Now, Charles Schwab and Fidelity are going to be like, I’m sorry, we don’t know who you are. You are not the owner. You are not listed here as being able to access things. So, no, we’re not going to send you that. Okay, fine. Or there’s not a secret society of financial transaction watchers that are like, ooh, we have this secret handshake that we let the attorneys in. Then we say, oh, well. We see that you wrote a will for Mr. and Mrs. Smith. Mr. and Mrs. Smith bought a new lawnmower. So now you have to know about the new lawnmower. Okay, cool. Well, they also opened a bank account at Farmers Bank as opposed to Farmer and Agriculture Bank. Okay, cool. There’s not this, you know, hyper-vigilant oversight group or company that keeps track of all the financial institutions and all the financial transactions everywhere. There might be people who think that that’s the case. Having learned about the NSA watching things from Edward Snowden, The government probably has a whole lot of information on things, but they also don’t share it with just everybody or share it with, say, me, even though I’m an attorney. It’s just not something that we do. So unless you’ve hired me to be your trustee, which is a service I don’t offer, and hired me to keep track of everything, which again, service I don’t offer, I’m not going to be the right one to be keeping track of all of your assets and what all of those assets are and how they change and, you know, turnover over time. I had a client or I had the sister of a client call me a week or two ago, let me know that my client had passed away. And that was very sad. I said, OK, so what are you? I said, I’m very sorry. How can I help you? They’re like, well, you know, he told me that you would you would know all of his assets. So I know where to go get things. I’m like, well, he told you incorrectly. Because I don’t keep track of all of those things. So when I write a trust for somebody, and I’d written a trust for this particular client, at the back of the trust there’s a Schedule A, and it’s kind of where we put what’s in the trust. So if I write a deed, I’ll put the deed in there, and all of those type of things. And so as we go through and do that, then we have a then I have a I have a record, there’s a record of what I put in there. And then it’s like, okay, as you put, so you talk to your financial institution, you put your assets inside of the trust, or you set up the trust as a beneficiary of your accounts. And I tell people, I’m like, on that Schedule A, then keep, you know, when you move something, write down what you move. So be like, oh, you know, first bank account, one, two, three, four. Fidelity account, five, six, seven, eight. So use that Schedule A as like a worksheet to keep track of what you put into the trust. Because then when you die, your successor trustee can go to that Schedule A and say, oh, look, what are these things? And now I know where to go looking for assets. Because as you put things into the trust or as you move things out of the trust, say you have a house at 123 Main Street, and then you move and your next house is at 456 Minor Street. Well, you want to keep track of that so that you kind of, since you’re the trustee of your own trust and you’re keeping track of what’s in there for your successor trustees, you are then keeping that record so that you can make life easier on your successor trustee when you die. And if I offered services of being a successor trustee, I would totally do that for you. But I don’t, and I’m not anybody’s successor trustee. Well, my parents, I am, but that’s because I’m their son, not because I’m an attorney. I may have gotten picked to do it because I’m an attorney that does this, but still. But as so so keeping track of assets and what’s where isn’t necessarily part of creating an estate plan or creating the or a trust or what’s part of my responsibility as your trustee. Instead, I create the estate plan. If you would like me to help get assets in the trust, then I do that. I charge extra for that. But then I don’t necessarily keep track of everything. If you call me and you say, oh, hey, I bought a new house and I bought it personally. Can you put it in the trust for me? I’ll be like, sure, I can do that. I can send me a copy of the deed and we can transfer ownership. So there’s definitely things that I can do with that, but I’m not actively keeping track of everything for you, despite what you may want me to do. So if you let me know information, I’ll use it. But it doesn’t mean that just because you told me about something that I’m never, ever going to do anything ever again. So I see that my time is out. So I will let you go. Stay tuned for John Rush and Rush to Reason coming up next. And I’ll be back next week. Thanks and bye.

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Mobile estate planning with Michael Bailey will return to ATX next Wednesday at 2.30 here on KLZ 560, AM 560, FM 100.7, and online at klzradio.com.