Tune in to this episode of Mobile Estate Planning with Michael Bailey as he delves into the nuances of timing in estate planning. Many individuals wish to create a solid estate plan once in their life, but unforeseen life events often necessitate updates. Michael shares stories of clients grappling with such challenges and offers solutions that balance rigidity and adaptability.
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 01 :
Good afternoon. Welcome to Mobile Estate Planning with Michael Bailey here on 560 KLZ AM. So we can do something besides just leave your family alone. You may also be listening on 100.7 FM or the KLZ 560 radio app. There’s different options and I’m happy to have everybody there who happens to be there. So phone over to talk to me on the air, 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-394-6887. Once again, 720-394-6887. So as we’ve, you know, just all sorts of different things happen and all sorts of different things work out and all sorts of different things go on in my practice. I had somebody who called me this morning and they let me know that they were in a significant amount of pain and they were going to go into the hospital later today and they didn’t know how long they were going to be in the hospital they didn’t know if they were going to come out and they wondered if i would be able to come and meet with them this morning to get a will done and i got that message after i had completed my nine o’clock appointment this morning so i was about 10 15 when i got the message And I was on my way driving from that appointment to another appointment that I had at 11.30. And then I had another one at 12.30 and then came down to do this. So I called the lady back and I said, I’m sorry, I’m booked out till January. She said, oh, that’s a bummer. I said, yeah, it is. I’m sorry, I can’t get there, but hopefully you can find somebody who can. She said, okay. And then we moved on. So it kind of got me thinking about the timing of estate plans and how do we deal with the timing of an estate plan? Because I have many people who I meet with who they will let me know that they just want to do estate planning once and they don’t ever want to have to do it again. So they want to make sure that everything is done in such a way that it can be rigid and exactly what it needs to be. But also be flexible enough that they never have to work with an attorney again. Because, you know, we attorneys charge money. And so it’s just a racket so that we can make money if things need to change. And I’m like, well, that might be a little bit of the… Anti-attorney and we don’t like attorney is view of life. And I can understand that. I can understand why people want to do that. I just don’t know that I’m the one who is trying to take people’s money any more than I need to. You know, I like to get paid for my work, but I don’t like to take money from people unnecessarily. I try to help people do things so that they’re not just, you know, there’s just no money involved. And, you know, as much as I’d like to be independently wealthy, I mean, I would like to be the world’s first trillionaire. And then I could work for free and I could help everybody for free and be like, well, I have a trillion dollars. I can do pretty much whatever I want. So I’ll help people for free. But I do not have a trillion dollars. One or two, that’s more like the number that I have is one or two dollars, not a trillion dollars. And so I help people as quickly as I can, the best I can, but I’m not out to try to get rich off of people. And so, you know, if we do an estate plan and then something in your life changes and we need to change things around, if I charge for my time there, it’s not because I’m trying to bleed someone dry. It’s because I’m actually doing work and so work needs to be done. So sometimes I think there are people out there who they’re waiting to do their estate plan because what they want to do is they want to do their estate plan and do it in such a way that it’s so close to the end of life or so close to the end that nothing would ever have to change. So you’re kind of playing the idea of. Well, you know, I think I’m going to live to be 83 years old. So when I am 82 years old and six months, 82 years and six months old, I can then start the process, put together an estate plan that I can sign when I am 82 years and nine months old. So then the estate plan will only be three months old when I die. I won’t have to do anything different. I’ll do everything right and I’ll do everything once and we’ll be good. And then we can move on. And yes, that’ll be great. Well, that would work really, really well if we knew when our expiration date was and we knew when our time was up. If there was a time stamp on Luke’s forehead that said, I will die on April 18th of 2073. You’re like, cool, I know exactly when I’m going to expire. So, you know, you can plan everything out. You can do all the things that you need to, to get there. And then you can have the right time for when you’re, you know, you’re like, I’ll do my estate plan right before my expiration date and I’ll be good. Problem is that I’m looking at Luke’s forehead right now and it has no expiration date on it. Or if it does, it’s written in the same, you know, um, skin tone as his actual skin. So it’s not readable. And so I don’t know when Luke’s expiration date is Luke. Do I have an expiration date on my forehead? No, none that I’ve ever noticed. Dang it. Oh, man. So I don’t think I’ve never actually met somebody who had. I’ve met people who have dates on their foreheads for various reasons. And like, you know, you’re at a conference and you write something on there and, you know, some sort of exercise in trust or team building or, you know, getting to know you or things like that. But I’ve never seen somebody who had and knew their expiration date. It just wasn’t, it’s not something that’s there. So trying to figure out that timing, I think everybody knows they’re going to die, but everybody’s pretty sure it’s not going to be anytime soon. And it’s certainly not going to be in such a manner that they’re not going to be able to plan for it. Well, I think we all know that that’s not quite how it works. My daughter played a volleyball game last night, and one of her JV teammates apparently lost a grandmother and has a grandfather in critical condition because they were out driving. Well, I think somebody else was driving, if I remember the story correctly. And it ended up in a car crash. And, you know, grandma didn’t make it. And grandpa is in critical condition and likely will not make it. So, you know, I drive quite a bit, visiting people. And I try to drive safely. But, you know, sometimes I imagine I’m not the absolute world’s safest driver. But sometimes I’m not sure about the other people around me too. Sometimes, especially when I’m driving on I-25 or I-70 or I-76 or 270, you look around and you can see there’s three people to my right and one to my left, and I can see all of them on their phones with their kind of up above the steering wheel so they can see their phone and the road. And I would like to think that they’re talented enough they can see both their phone and the road all the time, but I don’t think that’s necessarily true. And so I’m like, well, that might not be the safest environment ever. And yes, we would all like to see everybody else get pulled over for driving with their phone. But if you have an important message that came in or an important text message or an important message, why… You’re a good enough driver that you can just check that and it’ll be okay, right? Everybody believes that they’re the exception to the rule of not needing to do things. But because we don’t know our expiration dates, we can’t quite time it that way. I’ve actually had some clients who sign things and then die in the next day or two. They’re usually my clients who are in their late 90s or early 100s. And I’m like, well… I’m glad that we got it done, but that’s not quite the timing that I was hoping for. I was hoping that we could sign stuff and then you would not expire within a day or two. I kind of like my clients to stick around. It’s how I am. 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. Once again, 720-394-6887. So we’ve got people who are trying to do that, trying to plan, trying to get to the moment where they would never have to redo anything because they’re not going to live long enough and everything in their life would be all perfectly laid out. And that’s great. And people who can do that, people who have that happen, good for them. Fortunately, I have found in my practice that doing your estate plan does not necessarily lead to or cause your death. I have many people who I’ve done estate plans for, and they’re still around 10, 15, 20 years later. Sometimes they redo the estate plan, sometimes they don’t, all those type of things. And I don’t know that it’s necessarily going to be the type of thing where I’m not going to say, oh, well, if you’ve done your estate plan, then you can go ahead and die. I’m like, nah, we just know what’s going to happen to your stuff when you die. But one doesn’t cause the other. You don’t be like, okay, well, now I’ve done my will, and I’ve done my estate plan, and now I’m going to die, and it’s all there. I mean, I think back to some of the videos I’ve watched about the death penalty process in Japan. And in Japan, apparently there’s not really a set time frame, and there’s not like a, you know, in the U.S., you’re like, hey, we have an execution date. Okay, well, you know, there’s going to be, legal maneuverings, legal wranglings. And then, you know, there can even be kind of the last minute, the phone ring, and it’s the governor or the president saying, no, call off the execution. You know, that’s, you know, that’s, I mean, that might be a little bit more Hollywood than realistic here in the U.S., but, you know, there’s plenty of things that happen with that. But apparently in Japan, when they decide on your death warrant, you have like 24 or 48 hours or something like that to live. And so the process is they’ll come in, they’ll tell you the death order has been signed. They sit you down, they write your will, you know, you write your last will right there with them. And then they’ll take you in and to the execution chamber and carry out the punishment. Well, you know, then that’s another way that you would know when your death is. But I don’t know that I would, I don’t think I’d want to be an attorney who is like, oh, say, what do you do for a living? Well, you know, I work in the prison, and then when it’s time for prisoners to die, I get to go and write their will and then send them out the door knowing they’ll be executed in the next half an hour. That doesn’t sound like the kind of law practice I would want to do. I like to, especially for my clients who have younger kids, so I have clients who have kids who they’ve just had their first kid, so they’ve got a six-month or a one-year-old, and they’re like, oh, I want to set up my will. And I’m like, cool, let’s do that. and what i really want to do is be able to have you come back and say oh well you know that child that was one year old well now they’re 18 year old and going off to college and so we need you to write them a power of attorney that will allow us to make medical or financial decisions if they become incapacitated with their adults and my response is cool i’ve had you as a client for 18 years and you guys have been happy and healthy That’s the kind of effort I’m looking for. That’s what I want to see. I tell people, especially my younger clients, I’m like, yep, I would like nothing better than to write this for you and you not use it for the next 30, 40, 50, 60 years. If you’re 25, you had your first kid, you’re like, cool, hopefully I can write this and you won’t use it until you’re 75 or 80 or 85. That would be amazing. That would be awesome. then you just have it in place there just in case and i think there’s lots of things that we have there just in case now you know estate planning just happens to deal with their own mortality so we’re a little bit you know more unsure of it so things like i’m looking out the window here watching the cars drive by And I’m like, you know, you have auto insurance. Well, does your auto insurance pay for a, um, oil change? Is an auto insurance pay for new tires as an auto? And does auto insurance pay for, um, you know, your brakes to be checked? It doesn’t, you know, health insurance would do that like as checkups and preventative stuff, but. Not necessarily on a car. But, you know, all these people driving around, they have auto insurance. And why do they have auto insurance? Because if there was a car accident, the auto insurance could pay to either fix the car or replace the car. If somebody was injured or killed, then it would pay for their car. you know, the medical expenses or for, you know, the burial costs and funeral expenses. And then if somebody’s killed, likely there’ll be a lawsuit of, you know, wrongful death. So to punish the driver who was doing the wrongdoing and, you know, if that resulted in death, then that would make sense. we have life insurance you know life insurance is you know i mean really i think al smith would agree with this life insurance really could be called death insurance at least from a a term life insurance thing because life insurance doesn’t pay out unless somebody passes away so i mean you know my life is insured for something like two and a half million dollars so if i die then my Wife gets a payout of $2.5 million. Cool. The trade-off is she doesn’t have me, and at least for right now, she likes me more than she would like the $2.5 million. So I’m not too worried about that. But if I pass away and there’s $2.5 million that gets paid out, then my wife can do things like pay off the balance due on the house and pay off. We own our cars outright, but if we had a car loan, you’ve got enough life insurance that you can pay off the house, pay off the car, and then with $2.5 million, she wouldn’t necessarily have to go right back to work and get going on things because she would have $2.5 million that she could either live off of or use to invest and live off the dividends and interest from the investment or start a business or do whatever she wants. But it’s going to be enough money that she can be taken care of. Now, I purchased some of that life insurance when I was in my late 20s, probably like 28, 29. So if it’s got a 30-year term on it, that means when I hit 58 or 59, that term insurance is going to say, hey, if you want to renew us, we’re going to cost about 10 times as much. But hopefully you’ve lived your life and paid for things. And if I die at 58 or 59, I will be old enough that my kids will have been grown and they’ll be off to and probably even through college and living their own lives. And so a lot of the things that would have been my responsibilities as a younger man and a younger father would have been already covered by me working and handling and taking care of things well you know life insurance is there to replace the potential lost income that i would have and you know it’s they tell me that you’re at least i don’t know if this is still the rule of thumb but financial planners have told me that you should have 10 times your annual salary. Well, 2.5 million is more than 10 times my annual salary. It’s higher than it probably needs to be. But I have the insurance policies I have. If they’re now 10 or 15 years into a 30-year term policy, I’m not going to be like, oh, I should just cancel this. I’m like, nah, it’s inexpensive enough. that because it was set up under the rates from when i was younger that if i were to die you know it doesn’t have to be 10 times my salary i mean it’s probably it’s more than that i wouldn’t i’d have to divide it out and do math and i don’t really want to do math right now in my head on while i’m sitting trying to talk on the air you know that sounds like a Not fun exercise, but it’s just enough that my wife and kids should be taken care of. But you hit your 60s, 70s retirement age, then the math there flips. So right now, when I got a 30-year term policy, when I was 29 years old, the insurance company was betting that I will live more than 30 years so they won’t have to pay a single thing. They’ll just collect the premiums from me And then after 30 years, the term will expire, and it’ll be like, okay, we’re done. We don’t have to do this anymore. And that’s the math that the insurance company has, thinking that they don’t necessarily, for most people, they’re not going to have to pay out. Now, for some, they do, and that’s why you have a whole insurance company that It ensures lots and lots of people and kind of pools everything together and then does their investment side of things. But when you start to hit retirement age and get older, that flips. 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, 720-394-6887. So when you’re 60, 65, 70, and you say, oh, I want a 30-year term policy. Well, if you’re 60 years old and a 30-year term policy, that puts you to age 90. Or if you’re 70, 30-year term policy to age 100. Well, insurance companies, they’re going to look at their actuarial tables, which are all the survivability tables and stuff, and say, well, we don’t think that somebody who’s age 60 or 70, we’re… much less sure that they’re going to make it to 90 or 100 than we were that the 29-year-old would make it to 59. So because of that, we think we’re going to have to pay out on these. We’re at a much more higher likelihood we’re going to have to pay out. So they’re going to make that cost a whole lot more. So, you know, whereas I pay… $29 a month for $1 million of life insurance, if I was 60 applying for life insurance, I’d be like, well, maybe that $29 a month should be $2,900 per month. So we’re just going to charge you a whole lot more because we think that… You’re much more likely to die, and since you’re much more likely to die, we want to make our money and get a fair amount of that money in before you pass away so that we’re still profitable. Like it or not, an insurance company is like every single other company in the world. They want to make profit. And if they don’t make profit, then they’re not going to stay in business. So insurance companies, especially those with term life insurance, are betting that you’re either going to outlive the term of your insurance or they’re going to price in enough money that they would still make money off you. Because if it was $2,900 per month, right? So that’s going to be $34,000 per year. So on a 30-year term policy, over that time, you would pay $1,044,000 in premiums. And if you only get a million-dollar payout, if you get all the way through the 30 years, then, hey, you’ve paid more in premiums than you would get paid out. Now, clearly, they’re not going to… Clearly, if they don’t think they’re going to get the full 30 years, if they think they’re going to get half of it, then they’ll just… They’ll go ahead and they’ll price all those things in so that they can make money. And so life insurance is great for the young man’s game. It’s not so great for the older person’s game. That’s just how things go. Now, I mean, I see the commercials for like burial insurance plans where they’re like, oh, well, you can pay us $300 a month. And then when you die, we’ll cover up to $15,000 or $20,000 for your burial expenses. Like, okay, cool. well if you have a full burial with a nice casket and everything you can exceed that number but also then let’s say you you know you pay into that plan your 300 or your 150 a month for you know two years and so now you’ve paid a couple thousand dollars and then you pass away They’re like, oh, well, you know, did mom and dad want to be buried or do they want to be cremated? And they’re like, oh, which one’s cheaper? Well, cremation is so much cheaper. Okay, we’ll do that one. So now they’re only paying out, you know, $3,000 or $4,000 for cremation. You know, they’re going to make their money there. So whatever you do and, you know, trying to plan ahead, you know, whether it’s life insurance, you know, I mean, estate planning is kind of what happens to your stuff insurance, right? I’m not going to try to price in premiums of how can I make money off of you for the rest of your life. I’m like, hey, I will charge you for the legal work that I do. And then if there’s more legal work to be done down the road, we can handle that. I got a different call from a different client today where… They’ve moved and they want to update everything to have their current address on it. I’m like, well, so at the back of your trust, you can put your current house on there as being owned as real estate that you own. You can cross off the other one and write that it was sold on a certain date. But you don’t need to update all of the documents just because you moved. They’re like, oh, well, that’s great. I thought we needed to do that. I’m like, it would be great for me if you did. It’d be great for me that if every time you moved, you had to update things and then I just charged you for it. That would be awesome. But that would also definitely push people to not plan ahead early and get more towards that. Hey, I’m going to guess when I’m going to die or, well, I’ve sold my house that I lived in. I moved in too. a one floor ranch. So now I can stay here until I do pass away. So now I can think about estate planning. But so, I mean, a lot of times when people will call me and say, oh, I need to update this. I’m like, okay, what do you need to update? Oh, just, you know, we’ve moved or this person’s address changed or this person’s phone number changed. I’m like, okay, you don’t need to redo all the documents. You can put together, you can just put together a, hey, current contact information. And then you keep that with the document. It’s not an official part of the document, but it gives somebody more information so that if somebody is trying to contact your agent because you become incapacitated. They can call it the current number, as opposed to an old number that isn’t necessarily going to get them what they want. Um, you know, there are some, you know, when people are like, oh, I need to change who the personal representative is, or, you know, my son who I wasn’t talking to, we’ve now reconciled. So we need to leave an equal amount to them. Like, yeah, those are things we ought to change. But estate planning being a one and done and everything, I’ve had people be like, oh, why can’t you just put something in there where the assets go and then there’s a spot where if we want to change our mind, we can just handwrite it in and fill it out. I’m like, if that were the rule and that were the law and that were allowed, I would totally do that for you. And in some cases, for like tangible personal property, it is. But other things like wholesale changing of, oh, we have three kids. We want to live it three ways. Oh, one’s not talking to us. We want to leave it two ways. Now they’re talking again. We don’t leave it three ways. Those are things we need to change. Those are changes in life circumstances. So getting your estate plan done, you can get it done early. You don’t necessarily need to get it done often. But the concept that you’re going to get it done once and nothing will ever change isn’t necessarily what we’re doing. So thanks so much for listening to Mobile Estate Planning with Michael Bailey here on 560 KLZ AM. I’ll be back next week. But for right now, stay tuned for John Rush and Rush to Reason. Thanks and have a great day. Bye-bye.
SPEAKER 02 :
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.
Tune in to this episode of Mobile Estate Planning with Michael Bailey as he delves into the nuances of timing in estate planning. Many individuals wish to create a solid estate plan once in their life, but unforeseen life events often necessitate updates. Michael shares stories of clients grappling with such challenges and offers solutions that balance rigidity and adaptability.
