[music] Welcome to Mobile Estate Planning with your host, Michael Bailey. Over a decade ago, Attorney Michael Bailey turned his attention to a state 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. [music] Good afternoon and welcome to Mobile Estate Planning with Michael Bailey here on 560KLZ. So we can do something besides just leave your family alone. You’re listening to KLZ 560AM, 100.7 FM, the KLZ 560 Radio App. If you’re a Luke, you’re listening and sending this out so that everybody can hear because you know, we’re without Luke, I’d just be talking into the air, which I feel like I’m doing sometimes anyway. But you know, there’s that. Phone number to talk to me on the air is 303-4775-6000. And again, that’s 303-4775-6000. And my direct line is 720-3946-887. And once again, that’s 720-3946-887. So I have, I’ve had lots of people who have asked me about what, yeah, they would reduce state planning. People always have questions about what comes after. And sometimes people will want to know, you know, it’s kind of like, oh, well, you know, how will probate go or how will the administration of the trust go. And I am ready willing and able to answer a fair amount of those questions. But sometimes you want to get into the nitty-gritty details of who does what. And they’re like, oh, well, I’ll say, okay, well, here’s a good one yesterday. How do we, you know, what happens when somebody dies? And, you know, who do they need to contact? And who do they need to go to and call? And who do they need to bring the paperwork to? What paperwork will they need? And, you know, well, who would the bank do they need to talk to? And, you know, what paperwork will the bank have? And a lot of times I will say something like, well, each particular financial institution, whether it’s a bank or an investment company or an IRA company or something like that, they all have kind of their own unique policies and procedures. And because I don’t keep track of all of those policies and procedures, because I don’t handle the state planning or sorry, the probate or state administration side of things, I don’t keep track of all of them. And for some odd reason, I think it’s because I don’t work for them and they don’t care what my opinion is. They don’t run other policies and procedures by me, you know, it’s weird. I mean, it’s actually totally normal. You know, when, you know, when Wells Fargo changes their policies or their procedures on how they process what they do with the bank account after someone has passed away, they usually don’t, they will train their folks on that, but they don’t necessarily send out an email to all of the Wells Fargo deposit customers to say, just so you know, in case you die, this is the new policy in the procedure and here’s the new, you know, there’s kind of the internalness of that and that makes sense to me. Now, I think sometimes people begin to think that because there are laws involved that everything has to be done exactly one way and exactly one right way and that there’s no room for any sort of variations. Well, there’s always room for variations. There’s always room for some differences. I mean, the same thing goes with setting up an estate plan. I had a potential client asking me the other day if I could just meet with the potential client and their parents and their siblings and just help them, you know, know how to fill out the forms and then, you know, we could go from there and I said, well, what are we talking about the forms? Because there’s not just one form that you fill out and she said, well, you know, we’ve got the forms that we bought from Office Depot and I’m like, okay, let’s start there and stop there. The forms from Office Depot are exactly that. They’re forms from Office Depot. The forms from Office Depot don’t necessarily comply with all of the rules and regulations and requirements of Colorado law. And it’s kind of like, you know, when you go to find something on the internet, it doesn’t necessarily comply with all the formality is in all of the requirements of course. Colorado law. I have seen wills and trusts and, you know, I’ve seen wills that come from somewhere like LegalZoom or, you know, like will and trust.com. They’re free wills.com. There’s a whole bunch of them out there and they will say things like, well, you know, the executor, the executor tricks of this will is this person and they’re the executor, the each executor tricks is empowered to do this, that whatever. And then somewhere in their terms will say, well, you know, executor or executor tricks is the same term as an executor or an executor tricks or representative of the state or personal representative. And so they try to kind of have an overarching cover there. And I look at and say, well, the proper term under Colorado is personal representative. Now a personal representative is the same word and has the same meaning as an executor or an executor tricks. But it’s a and that’s just one kind of, you know, it’s not a huge deal, but it’s enough to say, okay, if we can’t even get the name of the representative right as a personal representative under Colorado law, I don’t know that I 100% trust what else is in there. But my client who wanted me to just help them fill out the forms, you know, we had to have a conversation about how there isn’t one form and that it’s not, you know, I guess she was misunderstanding, misunderstanding that my role is not to help you fill out a form, but my role is to help you as to figure out what it is that you want to do with your assets and how to transfer them efficiently and to the correct people. And so one of the ways to do that is with a trust, you could do that with a will as well. But I don’t just help people fill out forms. You know, not every single word that I write for every single document is written exactly for that document. There’s sometimes, especially where in a trust we’ll have definitions of Colorado law or adopted children or what would mean by education or what we mean by, you know, some legal terms of per capita each generation or per star piece or, you know, those type of things, you know, there’s different kind of standard or, you know, survivorship terms. There’s different kind of standard terms that are available there. And those standard terms are given to us by the state legislature and the Colorado Supreme Court. And oddly enough, I tend to copy and paste the standard terms because if they’re the ones that are approved by the Colorado state legislature and the Colorado Supreme Court, I’m like, well, those are the guys that make the rules. So we should follow them. It’s amazing. So there’s plenty of that. But everything gets customized to you. And a lot of times, I’ll be with you. I’ll be like, oh, you know, we just need to make sure this does this and let’s talk about what you want to have happen. I mean, I had my client just this morning. I was like, well, we’re talking about the end of life situations. And they said, well, you know, would you want to be kept alive by machines? And they’re like, well, no, but why would anyone want that? I’m like, well, let’s, you know, there’s people who believe that they’re going to be advances in medical technology so that if they’re in a coma for four years, then a breakthrough in advance would be able to let that person be cured and kind of, I guess, it’d be like either on a soap opera where the person can stand up out of their bed. After a five year coma, looking like they’re a tan tone, fit and ready to run a marathon. I’m like, well, if you’re lying in a bed, you’re not going to for four years, you’re not going to be in much shape to do anything besides be like, okay, now I’m awake. Now I have to figure out how I can stand and retrain the muscles that have probably atrophied a fair amount. You know, so there’s all those things to consider. So you are listening to mobile estate planning with Michael Bailey here on KLZ560. Also heard on 100.7 FM or the KLZ560 radio app. Phone over to talk to me on the air is 303-4775-6000. And again, that’s 303-4775-6000. And my direct line is 720-3946-887. And once again, that’s 720-3946-887. So we’ve got, so when you’re going to, you’re setting up in a state plan, I mean, it’s, I mean, and sometimes, you know, I write, you know, when I write a state plans, you know, I can, something that I can explain to something to somebody, to a protect your client in, you know, at 10, 15, 20 minute or 30 minute or even an hour long meeting, I’ll explain, you know, we’re like, okay, we understand what we’re doing, we understand what we’re saying. Cool. And I warn people, I’m like, yes, but what I just explained to you in the last 15 minutes, when it shows up to you, will all be in legal language, because writing things straightforward and just, you know, isn’t part of what the legal profession is super great at. Yeah, it’s less confusing now than it used to be. But still, you know, there’s certain terms like, if you want, if you make a will and you want to amend that will and just change a little part of it, you prepare what’s called a will codisle, not a will amendment, but a will codisle. And you say, well, why is it called a will codisle? That’s silly. And the correct answer is, because 400 some odd years ago in England, somebody decided to call it a will codisle, and the name stuck. And so now we use it that way, because why would we change it? That would be silly. That would be not the way of the law. And the law is, it’s pretty, sometimes it doesn’t change very quickly. It’s just the way that things go. So we’ve got, okay, we’ve got a will codisle. Well, it’s an addendum or an amendment to a will. We call it a will codisle. People will be like, oh, you just call that to confuse people. I’m like, no, I call that because that’s what it’s supposed to be called. I don’t get to make the rules. I don’t get to make the options of what things are called. When I’m talking to people like, it’s called a will codisle. We’ll talk about it as an amendment or an addendum. We can certainly use those words. But when I write it, it will be say, will codisle on it. And sometimes, especially when I’m writing trusts and we’re trying to write to satisfy the IRS, the IRS and the Treasury Department and the Treasury regulations, those are not exactly the most clear and straightforward types of writing that you could ever read. If you sit down to read a book, you’re like, well, I’m going to read a murder mystery by Agatha Christie. Or I’m going to read a fantasy book by Brandon Sanderson. Or I’m going to read a cool young person, young adult fiction by JK Rowling. Or I’m going to read a military thriller by Tom Clancy. These are all books that are super popular and people are going to read and they’re like, yes, you want to read the pages, you want to turn them, you get super into it. I just finished reading a biography of a gentleman by the name of Porter Rockwell. And I looked, you know who Porter Rockwell is? Porter Rockwell was a frontiersman and a bodyguard to another gentleman by the name of Joseph Smith or another gentleman by the name of Brigham Young. Do either of those names bring a bell or mean anything to you? No, I’m afraid not. So are you familiar with the Church of Jesus Christ, the letter of the Saints, also known as the Mormons? Yes. Founding prophet named Joseph Smith, second prophet named Brigham Young. I see. It was a guy who was a bodyguard to them. And you know, so just kind of a colorful character in Mormon history. So for those who don’t care about Mormon history, you necessarily need to read it. But he was also involved in what’s been termed the Utah War and when the federal government sent an army to keep the Mormons in line. And you know, so then the resistance to that and things like that. So just kind of a cool colorful character and someone who I’ve always been a little bit intrigued by having grown up Mormon. So I read his biography. His biography wasn’t quite as, you know, edge of the seat action as a thriller, you know, something written by Tom Clancy or Dean Coons of, you know, there’s a war going on and you know, the intrigue and the espionage. You know, it wasn’t cool. I enjoyed it. But it wasn’t quite as, ooh, let’s do this. But then you go and you read the treasury regulations. The treasury regulations are dense. They refer to each other. They’ll be like, oh, you know, this has defined in treasury regulation 13.7.4 subsection C, subsection A, subsection A.2.3.4. The third paragraph, the second line on the sixth page, which has a little bit of an indentation underneath it. So it’s an awfully specific, like, so they’ll talk about, they’ll go to that and they’ll go to that definition. But here’s what it means here. And you’re like, so then you have to go find that definition and you go back and forth. And you’re like, good gracious. So as I’m writing a trust to either reference those regulations or to reference the, or to write around those or to cite them, it can be a little bit, or a lot of law language. And so people will be like, well, what’s this all about? Like, well, that says that you can pick if you want the trust to be taxed at the trust level or to the flow, money to flow through and be taxed at the beneficiary level. They’re like, well, why can’t you just say that? Like, because that’s not the way that the IRS wants me to say it. And if I don’t say it the way the IRS wants me to say it, then the IRS won’t recognize it. They’ll be like, no, we don’t recognize that. It didn’t use the right words. We get to tell you what the right words are. So we have to use, so you have to use those words. Or like, but those words are confusing and overly cumbersome. And you use 28 words when three would do. So why are you? And because apparently, uh, IRS, uh, treasure regulations, they get paid by the word apparently. Not by the, not by the time it takes them to like, hey, if we put more words in there, maybe we’ll get paid more. Cool. Yeah, let’s do that. And I doubt that’s really how they get paid. But, yeah, they get paid by the hour and their government workers and they have unions. And so who’s going to tell them what to do? Nobody. That’s what how it works. You know, that’s the joy of government work and why governments can become incredibly inefficient. But, you know, government itself, you know, some of the laws tend to be very wordy. I remember years ago when the Affordable Care Act was, you know, up for debate. They said, well, and I don’t remember who it was that said, well, we need to pass it to find out what’s in it. You’re like, really? Shouldn’t you like read it beforehand and know what it is your vote non instead of the title of the Affordable Care Act? You’re like, ooh, that sounds great. Who wouldn’t want affordable care? Luke, would you want affordable care? Sure. Yeah, it sounds great. What does the Affordable Care Act do? The opposite. Are you sure? Pretty. Did you read it? No. I felt it. There you go. Yes. How about the Secure Act? This is Secure Act sound good? It sounds great. It does. Did it have the, it was supposed to secure retirement for all Americans? Oh. Did it do that? I don’t think so. It kind of changed the rules and made it a little bit more convoluted. Yeah. So, you know, when you throw the title of a bill and what you want it to be called, yeah, it’s one of those things. You know, we had the, I don’t think that the bill was entitled the Trump tax cuts, but it’s been labeled as the Trump tax cuts. And you know, some of those provisions may be good. Some may be bad. But simply because it’s been given the moniker of the Trump tax cuts, it’s not possible that it could be anything that somebody who subscribes to a left-leaning political philosophy or a proclivity to vote for Democrats could ever possibly agree with because, you know, it’s the Trump tax cuts. So therefore, it has to be bad. I’m like, well, that may not be true. You know, in a similar thing, anything that has to do with Bernie Sanders or a, you know, Elizabeth Warren or even Joe Biden or Kamala Harris, you know, I may not agree with some of their policies too, but that doesn’t mean that anything and everything they do is by definition bad or terrible for the country. I may or may not agree with what they do. I may or may not agree with what Trump did when he was in office. But that doesn’t mean that simply because it comes from one source that it’s good or another source that it’s bad, you know, there’s good and bad in all of it. So we have to weigh our, in what we’re deciding to do, we have to weigh all of that and look and see, okay, you know, this may be good, this may be bad. And so, you know, the tax regime that we’re living under that was, you know, revised and changed when President Trump was president, you know, those rules are still in place. And if they were to change significantly, it would change a lot of what I need to do as an estate planning attorney from some of the proposed changes. So you are listening to KLZ 560, also heard on 100.7 FM. This is mobile estate planning on those stations or the KLZ 560 radio app. Phone number to talk to me on the air is 303-4775-6000. And again, that’s 303-4775-6000. And my direct line is 720-394-6887. And once again, that’s 720-394-6887. So one of the things that goes along with the tax rules is that the current estate tax limit is 13.6 million dollars per person. So if you have less than 13.6 million dollars to your name, congratulations. You don’t have to worry about estate tax. If you’re married and between the two of you, you have 27.2 million dollars or less, congratulations. You don’t have to worry about the estate tax. Now, I don’t know a whole lot of people who have more than 13.6 million or more than 27.2 million. Yeah, maybe you know lots of people, Luke. I don’t. I mean, I know a few, but not a lot. I think I know one. You know what? Okay. Well, yeah, I know a couple, but not too many. And the estate tax limit is scheduled to return to roughly a $7 million level at the end of 2025 if the current tax regime and the current tax changes are allowed to expire, which is supposed to expire at the end of 2025. So if Donald Trump and Republicans were to be elected and control the White House and the Senate and the House of Representatives, they would probably pass something that would extend those tax cuts, possibly even expand them. If the opposite were true and come all Harris and Democrats were to take the White House and the Senate and the House of Representatives and the election in November, then they would either just allow those to expire or might instastute more tax cuts. But if the level went from $13.6 million to $7 million, that would mean if you have between $7 million and $13.6 million, now you got to do some different planning. Or if you’re married couple and you have between $14 million and $27.2 million, you have to do some different planning. And those types of, so that it just makes a difference. Now, does it make a difference for everyone? No, because, you know, I really don’t know that I could distinguish between people I know who have more than $13.6 million to, would also have more than $7 million. I don’t know that there’s a whole lot of them that are in that between $7 and $13. But I had a client this morning who’s like, “Well, you know, Democrats have money too.” So they may not want to, I’m like, “Yeah, but you got to call it something different. You’d have to call it the tax justice act or something like that.” I don’t know. We’ve got the Affordable Care Act, we’ve got the Secure Act, we’ve got the Tax Fairness Act, with that fly with Democrats. I don’t know. I think that would work. Good marketing. Yeah, I don’t know. You got to relabel it something else. It can have the exact same provisions, but it can’t possibly come from the other side because the other side’s evil. I know both sides feel that way. It seems like it gets more polarized as we go. So we’ll see how that works itself out. That particular part of taxation wouldn’t necessarily affect a lot of people. One of the other proposals is to eliminate the stepped up basis for capital assets. Steped up basis for capital assets kind of works like this. So, and we’ll use the example that applies to most people, is that you buy a house. If you buy a house, and then you live in that house, and my parents bought their house when I was like six years old, and now I am 46, so they’ve been there for like 40 years, which is kind of an amazing time when you think about it. So they’ve lived in the house for 40 years. Over the last 40 years, the house has gone from being worth $104,000 to roughly $750,000 or $800,000. So there’s a $700,000 increase in the value of the house. Now if they go to sell the house, they are allowed to exclude $250,000 per person from the sale of the house from being taxed as income tax. So if they sell the house for $800,000, they can subtract off the cost basis, which is the $100,000 they paid for it, and now they have $700,000 worth of gain. And that $700,000 worth of gain is what is taxed. Well, if you subtract off $500,000 from the $700, then there’s only $200,000 worth of gain. And my parents have remodeled the house, they’ve finished the basement, they’ve read on the carpet, so all of those things get added into the cost basis. So if they were to sell the house, they probably wouldn’t actually have to pay because over the last 40 years, it’s possible they spent close to $200,000 in investing in the house. So if they were to sell the house, then they could exclude that and not have to pay it. Now if they die and pass the house onto me as a child or to me and my siblings, then we would inherit the house worth $800,000. So we could sell the house for $800,000, and then there wouldn’t be any gain there for us to pay tax on. But if that were to be eliminated and changed so that we inherited the house worth $100,000 and sold it for $800,000, then we have to pay tax on the $700,000 in between. And that would significantly change what we do for passing assets along to kids. So there’s always changes coming, there’s always things that are different. And part of what we have to do and what we get to do is estate planning attorneys is that we keep up on those changes to make sure that your estate plan is working for you and doing what you want. So thank you so much for listening to Mobile Estate Planning with Michael Bailey here on 560KLZ. I will be back next week, but stay tuned for John Rush and Restor reason and we’ll talk later. Thanks and have a great day. Bye-bye. [Music]