[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 560KLZAM. 100.7 FM, the KLZ 560 Radio App, or just in general if you happen to pick up a signal that is bounced off some sort of satellite or something, that’d be awesome. The 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 trying to do something besides just leave your family alone, as it says in the opening song. But sometimes despite our best efforts, not everything turns out the way we want it to. Sometimes that’s because we have misunderstandings, sometimes that’s because we have unmet expectations. Sometimes it’s just because we change our minds. And all of those things happen, but not every time that happens, does that mean it is the fault of the person who made the will or the person who is the beneficiary of the will or the person who drafted the wills and attorney, you know, it can get all convoluted. And sometimes we have unmet expectations that people think they will assign nefarious motives to and things like that. And sometimes these stories are funny, sometimes they’re worse. So we can start with a funny one that came from my world. So several years ago I drafted a trust for a lady. She was, she was an older lady, she was kind of retiring, getting towards retirement, didn’t have a ton of money coming in. And so we talked about how she’s, all of her relatives were either on the east coast or on the deep south, which is always fun when you go, okay, so you have some relatives in Rhode Island, a bunch in Virginia, and some down in Mississippi and Alabama. I’m like, that’s, that is an interesting spread of people. But she was very concerned that she didn’t want the people from the east coast and Alabama lots of need to go to the, as I come here to Colorado to take a will through probate. So I explained, you know, how it trust is something that can avoid probate because when you, when you have a will, a will, when someone dies, you take the will to the probate court. And one of the reasons you do so is that the probate court will then give the named personal representative or is called another states and executive or executive tricks. So it will give them permission, legal power to act on your behalf to gather your assets. And this makes sense because your bank and your investment company and the county and the you know, the insurance company who ensures that your house or you know, the county that is concerned about who owns the house, they don’t want to let anybody just willy-nilly walk in off the street and be able to access your assets, you know. If I walked into the same bank that Mr. Luke has an account at and I said, my name is Luke, I need to access Luke’s account. The bank isn’t going to be like, “Whew, gee, it’s good to see you Luke. What can we do for you? Oh, you want to withdraw the $38 trillion that Luke has in his account?” By all means, would you like that in 10s, 20s, 50s or 100s? I mean, I don’t think the bank is going to confuse me for Luke and the bank is probably not wanting to give Luke’s money to me. That sound correct, Luke? I would hope so. Yes. So, same would be true of like an investment company. If I walked into say, “Fidelity,” and I said, “Hey, I need to see all of Luke’s information and I need all of Luke’s information to be sent to me so that I can access all of Luke’s investments so that I can liquidate them and pay them all to me, Luke, then that would be great.” I don’t think the investment company wants to do that. Do you know why the investment company wouldn’t want to do that, Luke? It probably costs them a lot of money when the right person comes in and says, “Hey.” It’s because when you, the real Luke showed up and you wanted your money and they’re like, “But we already gave it to you and you’re like, ‘No, you gave it to a fake Luke. You gave it to an imposter Luke.'” Well, the investment company in the bank are now going to be like, “Oh, we have to give you your money even though we gave it to the wrong person.” So they’re not super keen on just giving away money to the wrong people. The same goes for a house. If you go to sell a house, the person buying the house wants to be sure that they’re buying it from the person who actually owns the house. If I went to sell Luke’s house and I’m like, “Oh, I’m going to sell Luke’s house. That’s what I’m going to do.” I’m going to sell Luke’s house and I’m going to sell it for $500,000. Then Luke comes home one day and there’s movers who are moving somebody into his house and he goes, “Wait a minute. This is my house.” The buyers say, “Well, wait. We bought it. We bought it from Luke.” You can look at the deed and there’s a deed there that says it was sold by Luke to these people. But you look at it as Luke. You’re like, “That’s not my signature. That’s a fake Luke.” Well, part of the reason we have title companies and banks are going to be very careful about that because a bank doesn’t want to lend money on something that somebody’s not going to own. Luke, if you got a loan for $400,000 from the bank, you’re like, “I’m going to buy a house.” You’re like, “Cool.” Then somebody sells it and the other bank’s like, “Oh, we’re going to lend $500,000 to this new buyer to get the house.” Well, suddenly this, and then the new buyer finds out that in fact they bought it from a fake Luke. And so they don’t have the house, but now the bank has lent out $500,000 that the fake Luke has probably taken and pocketed and run away. All of these entities, all of these groups, the investment company, the bank, the title company. They’re all trying to make sure that it’s really you that transfers assets because they don’t… We want to… It’s one of the things that a government does is they protect private property rights and they can enforce that my house is my house. Luke’s house is his house. And my car is my car. Luke’s car is his car. So that I don’t just walk out and I’m like, “Oh, my car won’t start.” Well, fortunately I can just walk next to the car and it’s parked next to me. Just take it because Luke won’t mind. He’s a very generous kind sharing person. He doesn’t need his car in the future. It’ll be my car and then he can go to the next person’s car. I think that would be great if we all had the exact same type of car with the all had the exact same time of specifications on our car. And I don’t know about you Luke, but I keep things like my computer or I keep a coat in my car. So if it’s cold, I can grab a coat. So I have some things in my car that aren’t just, “Hey, I’ve got, it’s not just one form of transportation.” On public transportation, that’s why you don’t leave things on public transportation. If you’re sitting on public transportation, you’re like, “I’ll just leave my backpack here. I’m sure when I come back, when I get on the bus on the way back home from work nine hours from now, my bag will be there. Nobody will ever pick it up.” That sounds like a good plan Luke. No, this is a great plan. Okay, next time I take a bus, I will institute that based on your great plan. What bus are you taking by the way? I don’t know. At what time? Just so I know. I don’t know. I mean, I used to take the bus when I went, when I’d go downtown because it was easier than trying to fight traffic. But that was before I became the mobile estate planning attorney. Just like you’re listening to mobile estate planning with Michael Bailey here on 560 KLC AM or 100.7 FM. One 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 because of, yes, so my job was I worked downtown, I worked, I had a desk in the office and I was there all day. And as much as I enjoyed being in one spot all day, it’s part of why I became the mobile estate planning attorney because now I can go visit people where they are and drive around and it’s just more fun for me to do that than it might otherwise be. But as we, so this lady that I was talking to, she didn’t want to do just a will because she wanted to not force her relatives from the East Coast or the deep south to come out to Colorado to handle probate. And so probate, of course, is the legal process of getting assets from the deceased individual to the name to beneficiaries of the years. And so she didn’t want them to have to do that. So I talked about a trust and how a trust would be something useful and helpful for her because she could put her assets inside of the trust and then the assets inside of the trust would then pass according to the trust and what the trust said and not need to go through the probate process because the trust is an alternative to probate process and a trust is a private document that doesn’t need to go through probate. Now, if there’s a challenge to a trust, the challenge will probably happen in the probate court. But we’ve got, but you, setting up the trust, the idea was it was going to make it easier for her relatives to be able to get the money once she died and to pay out to where it needed to go. And so that’s why we ended up writing her a trust. Now along with the trust, I wrote her a will that would say anything not title the name of the trust would get dumped in there when she dies. I wrote a financial power of attorney and medical power of attorney and a living will. So I wrote the normal things that you would think we would write in a state planning package. And so we did that. And then I also helped her. She was asking me about, she was very concerned about how the economy was going to go and she was concerned that all of the money in her IRA was going to get lost because the financial system was going to collapse. And she thought that there was an imminent kind of like Black Friday drop in the stock market so she wanted to be out of that. So I helped get her connected to a fixed indexed annuity. And you know just my friends who were financial planners can understand why that might be a good thing. But the idea is that the annuity could grow when there were high interest rates and where when things grew. But if everything fell apart and yeah, so if you had a stock that was worth $100 and then you bought it worth $50 and then it was worth $100 and went up to $120. You’re like, oh, look at this. It’s going the right direction. But then that same stock instead of being worth $120 crashed and was worth $30. Now you’re like, oh, now I’m $20 underwater. And I’m, you know, if I sell that then I still get $30 a share, but I’m not going to have not nearly enough money. So one of the strategies that my friends who do kind of safe money investments tell me about is to have a fixed index annuity. So I suggested that might be a possibility for her. And it ended up being one that she took on. And so we, so she got set up with a fixed index annuity. So in case everything went backwards, then we had a, and so if she was concerned about that and so there was something that I helped kind of be like, hey, let’s go ahead and let’s see if we can help her accomplish that as well. So trust and then, yes, since I helped her get connected to the right annuity company to do that, every once in a while we had conversations about her estate planner. She’d call and ask me if she still, if I still thought the annuity was right for her. And I said, well, you know, you really had to run that by your financial planner because as far as I know, it’s still making some money for you. It’s doing okay. You know, it was an IRA and she was, she was older so she had to take out required minimum distributions. And I think Al Smith would probably be better to talk about required minimum distributions. But the short version is required minimum distributions from your IRA or 401K work like this. You put money in your IRA or your 401K. You probably got some sort of tax break for it for what you were living with. You got the tax break as you contributed to it as you were working. And then it grew over time. And then the idea is in retirement, you’re supposed to pull that money out and live off it because you save for retirement. Well, not everybody who has an IRA or 401K has to pull from that money. They may have other assets. So you know, they may have rental properties or they’re working a small part time job or they just have enough with social security and savings that they don’t dip into that IRA money. So the IRS and the government have said, well, when you reach a certain age, you need to start pulling it out of the retirement accounts. It can’t just sit there for forever because if it sat there for forever, then it wouldn’t be taxed and it wouldn’t be, and it wouldn’t be money that they get their hands on. And yeah, I can understand that. The government doesn’t want to send something up. It’s so good that they could never get their hands on it. They’re the government after all. They want to get their hands on that money at some point. So I talked to her about required minimum distributions and how she was getting those from the IRA earlier. And now that’s even though it’s in this annuity, it still pays out the required minimum distributions from the annuity. That’s just how it works. And she can take that money and put it in a savings account. She’s not required to save it. She’s not required to spend it. She’s not required to do anything with it besides saying, “Oh, thank you.” And pay the tax on the required minimum distribution. And that’s why it’s a minimum distribution. It’s not, “Oh, hey, we’re going to re– you’ve got– now you have a half a million dollars in your retirement account. You’re now 73.” Well, now you have to distribute all $500,000 and pay tax on all of it this year. No, there’s a certain dollar amount. A percentage you have to take out based on your age and how long things have been in the account because the government doesn’t want these accounts to last indefinitely. So I had some conversations with her about that. And what she could do when the required minimum distribution came out. And then how she could still have it saved and still have it. All of those wonderful– you still have all of her money. And you know, of course, it’s amazing how people think that because I am in a state planning attorney that I obviously am going to know all about knowing everything that there is, everything that could possibly be known about a state planning or somebody getting older. And you know what? I would love it if I knew absolutely everything. Wouldn’t that be great? I could be like, “Ha ha, I know everything.” But you know, financial people are like, “Oh, what do you think is going to happen to financial markets?” I’m like, “They will go up and down from time to time at various times and probably not up and down at the same time.” Or if they do that, it’ll be a weird day. You know, I don’t follow financial markets enough to be able to predict those type of things. Even I think most of the people in the financial world, they don’t necessarily follow that type of thing. You know, someone–there’s probably groups at places like Fidelity and Charles Schwab that will have all of their market predictor tools and forecasts and things like that, that they are the ones who study those and pay attention to them. And then they will publish kind of their best listen areas or findings. So that filters its way down from the group that spends their entire time focusing on numbers and you know, following trends and things like that so that they can then send it out so that the person who’s in the local Edward Jones office can read the report and say, “Well, you know, we think that inflation will do this this year and you know, our forecasts are this.” And it’s not that the person in the Edward–local Edward Jones office has done all of that research and figured it all themselves, but they’re taking advantage of the resources that are available to them from their company. And I don’t have those same types of resources. So sometimes when people ask me what I think is going to happen, I said, “I’m just not sure and it’s just not part of what I’m going to do.” And you know, even though I work in the state planning and aging place space, you know, not everything that’s ever connected to that is exactly what I would do. So you are listening to mobile state planning with Michael Bailey here on 560KLZ, also heard on 100.7 FM or the KLZ 560 radio app. The phone number to talk to me on the air is 303-477-560-0. And once again, that’s 303-477-5600. And my direct line is 720-3946-887. And again, that’s 720-3946-887. So this lady who we’ve set up a trust for and put her house and some other things into the trust, and I’ve been talking to her, you know, I talked to her a little bit about annuities and, you know, how they can be useful and helpful or, you know, what their benefits and drawbacks are and things like that. She called me a couple of weeks ago and I answered and I, you know, she says, “Well, you know, I need your help.” I said, “Okay.” So she told me a story about how she had had a medical procedure done. And this medical procedure was one that was somewhat experimental, but, you know, was kind of new and she thought it would help her with her particular ailments. And so because it was somewhat new, it wasn’t necessarily going to be covered by insurance. You know, it’s not going to be 100% covered by insurance, although that’s a whole separate game of any of us who have health insurance. We kind of know and understand that not everything will be covered 100% by health insurance because health insurance isn’t necessarily 100% coverage of absolutely everything, you know, and, you know, I’ve learned that over my time of being an adult and not having health insurance that covers absolutely everything all the time. Usually there’s copays or there’s out of pocket, maximums and things like that, you know, for those who have been adults and have health insurance, you know, exactly what I’m talking about, you know. I’ve had to switch health insurance plans many times since I became self-employed simply because one carrier would offer something and then they would offer, they wouldn’t offer a similar plan, the same plans, they’d have to do something different. And I’ve had to switch health insurance plans lots of different times as a self-employed individual because many health insurance plans are tied to our employment. And, you know, even at this point, my wife works for a fairly large company doing reverse mortgages and we run our health insurance through them because of the way insurance works that sense were on it. We can be on a group plan with a big, huge, large group of people who work for this company so we can pool the risk and then there’s less risk and it’s less money in premiums because they think overall out of the, you know, large group of people there’s not going to be, not all of us are going to need significant health care things all at once so we can pool our resources and but it’s better coverage that we can get as a large group of people than what I could get as an individual. So we have my wife, she is through her employment, we have our health insurance coverage and that’s been more stable simply because the company has a very, you know, they’ve kind of got the same group policy that kind of keeps going on and, you know, me being a solo estate planning attorney, it’s not quite as stable. But this lady, she got, so she, she had talked to her doctor and, you know, they’d kind of come up with what the cost was going to be and so she went, she had the procedure done and she thought she was good and then she got an unexpected medical bill from an anesthesiologist who, you know, oddly enough, when you have a medical procedure done, you know, we’re not quite the civil war where we don’t use anesthetic and, you know, we’ve evolved beyond that but this was, and she thought the total cost was going to be covered under the, what she’d just talked about with her first doctor and then she got an unexpected medical bill. So she called me telling me that she, since I was her attorney, I would need to go fight this unexpected medical bill. And I said, well, I was your attorney for the estate plan. I don’t necessarily handle medical cases or medical billing cases or medical malpractice cases. It’s just not part of what I do. And so I referred her to a friend of mine who handles medical stuff and he’s more medical malpractice but I thought he might know more about this type of thing than what I would. And so I gave her a name and a number and she called and apparently the person who she called did not call her back for a couple of days. And you know, and she called me very, very concerned that he had not called her back. She’s like, well, you know, what’s going on? I’m like, I’m not sure. You know, why wouldn’t he have called me back for a couple days? I’m like, I don’t know. Maybe he’s in court. Maybe he’s on vacation. Maybe he’s, you know, switching cell phone carriers and doesn’t, you know, and has had some sort of issue. Maybe he’s like me where my phone ran an update a few weeks ago and then just wouldn’t start. So we had to reset it to factory settings and go through everything. I’m like, I really don’t know. Apparently that was the wrong answer. I was supposed to keep tabs on my friend and what he was doing in his practice. Even though we are, you know, I live up in Thornton. He lives down in Parker. Everyone’s so why we run into each other at an office in the Denver Tech Center. You know, but apparently I’m supposed to keep track of absolutely everybody. I’m also supposed to take on any type of case that I could ever take on of, you know, medical malpractice or a building, a medical billing issue. I’m like, well, I do a state planning, but medical billing issue may not be quite what I’m doing. And so, she was wondering why she had me as her attorney. And I reiterated again, I’m like, I’m not your attorney for everything. I was just for the state plan. She’s like, well, you did a great job with that, but I can’t believe that you wouldn’t help me with this. So eventually she screams at me, thanks for nothing and hangs up. But I’m like, okay, apparently I got fired. And I was like, well, I’m not trying to be. I’m like, if I had knowledge or skills or ability to help you with this, I really would. But my practice is limited to a state planning. And even that, some people get mad when they want me to do something that’s outside of what I do. But I really do try to help people the best I can. I help with state planning, as you can tell. So I was telling the story. I’m fairly knowledgeable about a state planning. And I like to use the knowledge that I have to help you. So thanks so much for listening to mobile state planning with Michael Bailey. I will be back next week. Talk to you soon. Thanks and bye. Mobile state planning with Michael Bailey will return to ATX next Wednesday at 230 here on KLZ 560, AM 560, FM 100.7 and online at KLZRadio.com. [BLANK_AUDIO]