[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. Welcome to Mobile Estate Planning with Michael Bailey, where we can do something besides just leave your family alone. The or listening to 560KLZ also heard on 100.7 FM, or the KLZ 560 radio app. A phone number to talk to me on the air is 303-4775-6000. Again, that’s 303-4775-6000. My direct line is 720-394-6887. Again, that’s 720-394-6887. My direct line is probably not going to be available for the next half an hour since I’m talking here, but still we can do that. As I was walking into the studio today, one of the other hosts asked me about a question about inheritance and things like that. Apparently, his wife works in oil and gas, and so has his deals with a whole lot with mineral rights. And mineral rights are one of those things that some people have, and some people don’t. And we’re not quite old-jead clampet, where you remember old-jead clampet, where he was out shooting at some food and up from the ground, came a bubble-incrude oil that is black gold and Texas tea from the TV series, The Beverly Hillbillies. Luke’s in there shaking his head. He does, you’re far too young to know the Beverly Hillbillies, aren’t you, Luke? Yeah, a bit before my time. I mean, it was… Beverly Hillbillies was probably more… I mean, it was like, I’d watched Saturday morning cartoons, and then it would come on afterwards. You’d get it to got Beverly Hillbillies or Mr. Ed or Hogan’s Heroes or something like that. So, if we could get away with watching a little bit more TV until our parents came and kicked us out and wanted us to go outside on Saturday, things like that. But, you know, Beverly Hillbillies. So, because the rest of the theme song continues, that the next thing you know, old Jeds a Millionaire, and the kinfolk said, “Jed, move away from there.” So, he packed up his belongings in his family, and they moved to Beverly Hillbillies, that is. And they had a cement pond. Do you know what a cement pond is, Luke? Is it a pond of cement? No. No. It’s a swimming pool, but they would call it a cement pond, because it was a pond that had just a line of cement. I suppose that makes more sense than just wet cement in the back yard. Yeah, right. So, everybody listening, we’re having to educate poor Luke on, you know, all these things. So, mineral rights. People that had mineral rights, you know, a lot of times people like, you know, when I’m meeting with him, like, “Oh, yes, well, we’ve got mineral rights.” You know, it’s like, “Gramma had mineral rights, and then grandma died and spread the mineral rights among the five kids.” And then those five kids, when they all died, they spread the mineral rights among their kids. So, now there’s like 25 grandkids, all of which have a one quarter, I’m already sorry, 25. So, we’ve got 25 percent of what, you know, now we’ve got one 25th of mineral interest that one point might have been valuable, or something, and paying out something that was worth having. But, you know, if you had the entire interest and you’re like, “Oh, now I’m getting a check for like $3,000 a month, cool.” Well, you take $3,000 a month, you divide it by 25. It’s just, it’s not nearly as much. You’re like, “Yeah, okay, well, now I’m getting what? $110 a month, cool.” Yeah, that’s not quite as awesome as being able to be a millionaire and move to Beverly Hills. So, it’s, and so, you know, just, and somewhere along the line, you know, so if you’ve got, you know, where you had grandpa, or a great grandma, or a great grandpa that had those. And they can move down the line, and apparently the other host’s wife takes a lot of time trying to track down what happened, you’re like, “Oh, you know, my mom said that she gave him to this, and they did this.” You know, somewhere along the way, somebody realizes that if they’re getting a check for $5.24 for the worth of oil royalties, they don’t really care, so they just kind of, they don’t, they never feel like they have to pass it on. And so it can become very problematic. And so, it’s a, you know, so he was asking me, you know, how, you know, in a state plan, do you put everything in there? You know, how do you find it? How do you, how do you, how do you track of everything? And they said, “Well, part of it comes down to that a will doesn’t necessarily have a list of all of the assets in a will. A trust, when you create a trust, there’s, at the end of it, there’s something called a Schedule A, which is where you can put, you can list out the assets that are owned by the trust, or what you’ve moved in there, so you know, if we move a house in there, address of the house. Well, if you go and you retitle your investment account in the name of the trust, you can write, okay, you know, my investments at Fidelity account number 1, 2, 3, 4. And if everybody has account number 1, 2, 3, 4, could you imagine how, just, that person’s like, “Well, how do they know about me account number?” I’m like, “I hope it’s more than four digits.” And, but, you can imagine being the person who’s like, “Yes, I got assigned account number 1, 2, 3, 4. Nobody will ever be able to guess my account number.” They’re like, “Nah, I guess it account 1, 2, 3, 4. Oh, that sounds fake, we can’t use that one.” But, so, in a trust, you can list out what’s owned by the trust, but in a will, you don’t necessarily list everything out. And that’s just the way that it’s done. And part of that’s practical, part of it’s just how the tradition is gone. So, in a will, you can say, “All of your real property,” which is the real estate and ground and everything attached to it, and all of your personal property, which is everything else, according to the law, two types of property, real property, and personal property, although, you know, less so here in Colorado and more so in Hollywood, if you have intellectual properties, so if you wrote a book or a movie script or something, you’re like, “Oh, I’ve got intellectual property, that can be more valuable.” But, that’s a whole, ideal of that less here in Colorado than I would in, like, a Hollywood type of environment where everybody’s got their screenplay that they’re trying to sell, and things like that. But, as we go, so, you get real property and personal property, it all gets split up this way, and people are like, “Okay, cool.” And then, you know, people are like, “Oh, well, you know, we need to have a list of all of the assets.” And I’m like, “Well, that’s not technically part of the will.” And we don’t necessarily want it to be part of the will. Now, if you want to, I mean, I will tell people, like, “Hey, it’s not the worst idea in the world to have,” kind of a compiled list of assets. My dad has put together, like, a three-year-ing binder of all the different, you know, “Well, I’ve got, if I have this insurance policy, or if I have purchased this investment,” or, you know, those type of things, you know, he’s kind of got it organized like that, works out. You know, other people will put together, like, an Excel spreadsheet of, you know, “Here’s my bank accounts, and here’s my insurance policies, and here’s my, you know, investment account, and here’s my IRA or 401K.” So, they can kind of compile a list so that people know where they should go looking for these types of assets. But those are not official parts of the will. So sometimes people get concerned about that, they’re like, “Wait a minute, that’s not an official part of the will.” You know, you know, how people know if it’s official or unofficial, I’m like, “Well, it doesn’t really matter.” So, let’s say that you put together a list of assets, and you put, and you put all of your accounts on there, and then you forget that you close out a bank account at, say, first bank. And so then you die, and your personal representative goes looking for an account at first bank, and the people at first bank say, “Well, we don’t have an account here.” That looks like there was an account, but it was closed four years ago, and they’re like, “Oh, okay, well, we tried.” But you don’t necessarily, you know, if it’s not 100% up to date, you know, there may be people who have a tough time going to find everything, because, you know, not everybody keeps track of absolutely everything they own, and doesn’t keep it all compiled, all in one spot. Some people do, other people don’t, but when you create your state plan, it’s not the worst idea in the world to have that, but it’s not an official part of the estate plan, and it’s not necessarily part of what I would put together as part of a will or a trust for you, that’s something that you would kind of do on your own. 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. 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 720-3946-887. Again, that’s 720-3946-887. So, you know, I did have a, I mean, I’ve had some people who, you know, have been very upset about things like this, they had a gentleman who, you passed away probably, seven, eight years ago now, and I put together a trust for him, and he assured me, and so, when we put together a trust, I give people different options. I will instruct them on what they would need to do to get their assets inside of the trust, and then I give them the option of doing it themselves, or trying it themselves, or if they need my help, then I will help them, or I’ll give them the option that they can hire me to do it all for them. Now, most people don’t necessarily end up choosing the hire me to do it for them, because I get really expensive to stand in line or to wait on hold. You know, people are like, “Oh, well, can you go record this deed for me?” I’m like, “Sure.” That deed is going, needs to be recorded at the Jefferson County Clerk and Recorder’s Office, which is about, depending on the time of day, half an hour to an hour long drive away from my house. So, I would be happy to drive down there, I’ll stand in line and record it and come back. So, it will probably take me, you know, drive time, to tell me about an hour total. So, I will need $200 to drive down there and do that. They’re like, “Well, I can go do that for $200.” I’m like, “Yes, yes, you can.” Or, they’re like, “Oh, well, can you just contact my…” They’re like, “Oh, well, we’ve got a…” We’ve got a… I can’t with Edward Jones. Can you go put that all in there? I’m like, “Cool.” Well, sometimes I can get a hold of the local Edward Jones person, sometimes they won’t talk to me. So, if I have to call the 1-800 number and sit on hold for 45 minutes so that I can then send them my power of attorney so they can review it so they can call me back and tell me I need to call back. So, I can sit on hold for another 45 minutes. So, I can get the form so they can send it to me so I can fill it out so I can call them back and sit on hold for 45 minutes before I can send them the form so that I can have them review it so they can call me back so that I can call them back and wait and hold for 45 minutes so that I can get it done. Now we’re at four or five hours of me being on hold to transfer their things and five hours at $200 an hour. Now they owe me $1,000 for that where they could have called their own Edward Jones person and said, “Hey, I need this done. The Edward Jones person wanting to give good customer service would be like, “Oh, hey, let me fill out that paperwork for you. I’ll send it to you. You need to sign here and here.” And it’s done. So, I mean, there are certain people who either are very busy or can’t figure out one way, one thing or another and I’m perfectly happy to help them but for the most part putting things into the trust, people, I feel like I give decent instruction and I have written instructions of, you know, what they need to do and then they can call the company and since each company has its own protocols and all their own ways of doing things, then they can move things in. So, the gentleman who passed away on me seven or eight years ago, he told me he would put everything in the trust and, you know, I was like, “Okay, cool, we’ll go for it.” Well, when he died, he had not put anything in the trust. So now his family was faced with needing to go through the probate process to get things out of his name and into the trust so that it could be distributed to the correct people. And he also did not have any sort of list of assets that he owned. I happen to know that he owned several annuities and several had some investment accounts. So, some, and they’re like, “Well, how are we going to find those?” I’m like, “Well, this is a very low tech solution but check his mail for the next three to six months.” And, you know, most investment companies send out a quarterly statement. So then you’ll know that there’s a quarterly statement. There’s an account at, in search of, you know, whether it’s Fidel Lee or Edward Jones or Oppenheimer or wherever it is or whatever, some other ones. Hartford, you know, there’s various places out there. And, you know, annuities tend to send an annual one. So, you could wait and see if you’ll get something from that life or a theme or security or a Minnesota life or a whole new one. Minnesota life for midfield national or, you know, Ohio national, any of these companies that are out there, you know, American general national westerns. You see, these are all companies that sell life insurance and annuities. And so, they send out, if they send an annual statement, you’re like, “Hey, I know I should go looking for that.” Because, I mean, as I keep me, if he kept records somewhere in his house, you could probably go find those and flip through and see if you can track those down. But, you know, the record keeping part of all of that isn’t necessarily the exact same thing as the estate planning part of it. Now, I am sure that there are estate planning attorneys and estate planning practices who are more than happy to compile a list of all of the assets and keep track of all of the assets and all of those type of things. I would bet that those type of attorneys probably charge extra for that. It’s not a, “Oh, hey, well, you know, we’ll just track down all of your assets.” And, you know, I mean, where I write a basic will package for 500 bucks, I’m like, “Well, when you call the person and they say, “Well, we charge two to three thousand for, you know, a will package.” They’re probably offering more than it may not be the exact same thing as what I’m going to give them. You know, I’ll do the estate planning. I’ll say, “Here’s some suggestions on you should put together a list of what assets you have and kind of keep a personal balance sheet type of thing.” And, you can do that if you want and that can be very useful and helpful to you. But, it doesn’t necessarily, but that’s not necessarily a part of the exact way that things are set up. And so, we, it’s not part of the estate planning documents itself. And so, we go, all right, well, we’re not going to, it’s not that I’m trying to avoid doing something like that. It’s simply in the world of trying to set up a estate plan, we’re setting up a estate plan and what happens to the things. And, you know, making a list of all of the assets isn’t necessarily going to be the biggest and highest priority on of what we’re trying to do in a estate plan. In a estate plan, I’m more concerned about who gets what, who’s supposed to be in charge, and how do we get them in that, then exactly what are all the assets. When I meet with somebody, I have an intake worksheet that kind of gives me an idea of what their assets are and about how much they’re worth. And, that kind of helps drive what type of estate planning we would do or where they’re going to go. You know, somebody has several real estate properties and has, you know, an investment, has an investment portfolio and then has a life insurance. So, like, well, I want the life insurance to go to person X so then they’re taking care of them, the rest of it can get split up by the way. So, it might cool we can do that. Or, if people are looking at, hey, how do we transfer assets so we can get the least amount of tax that’s due and say, well, all of these IRAs and 401Ks are going to be subject to income tax when you pass them on. So, you have to be aware of that and concerned about that and people are like, oh, how do we avoid that? I’m like, income tax is really tough to beat. And you’re going to have to pay the tax on it at some point. So, I know there’s some financial planning strategies. This would be more like what Al Smith would do on the show right before me. But where you can take IRAs and 401Ks and you start kind of paying them out to like an older couple who has a much lower tax rate than say somebody who’s in their peak earning years. You know, if you’ve got someone who’s retired and also they’re looking at a 5-10% tax rate and then you’ve got somebody who’s working who’s in a 20-25% tax rate. You’re like, well, you’re going to pay a whole less tax pulling it out at 5% as opposed to 25% basic math. But if you pull that money out, you pay the tax hit at the 5%, then you can reinvest that in something else like a life insurance policy that wouldn’t be tax when the proceeds pay out because of the nature of life insurance. So, you know, that’s one of the strategies that may be there and may be possible. It may not be what, you know, it may not be feasible. It may be that the time horizon or the tax hit is going to be such that it would be a bad idea to do that. But that’s why you meet with somebody like Al who can finish, who can kind of run all those numbers and figure it all out for you and where your break even point would be and why it would be a good idea or not a good idea. I mean, I have people who, yeah, anytime you have a financial idea, someone’s like, oh, wouldn’t this ever be a good idea? Yeah, that seems like there would be a bad idea in all cases. I’m like, well, not everything’s the same. So, you’re listening to Mobile State Planning with Michael Bailey here on KLC 560, also heard on 100.7 FM or the KLC 560 radio app. So, in order to talk to me on the air is 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-3946-887. And once again, that’s 720-3946-887. So, I mean, I think of it, and, you know, I mean, I’ve had people who have had financial planners to say, well, anybody who sells an annuity to a client over the age of 50 is committing financial fraud. And I’m like, well, I don’t know about that. It just depends on what you’re doing. And I have people who think that having a reverse mortgage is the worst idea ever. Well, my wife’s a reverse mortgage loan officer. And although we realize the reverse mortgage is probably not the correct solution or product for everyone, it could be useful and helpful to many people. And so, whether we do, you know, any financial choice or any financial thing, whether it’s, you know, trying to minimize taxes in the state plan or any of those reasons, you look at it, you’re like, okay, well, if we understand the benefits, we understand the drawbacks. And we understand the benefits, we understand the costs, then we can do things. And, you know, I think of my wife with the reverse mortgages. And sometimes you get the kids who are like, no, we can’t do a reverse mortgage. That would, you know, reduce my inheritance. Or like, well, here’s a question for you. Mom and dad are out of money. Do you want to pay for their life? Or could we use a reverse mortgage to have some money paid out to them so that they can live. And thereby reducing your unherited and some, but then you don’t have to try to pay for their life right now because social security isn’t exactly the highest and best form of, you know, available income to pay for life. When you’re retired, I mean, it’s good. I’m like, yes, if you have social security, it’s great. Cool. You’ve got some money to live off of. But that social security may not go as far as you think it would. And if there’s unexpected expenses or, you know, and we, we got hit by a hailstorm not too long ago and our insurance is paying for a new roof and some new windows because they got hit. But there’s still a deductible in there. We’ve got to cover the cost of the deductible. And what if there’s a medical expense? What if you, you know, my, my parents, both have been diagnosis diabetic and my dad has had quadruple bypass surgery. And so, you know, these are, there’s more medical expenses involved. You know, so if there’s an unexpected medical expense, social security may not cover that. So, well, hey, a reverse mortgage might not be the worst thing to have in place to be able to help, you know, handle things. But does that mean everybody needs to run out and get a reverse mortgage? The moment they turn 62 or 65 or 70 or 75, you pick your age? No, it doesn’t because reverse mortgage is continue to, you know, they, the crew interest on the amount that’s on the outstanding amount. So, I mean, my wife will have people, they will do reverse mortgage and kind of have a line of credit against their house. But they never pull anything from it or there’s, it’s just there. So in case an expense comes up, they can pull out, you know, they’re like, oh, hey, we need $10,000 to cover a deductible for a, for a, for a help claim. Okay, you pull $10,000 out. Well, if your house is worth $300,000 and you’ve only got a $10,000 amount that you pulled out, it will accrue interest. Yes. But when you pass away and the house gets sold and money gets distributed to your kids, if there’s only $290,000 to distribute, okay, cool. But you got to pay your own things without trying to get your kids to, you know, to take that money from the kids. So there’s lots of different possibilities and options and available things and that’s true of financial things, that’s true of a state planning, that’s true of all of the different and possible ways that things happen. And so in a state plan, you know, if we’re, it’s like, okay, every time we do a will, we’re going to put a list of all of the assets. Okay, that sounds great. And then if your assets change, do you then need to come back to me so I can re, you know, I can redo the will. Well, that would be great for me as in a state planning attorney. It would be like, cool. Every time you change assets, so if you open a new bank account or if you get a new health insurance plan or you move houses, you got to come back to me so that I can, re-write your state plan. Well, you know, that sounds great. I’ll have to charge my fees for that. Or, you know, if it’s something that we’re going to have to rewrite in the future, like well, instead of being able to offer you a $500 will, I can only offer you a $3,000 will because in the future, if you come back, we need to change it, I need to cover what potential future costs there are. Or, you know, it’s like, okay, well, $500 and every time you come back and I need to update it, it’s going to take me half an hour so I’m going to need $100 every time you change assets. Well, then you have to, then you’d have to consider, well, do I need to buy a new asset or just so I put in the same asset. Or then you play the game of, well, if I wait until right before I die, then I can get all of the assets in there and they don’t have to change them and then my timing is perfect. And I’m like, that’s great except for nobody knows when they’re going to die. And so that timing can be very difficult. Or if somebody is like, oh, well, you know, I got diagnosed with inserture disease here, you know, MS or Parkinson’s or cancer. So now is the right time to do that. Well, cool. Except that now we’re planning into the problem of, do you have enough time to get your state plan done and everything implemented. So that’s one of the things that people get concerned about is, oh my gosh, well, what if I have to do my state plan in the future? I’m like, well, then we redo your state plan in the future. Well, what if I just, you know, buy a new house? I’m like, well, you don’t have to redo your whole state plan just because you buy a new house. You just know that that new house will be covered by the state plan. And so you don’t need necessarily a list of every single asset. You don’t need a list of every single person who might be involved. Instead, you, you know, the state plan is more focused on who gets what and who is supposed to carry out those instructions. You can give supplemental information in the form of a list of assets that is not an official part of the will. But then it’s a supplemental list of this to help give information. And you know, we’re not against information. It’s just not necessarily something that’s going to be compiled as part of the state planning process, at least by me as an attorney. So, you know, we do what we can, but then, you know, that every single detail for everything they could ever possibly be worried about is ever covered might not necessarily be the case just because of how things go. So thank you so much for listening to mobile state planning with Michael Bailey here on KLZ 560 or 100.7 FM. I will be back next week, but John Rush and Rush reasoned up next. So listen, keep listening and I’ll talk to you next week. Thanks and bye. [Music] 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.