In this episode, Michael Bailey provides insight into the essentials of estate planning, using relatable anecdotes and expert advice. Learn about the importance of a reasonably prudent attorney standard, how to handle potential challenges, and why it’s important to be explicit when designing your will. With a mix of humor and expertise, Bailey makes estate planning accessible to everyone.
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.
Michael Bailey (Host) :
Good afternoon. Welcome to Mobile Estate Planning with Michael Bailey. So we can do something besides just leave your family alone. You are listening to KLZ 560 AM, possibly 100.7 FM. You could also be listening on the KLZ 560 radio app. Or, I don’t know, Luke has the pleasure of listening live. He gets to hear it before everybody else because as fast as the radio station… As fast as the radio signals may travel, they don’t travel anywhere until you send them out. Is that correct, Mr. Luke?
Luke (Host) :
That is correct.
Michael Bailey (Host) :
Yes. So Mr. Luke holds all the power. So I don’t know you’re holding the power itself unless you’re holding on to live electrical wires over there.
Luke (Host) :
That would be a different power, one that I think would get me probably more money.
Michael Bailey (Host) :
To hold on to live electrical wires? Yeah. Are you sure that would get you more money or would it get you more dead? Dead.
Luke (Host) :
I’m assuming I could survive it.
Michael Bailey (Host) :
It’s like when I go to replace an outlet or a socket in my house. You always remember that you’ve got to go turn off the power before you do that. And if you don’t, always remember that black will turn you black because it will make you dead. Yeah. you know, what we’re trying to not do, anyhow, and yes, I do replace the outlets from time to time, you know, when one doesn’t work, I actually have one, we had our kitchen redone, or the kitchen tile redone, and we had black outlets, and we put kind of a silver and white tile up, and I’m like, well, we actually, so we switched all the gray outlets, and I I was going to be super handy and I was like, I can do that. Well, don’t take me more than a couple hours in the morning. And so then I started, well, you know, when the outlet is like right on the wall and you can get right down next to it, it’s very easy to do when you’re hunched over the counter, reaching to things. It’s just, it’s, it’s still doable, but it takes a little bit. And of course I installed one of, I pulled out one of our GFI outlets and I, put the new one in, but their ground and live were switched. So it showed that it had power, but it wouldn’t do anything. So I had to go back and switch it up. And I’m like, yep, that’s what I get for thinking that I was doing something. I have a neighbor a couple doors down who’s a retired electrician. So I would text him. I’m like, hey, what did I do wrong? He’s like, what’d you do? He’s like, well, try it the other way. Did that work? Yes. Cool. Great. We’ll do it then. And, you know, I do have my very brilliant strategy for attempting to get all of these to test if the outlets are working. I have a little hand mixer that I plug into the outlet and turn it on. And if it turns on, I’m like, hey, it’s working. It’s a brilliant strategy. Not really.
Luke (Host) :
It’s better than my strategy.
Michael Bailey (Host) :
What’s your strategy?
Luke (Host) :
I just stick a fork in it. And if nothing happens, then it’s wrong. And if I get electrocuted, it’s right.
Michael Bailey (Host) :
So you do hold on to live wires. I see how you are. Not necessarily a brilliant strategy.
Luke (Host) :
No, not a brilliant strategy.
Michael Bailey (Host) :
But, you know, mine with a hand mixer is an effective strategy. I can tell if there’s electricity flowing properly or not. And, you know, it’s just one of those things where, you know, when we had our basement finished… We let an electrician run all the lines and do all the things that needed to happen because I didn’t really want to try to run electricity and I didn’t want to try to run a gas line. All of that would have been bad and wouldn’t have gone well. So, you know, probably because I’m an estate planning attorney. And what does this have to do with estate planning? Absolutely nothing. But, you know, sometimes we start off with stories. And, you know, it is Halloween tomorrow. So, you know, sometimes we can have scary stories. So, you know, scary stories of having overloaded an outlet and melted it one year when I was, I had too many, as I accumulate more Christmas lights and put them up, I overloaded the thing. And it’s a good thing it was on a GFI because then it could click off so that I didn’t burn my house down. you know things like that i don’t think that was really going to be a danger of doing so but you know when it clicks off and you’re like oh let me just plug it back in i’m like i don’t think that’s how it’s supposed to go if it clicks off that means something’s overloading it so it means don’t try again Kind of like when my daughter, we came home one time and she was trying to let the dogs out and she couldn’t get the sliding glass door open, so she went to push the little bar up, but the bar was stuck and there’s a little key that you can put that keeps it from coming up and So she tried to push it. So she went over and she got underneath it, pushed it as hard as she could and broke the little plastic thing. I’m like, yep, sounds about right. But sometimes when you don’t get it right and you’re like, oh, I’m just going to try again. I’m going to push through. You’re like, well, maybe we ought to try again. I had a client who sent me something and said, oh, well, you know, I want to do it this way and I’ve got this draft ready. And I’m like, okay, well, your draft kind of does something that isn’t going to be Is it necessarily going to fly in the world of estate planning? It’s like, oh, well, can’t we just do it anyway? And I’m like, you could. I can’t. Because it’s those different standards of, you know, when I do something as an attorney, I have to do something that would be that I’m bound by what is called the reasonably prudent attorney standard. So I have to do something that a reasonably prudent attorney would think would have a chance of being successful. So that means I can’t just make stuff up and do stuff. Sometimes I’ll be talking to people about estate planning and they’ll say, oh, well, I just want something that could never be challenged. And I’m like, okay, let’s talk about that. you don’t necessarily want something that can never be challenged because you can’t stop people from challenging things and you can’t prevent them from doing so. And it’s, you know, we can do our best to prevent them from winning, but they can still challenge it. They’re like, well, what do you mean? I’m like, well, So let’s say that you write your will and you give things out to kids. But, you know, one time 30 years ago, you told your niece that when you died, you’d give her $100,000. And so your niece is thinking she’s getting $100,000. And so then you do pass away and things get split up amongst your kids and your niece comes and says, well, I need my $100,000. And the person who’s splitting up money says, well, you’re not getting $100,000. It wasn’t given to you. And then he says, well, he promised me. So, you know, she can then file a suit that says, hey, I need my $100,000. And, you know, if we write the estate properly, write the will properly, they’ll get it. go to the will and say, well, it doesn’t say anything about that. And I’m sure that when you were promised that, when you were promised $100,000 so that you would go in and play in your soccer game and not sit on the sideline crying, that might have been an inducement to get you to play, not necessarily an actual promise that you’d get $100,000 when somebody passed away. And so, you know, that’s a silly example. I’ve never actually had that happen. But there was someone like Howard Hughes, as he got into his later years, he did kind of start promising people various things. And, you know, when he died and Howard Hughes was an aviation pioneer and, you know, ended up being somewhere around a billionaire, I want to say. It was very rich. All these people came out of the woodwork suddenly wanting to have their hands out and saying, oh, I need this, I need this. When you have a good estate plan that is all signed, it’s written, signed, notarized, witnessed, and all the things, then when someone says, oh, well, he promised me on the golf course that if I hit this chip once, within 20 feet of the cup that i’m 20 feet of the hole then i would get you know five hundred thousand dollars from him you’re like that’s cool that’s awesome i’m glad that uh you are out there on the golf course playing and i’m don’t even doubt that the conversation happened but the thing is with an estate plan if it’s not written down it never really happened so you need to write that in and you know i mean it’s uh You don’t want to cut people out. Well, sometimes you do want to cut people out. But for the most part, when you’re considering your estate plan, you want to make sure it’s very cut and dried of what you’re going to do and what you’re not going to do. And if there are people you want to cut out, you want to make sure that you say, hey, they’re going to be cut out. Now, you may not want to put all the reasons for that in there, but you want to at least say it. So you are listening to Mobile Estate Planning with Michael Bailey here on 560 AM KLZ, 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 again, once more, 720-394-6887 for my direct line. So, I mean, part of what you don’t want to do is you don’t want to be saying terrible things about people in your will or your, because there’s such thing as testamentary slander and that’s just not what you want to get into. So for my clients who do want to cut out a child for whatever reason, we usually say something like they are intentionally excluded and disinherited, which then it’s like, Hey, like we, we know who you are. We know where you are. We’re just not giving you anything. And, you know, people can be upset about that. People can be concerned about that. But it’s at least there. And part of the reason that happens is because of statutes that are designed to protect children who just kind of get who either get forgotten or didn’t get added to a will. Because sometimes you have I mean, I think of the when Kobe Bryant was killed. his trust did not name his youngest child in the trust. And we know that because his widow went to court to ask for permission to modify the trust to include the youngest child. Now that makes perfect sense. You know, if you’ve, if you’ve got three children, when you write a will or a trust and you end up having a fourth child and you’re like, oh, well, I, Forgot that forgot to update the will or the trust and didn’t name that fourth child. You’re probably not trying to cut that fourth child out. It just didn’t happen somehow. I mean, I’ve even read stories about, like, a woman who died in childbirth, and her will didn’t include the child that she gave birth to when she died. Like, well, that makes perfect sense. You’re not sitting in the labor and delivery room. Ooh, I better make sure that I’ve got my will and testament ready to update the moment that I give birth, because otherwise they won’t be covered. Well, yeah. Most of us, including me and my wife, when we had children, my wife did all the heavy lifting and the hard work there, to be clear. But it wasn’t the first thing on our mind of, hey, what are we going to do when we have this child? Well, I’ll have an updated will ready so that we can get it all signed, witnessed, and notarized. I mean, for people who come to me and they have young children, and without telling them whether or not they should or should not have more children, I usually will ask something like, so are we done? Are we thinking about more? Because if they’re thinking about more, then as we write the will, we can write into it that it says, this is for my children that I have now and any future born children so that they’re covered. So then when a future born child is born, you don’t necessarily have to update the will because you had a future born child, but hey, they’re going to get an equal portion and then they’re not left out. but because there is the possibility of people being left out and left out unintentionally or not on purpose, the Colorado statutes say, well, you know, if there’s a, if there’s an omitted child, then we’ll probably treat them the same as the other children would be treated. And so we want to take care of them and not have everything be just given to the other kids. So if you have a reason, and there are many reasons why you might want to, um, uh, have a, you have a child be a, be, um, you know, admitted from a will, you know, whether you’ve had a fight with them or I think the best reason I ever heard for doing a difference, a split of things was because, um, uh, I had a client who they had three children and a child who was, um, The oldest child was a financial planner and multimillionaire. The middle child was a doctor and a multimillionaire. And the youngest child was a third-grade teacher. And just because of how well or poorly, depending on your point of view, school teachers are paid… wasn’t exactly a multi-millionaire on a third grade teacher’s salary. So this client wanted to give 5% to their oldest child, 5% to their middle child, and 90% to their youngest child because the oldest two children didn’t necessarily need the money and the third one really could use it. That’s a great reason. That’s an awesome reason to do that. Now, if you have a child who I think there’s a Saturday Night Live skit several years ago where it was making fun. I don’t remember the original commercial, but it was like a parent driving their child to the airport to go off either to college or to join the military or something like that. The parents had their concerns and But, oh, they’ll be taken care of. They’re going off to college or university and or the military. I don’t remember which one it was. They’ll be fine. And then the Saturday Night Live commercial had one where it was very similar. They’re driving to the airport, and he drops his daughter off to join ISIS. He drops her off, and as he’s driving away, the guy in the truck is like, death to America. And I’m like, yeah, so if your child goes off to join ISIS or to – is ISIS still a thing? I don’t know. I feel like they’re – I haven’t been keeping up. I don’t know. I feel like there are other threats that we’ve been more concerned about than ISIS more recently. But, you know, I look forward to Wednesday of next week when we no longer have to watch political ads. I’m one that I cast my ballot last week. We get them by mail, so I submitted it. And I’m like, can I opt out of political ads now? Because, you know, political ads are always going to, you know, one ad says Congressperson A is great. The next ad says Congressperson A is horrible. They’re talking about the exact same issue. And then the next ad is Congressperson B is great. Congressperson B is horrible. opposition to person A is great. Opposition to person A is horrible. And I’m like, okay, really? Can’t you like try to sell, sell me something like a Teddy Ruxpin or something somewhere in there? I realized that Teddy Ruxpins are not for sale anymore. I’m showing my age of, you know, all of us who grew up in the eighties, who know what Teddy Ruxpin is. Are you aware of Teddy Ruxpin? No, I’m not. No. Oh, see Luke again we’ll have to get you a Teddy Ruxpin you have to look it up on the internet just so you can see what Teddy Ruxpin was it was just like animatronic talking stuffed bears kind of crazy and creepy all at the same time but I digress into you know my I’m glad for I’ll be happy when political season is over and we don’t have to watch all the political ads you know we can just enjoy watching a World Series game or a you know something like that Although the World Series, it was nice that the Yankees won last night just to push it to more games. Because as one who doesn’t care whether the Yankees or the Dodgers win, like, I just want to see a good series. And, you know, a sweep by the Dodgers would not have been quite as awesome. My friends who are from California and Dodgers fans, they would have loved it. But the rest of us were like, well, you know, if we want to see more baseball, we’ll keep it going. 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 once again, that’s 303-477-5600. And my direct line is 720-394-6887. And once again, 720-394-6887. So as you’re going through and trying to do your estate plan, you want to do it the right way. You want to get it set up so that your wishes can get carried out. And one of the things that I run into a lot is people will ask me, well, you know, how does this need to be done? How does this need to be done? Like, well, how would you want it to be done? Because there’s, and I suppose it’s understandable, but there’s this concept in the law that people have about the law that there’s only one right way to do things. Or there’s only one way that things can be done. And that may be true in other areas of law. So I’m looking out the window of our studio right now and I’m watching the cars drive. And I can see the cars that are driving… More north are on the right side of the road. And the cars that are on the driving south are on the left side of the road. Now, if you flip, that’s just the way I’m looking at it. But the cars going one direction are all on the right side of the road. Going the other direction, they’re on their right side of the road. They’re just facing different directions. But they are driving in opposite directions on opposite sides of the road, staying in their lanes, from what I can see, since nobody’s crashed into each other. And that’s why they do that. It’s because as they are driving, they stay in their lanes, they stay on their side of the road. so they don’t crash into one another. And I’m looking right now, there’s somebody who’s trying to turn right onto the street, they’re stopped at a stop sign, a couple cars went by, and now they’re going to turn right. And so they’re turning right when somebody is not going to be driving in that lane, so they crash into each other. So, you know, that makes a whole lot of sense of, you know, that the traffic laws exist so that the cars who are trying to get where they’re going don’t crash into each other. When it comes to things like doing your taxes. Even doing your taxes, there’s not necessarily only one way of reporting something. I mean, when an employer sends you a W-2 to show your wages… You’re like, well, there’s the wages. They are reported. Now I should report those as wages on my tax return. Yep, makes sense. But let’s say you’re self-employed. Does every dollar that you make as a self-employed individual turn into income or wages? Or can you deduct some expenses? Well, you can deduct some expenses. Not all expenses are created equal. I remember my first job, I worked for one of the big four accounting firms, and they gave us an example. They set up a mock set of income and expenses for Montgomery Burns, who, if we remember, is the owner of the nuclear power plant in the Simpsons. And so Montgomery Burns had his income that he made from working at the nuclear power plant, or at least from running the nuclear power plant, and then he had… some deductions for mortgage interest on a house and various things for business expenses. And, you know, among all of these things was listed a contribution to a political party. And so, you know, as we were kind of going through this case study of how to report things and all that type of stuff, you know, many people just took that contribution to political party and put it in a deduction. Well, a contribution to a political party may or may not be counted as a contribution to a charity. And charitable deductions you can have. So I happen to donate a fair amount to my church, and I donate to the volleyball program for where my daughter plays volleyball. at the high school so i’m donating to the school district which is a charitable tax exempt entity i donate to the elementary school where my middle school now where my kids go i donate to various causes we i have a niece who is a childhood cancer survivor and so i’m partial to donating to some of the childhood cancer causes And those are all, you know, legitimate things that I can deduct against the income that I make. And so I can offset some of that income and not pay as much in tax. Well, I mean, I can’t donate everything. Otherwise, I wouldn’t have any money. And then I wouldn’t be able to pay for food and clothes and things like that for kids. Yeah. And so because of that, we’ve got a bunch of… But there’s not one right way to… So sometimes a lot of people who own a house, when you are… You can deduct the home mortgage interest. Well, that’s great. But I happen to, you know, I own a house, I have my townhouse, which is the first house that I lived in. When I moved out of it, it was, I was underwater on it, so it became a rental property. So now as I have my home mortgage interest, I can report it on as, for my primary residence, I can report that one way. And then for home mortgage interest on the other house, I deducted against the rental income that I receive because of how those rules work. And I’ve paid off my student loans at this point, but when I did pay my student loans, After enough years, I was making just enough that the student loans were not going to be a deduction. So I was like, okay, well, if I put them in one spot on the tax return, it’s going to be disallowed. But if I put them over here on this spot of the tax return that, you know, offsetting, you know, this other type of income, then, you know, it can work. And so there’s, there’s, so is, is exacting and is, is, one right way as it might be to have an income tax, income and deduction, put them on a tax return, there’s not always just one right way. And because there’s not always just one right way, you can report things slightly different methodologies. And in estate planning and preparing your will or your trust, there’s usually not just one right way. If you want to leave money to your kids, you can do that outright. Or you can leave it in a trust. They would distribute out over time. Most of the time when you do that, you can pick ages in which case it would be distributed. You could also pick events. So you say… Well, we’ve got this event. So it’s like, oh, well, when you graduate from college, you can have this much money. Or when you get married, you can have this much money. Or when you buy a house, we’ll match your down payment or something like that. And it’s one of those things that as you go, you can’t just have… there’s not one right way to do it. The way that you want to do it can be put inside the kind of general guidelines of how to do it. But when we’re talking about your estate plan, that’s why it’s so important to have it be the way that you want to have it done. Because, yes, there are some ways, signed, witnessed, notarized, the technical rules need to be followed. But for the most part, how do you want things distributed? To whom do you want them to go? Who do you want to put in charge? Those are all things that are unique to you and aren’t just dictated by one right way. So thanks so much for listening to Mobile Estate Planning with Michael Bailey. My phone number again is 720-394-6887. And once again, that’s 720-394-6887. And we’ll talk to you next week.
Announcer (Host) :
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.
