Join Michael Bailey as he delves into the importance of estate planning, explaining its critical components and why having a solid plan matters for your loved ones. With over a decade of experience, Michael shares insights into the fundamental documents required for effective estate planning, including wills, trusts, and powers of attorney. By demystifying the probate process, he emphasizes the significance of choosing a trustworthy personal representative to ensure your wishes are honored. Learn about the different types of powers of attorney and their roles in securing decisions in both financial and medical matters. Michael underscores the nuances of
Welcome to Mobile Estate Planning with your host, Michael Bailey. Over a decade ago, attorney Michael Bailey turned his attention to estate law after he recognized the unacceptable number of adults without proper end of life planning. Michael recognizes that many of his clients have difficulty finding the time for making a proper estate plan. That’s why he became the Mobile Estate Planner. He will go to wherever you are to assist you with your estate planning, including writing wills, trusts, and giving you the information you need to avoid probate. Now, ATX, Ask the Experts, presents Mobile Estate Planning with your host, Michael Bailey.
SPEAKER 01 :
All right, good afternoon. Welcome to Mobile Estate Planning with Michael Bailey here on 560 KLZ AM, also heard on 100.7 FM or the KLZ 560 radio app. We’re here to try to do something so that you don’t leave your family just alone after you’ve passed away. Phone number to talk to me on the air is 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-394-6887. Once again, 720-394-6887. And so we’ve got – and you try to call me on the direct line for the next half an hour. I’m on the radio, so I’m not going to be able to answer. But otherwise, I’d be happy to talk to you. So we’ve got – every once in a while, I feel like we need to go back to what are the basics of what in the world is estate planning? Estate planning, it’s like, oh, it’s this – big scary concept or somehow oh you know it’s estate planning and there’s an estate and some people call it state planning without the e and state planning i’m not sure what that is i guess that’s you know like drawing the lines on the map and looking at looking at it and saying okay you know okay well we should you know we should have uh italy should look like a boot and it should be kicking sicily so it looks like a ball and you know here in the united states we should have colorado looking awful like a rectangle and we should have wyoming looking awful like a rectangle but you know kentucky can look like a piece of fried chicken and i’ve actually seen maps where if you look in like minnesota’s like the chef hat and then as you go down the mississippi it’s almost like a whole chef in tennessee is holding the fried chicken and And so if you want to go to Google and do that, so you can do that. Or state planning, I’ve actually seen it where if you draw the lines right and look at it, it’s like the whole world is a cat playing with Australia’s ball. Maybe that’s state planning. That’s not what I do. And I don’t know how to plan a state. If I did, maybe I’d be a governor or something like that. But I am not those things. So we’re an e-state planner. an estate planning attorney and an estate planning attorney you know i look at things and i go okay we’re going to try to figure out what happens to your stuff when you die who gets what and how do we divvy that up so the kind of the most basic estate planning document is the will it’s like the foundational document And a will says what happens to your stuff when you die. Who gets what? Who gets all of those things? And so we say, okay, all right, we’re going to figure out who gets what when you die. We’ll plan your estate, and we’ll put that in the will so that it says who gets what when you die. And that’s an important thing. Because we need to know who gets your sweat when you die, and we want it to go to the right people and not to the wrong people. Now, sometimes people, you know, they don’t have any real, you know, they’re like, oh, well, you know, I don’t really care who it goes to. I’m like, I would bet you care. And sometimes when I’m talking to people, they’re like, oh, well, I don’t really care where it goes. I’m like, well, cool. Then if you don’t have any preference, my kids could use the money. You can give it to my kids. And people suddenly are like, well, no, that’s not what we want to do. I’m like, well, then you do care. I’m not actually suggesting you should give it to my children. I’m just saying that you probably do care. You may not have a really strong preference of who gets what, but you do have someone you want to give it to or someone you think you want to put in charge of things, and that’s how that goes. And so that’s where you put that in your will. The will says who’s supposed to get what. And then the will also has the other part that says who’s in charge of that process. That person is known as a personal representative in Colorado. In other states, they’re called an executor or an executrix. But that’s the person who is in charge of carrying out the instructions of a will. Now, the personal representative’s job is they have to take the will to the probate court, and then they get legal permission from the probate court to transfer assets. So your personal representative gets legal permission from the probate court to act on your behalf. So then they can go claim your assets, and they can pay off your debts, and they can distribute the assets to whom they’re supposed to go. And by doing so, then you get your assets from you, the deceased person, to whomever you go. And people are like, well, how come they can’t just take the will? I’m like, well, that would be really easy. If I said, oh, well, you know, I know that Luke has billions of dollars, so I’m going to create a will that says Luke is giving me his billions of dollars. And then I go to the bank or to the financial institution. I’m like, look, here’s the will. I’m supposed to get the money. They just pay me the money. And I go on my merry way. That would be great. But here’s the problem. What if Luke is still alive? And what if Luke wants his own money, which is a perfectly reasonable position to take that you want to keep your own money. Uh, so my, um, so the, so the idea is that, um, you need to have, you need to go through the proper legal structures. So you need to go and you need to apply for probate and the court’s going to ask, okay, well, you know, when did this person die? And, you know, do you have proof of that? And, you know, maybe a death certificate or something like that. Okay. Well, now we know that you’re the properly authorized person. So we can give you legal permission, usually in the form of a letter testamentary or letter of administration, uh, that says okay you’re the properly duly authorized legal person to go claim the assets of the deceased person so then you can go to the bank or the financial institution say hey i have this proof from the court that i’m the person who’s supposed to be able to get these assets so i can take them and i can distribute them and so the people at the bank or the financial institution go oh okay they’ll they’ll get their paperwork like oh well the court said that this is the right person, the court has verified this, so we can go ahead and give them the money. And then the personal representative can take that money and give it to whom they’re supposed to do so. Now, the personal representative, let’s say, you know, again, in my example of Luke being having billions of dollars, if the bank or the financial institution gives me, the representative, billions of dollars, I now have billions of dollars. Cool. Well, if it’s supposed to go to me as a beneficiary, then I can keep that money. If it’s not supposed to go to me as a beneficiary, then it’s my job as the personal representative and as a fiduciary is to give… that money to the proper people. Um, and so, you know, if, I mean, if there were billions of dollars, there might be a temptation for me as the personal representative to be like, oh, well, you know, I got $3 billion. If I give this to the two kids, if I give them one for 1.4 billion a piece, they’re going to not, they’re not going to miss $200 million. I can just take that $200 million and I’ll be good. Well, except for that’s stealing and it’s wrong and it’s punishable by criminal prosecution and civil prosecution. And most people are not dealing with $3 billion. You know, maybe you sell a house, you’ve got $300,000. Okay. Well, 300,000 and you distribute it to the two kids and you send them $140,000 a piece. They’re going to be like, so what happened to the other 10,000 that I was supposed to get? And then the personal representative goes, uh, well, you know, um, it was time consuming. It was expensive and I had to get paid and, and, you know, personal representatives are allowed to pay themselves, but paying yourself $20,000 for taking will to the probate court and selling the house. I mean, it, it is possible. It took that long and took, you know, it was a, you know, if you’re in a, we’re in a tough real estate market and things like that. Um, I can see how that could be a problem. But for the most part, if you’re the personal representative, you’re supposed to just distribute the assets to the correct people, the named beneficiaries of the will. And a personal representative may also be a beneficiary of a will, but when you’re picking somebody to be a personal representative, you have to be very careful because there is the temptation that they would take the money and run. So you are listening to Mobile Estate Planning here on KLZ 560 AM, also heard on 100.7 FM, or the KLZ 560 radio app. Phone number to talk to me on the air is 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-394-6887. And once again, that’s 720-394-6887. So because of all of that, you have to be very careful about who you pick to be in charge of things because you want somebody who’s trustworthy. You want somebody who’s not going to go stealing the money. Ideally, you’d have somebody who’s financially responsible and financially set so they don’t have the same temptation that somebody who doesn’t. So if you’re looking at who am I going to pick, you’re like, well, I have one child who’s a fairly stable engineer and kind of keeps working. I have another one who works as a teacher and has a fairly stable income. And then I have one who’s in and out of jobs all the time and is currently working. at McDonald’s cleaning the restaurant. But they quit at Wendy’s last week, and then two weeks ago they were at Burger King, they quit that. That child might not be the best person. Not that there’s anything wrong with working at McDonald’s or Burger King or Wendy’s, but if you can’t hold a job for more than a week or two, you might be more tempted to take some of that money that isn’t yours than the person who has regular steady income coming in. And so… So it’s an important part of a will to figure out who it is that’s going to be in charge of things. And then you write down who gets what. If you have four kids and you’re like, I’m just going to split it equally, then it’ll go to the four kids. If you have three kids, you’re going to split it equally, it just goes to the three kids. If you have four kids and you’re like, well, I’m going to give it to three of them, but one of them has told me that they believe that I am Beelzebub himself and they never want to speak to me again, so I don’t think I need to leave them any money, then you can split it up three ways, but you have to write, hey, I’m not going to give it to this person because that’s not a great thing. We just want to make sure that we’re giving things to whom we want and to whom we need to. And so it’s one of those deals that you want to put that in the will. That’s why it’s a foundational document of who gets what. Now, a trust is an alternative to a will, and a trust will distribute your assets when you die as well. Trust only controls assets. assets that are owned by the trust and the trustee is controlled, a trust is controlled by a trustee instead of a personal representative, but they’re still beneficiaries. So they’re alternatives one to another. But if you have a will that distributes things, that’s fine. If you have a trust that’s distributing things, you still want to have a will, usually a pour over will that distributes works in concert with the trust so that whatever’s not in the trust gets dumped in there when you die. That’s the pour over part of it, spelled P-O-U-R, not P-O-O-R. I mean, if you want to be P-O-O-R, you can just give Luke all of your money so that he can be a billionaire, and my example will work. But I don’t think people are going to do that, Luke. I’m sorry.
SPEAKER 02 :
No, they should, though. If you’re a billionaire and you want to give it all away, I’m right here.
SPEAKER 01 :
Yeah. Yeah, I tried. Not very hard, but I tried.
SPEAKER 02 :
That’s okay.
SPEAKER 01 :
But anyhow, so that’s a will. It’s a foundational document. And, you know, there’s other foundational documents. So there’s a financial power of attorney and a medical power of attorney. Now, neither financial power of attorney nor medical power of attorney give away your assets when you die because those documents are designed for while you are still alive. And because it is possible that you can be alive but become mentally incapacitated and unable to make your own decisions. You could be in a car accident and be injured and knocked unconscious. You could be like C.J. Stroud of the Houston Texans on Sunday who got tackled and his head hit the turf and he ended up with a concussion and may very well have lost consciousness for a little bit there. You might end up with Alzheimer’s or dementia like my grandmother did for the last 10 years of her life where she just didn’t even know that she had grandchildren. I remember she would call the house and she would say my dad’s name. And I’d say, hey, Grandma, do you want to talk to Dad? She would repeat my dad’s name, and she didn’t have any clue who I was, and she didn’t, you know, and I wasn’t like I was going to get my feelings hurt. I was just Grandma trying to talk to Dad, and Grandma could talk to Dad, usually about things that happened a long time ago, but still. But during those times, if you’re mentally incapacitated and mentally unable to make your own decisions, it’s a bad idea for you to try to make your own decisions. And there are… So you create powers of attorney. And a financial power of attorney allows someone to make decisions for you if you’re incapacitated. So you can have a financial power of attorney that they can make financial decisions for you. So if you were to become incapacitated, then somebody could pay your rent for you or pay your mortgage for you, or they could talk to and pay the bills for your power company or your water company or things like that. Or, you know, if you needed to, you know, contact the trash company because you’re going to have, so in the city where I live, they have, you can schedule large item pickups. So like if, you know, the normal, you know, trash cans, they come by, they pick them up every week. But let’s say that, and this has happened to me, our children became older and they outgrew the beds that they have. And the beds that they had were not exactly the highest end furniture that you could ever have for a toddler. Because we were normal people and we didn’t have furniture. hundreds of thousands of dollars to spend on a house and furniture and the highest end of everything, because we’re not billionaires like Luke appears to be. And so, you know, because of that, I, we didn’t, you know, when we went to get rid of these beds, or we had a, we had a barbecue grill that died. We had a couch that was 20 years old and was dying and needed to be disposed of. So these are large items. They don’t fit in the trash can. So we would go put them on the go put them out on the street and we would schedule a large item pickup and the large item pickup, we would, it would come and pick up those large items so that those large items could be taken away. And, you know, so there’s, there’s a couple of different, some, it’s always fun when you get the truck that comes for large on a pickup and it’s like a big truck and then it has a claw and the claw will come out and pick things up and throw it in the back of the truck. And I’m like, that’s pretty darn cool. I mean, provided, you know, 30 minutes of entertainment for my, young son the last time we did this he got to wash the claw pick up stuff and throw it away and it was pretty neat and I can see that you know a claw sounds a whole lot cooler than we picked up the trash can and we dumped it in the back of a trash truck well I mean that’s cool too but not quite the same as a claw and so um you know that if uh we were incapacitated and there somebody needed to like clean out our house to because you know it’s going to be long-term incapacity like my grandmother who needed to go into memory care facility um you know there’s gonna be you know my dad and i went and cleaned out the house um in california when i was in eighth grade after my grandpa died and Grandma went to the assisted living facility and then into memory care. But if we needed, and we had a truck that we took a whole bunch of things out to the dump, but if we needed to have a large item pickup, you need to have somebody who can schedule that. So that’s your agent under a financial power of attorney. And an agent under a medical power of attorney is similar, except for they can make decisions for your medical stuff as opposed to your financial stuff. So you are listening to Mobile Estate Planning with Michael Bailey here on 560 KLZ AM, also heard on 100.7 FM or the KLZ 560 radio app. Phone number to talk to me on the air is 303-477-5600. And again, that’s 303-477-5600. And my direct line is 720-394-6887. And once again, 720-394-6887. So with all of that, we look at how are we going to do things and how are we going to figure things out? And, oh, this medical power of attorney thing. Well, that seems kind of important. Who’s going to make medical decisions for you? Now, I mean, most medical decisions, I mean, so my mom had a seizure several years ago and dad’s starting to do memory loss, so I was making her medical decisions. And mostly it consisted of the doctors and the nurses calling me and saying, oh, well, we need to, you know, we want to try to do this test and these are the risks and these are the potential rewards and we just need to make sure that you’re okay with that because they needed informed consent to be able to do things. And I said, yeah, sure, let’s go ahead and do that. I mean, there can be much more difficult medical decisions to be made. Had my mom or my dad needed long-term care and not been able to choose for themselves, then it would fall to me to pick where their long-term care would happen. try to have somebody who lives at home with them? Or would one of us kids want to live at home with them and take care of them? Or do we want to send them off to a long-term care facility? And if so, what type of long-term care facility? Do we need to go to just an enhanced independent living facility? If it’s an enhanced independent living facility, then they’re mostly independent. But if something happens, there’s little pull cords like in the shower or the bathroom, so there’s people who can come and take care of them. Do we need to send them to assisted living? Assisted living is a higher level of care where you have people around and they can help you get up and showered and into and out of your chair and help you eat and stuff like that. And then there’s a skilled nursing facility where you have a skilled nurse, whether it’s an RN or CNAs or whoever it is that’s assigned to do whatever the job is. And they’re the ones that are, it’s just, you know, the people are sicker or older or more frail and feeble and need a higher level of care. Or perhaps they need a memory facility because like my grandmother, they had Alzheimer’s or dementia and Didn’t know that they had a family. Didn’t know that, you know, don’t understand kind of night and day or don’t understand where they are or why they need to be there or what’s going on. There’s, you know, their brain is starting to betray them. And this is the type of facility that my daughter worked in over the summer when she’s a CNA and she would help keep people in line. But they had memory issues and mental capacity issues. So if I am tasked with picking which of these facilities and what type of facility, and some of these facilities are definitely… built for people who are the billionaires like Luke is going to be. And those facilities have a lot higher, there’s gonna be a lot more staff and a lot more people there to take care of the people. So it’s like, is there a one-to-one ratio of a caregiver versus a resident? If you do that, that’s gonna get very expensive very quickly. Well, some of the other facilities that are either run by, you know, some of them are even run by the government as kind of Medicaid facilities. They’re not going to have a one-to-one ratio. It’s just not how they work. There will be less people there. There will be less people who are able to do things. You know, there’s the state has set up minimums of how you can handle things. But, you know, because they, I mean. You’re like, oh, well, let’s just put 100 people in a facility, and we’ll have one person there to keep them okay. Well, that’s not going to work very well. But that’s a much more important medical decision to be making than, oh, hey, we want to run this sort of test. Oh, yeah. But still, you want a financial power of attorney and a medical power of attorney to be in place so that somebody can make decisions for you if you become incapacitated. And then kind of the fourth basic document is what’s called a living will or an advance directive. And a living will or advanced directive really should be called the, do we pull the plug or not document? Because that’s what it’s for. If you’re unconscious, you’re incapacitated, you’re being kept alive by machines and doctors say, Hey, there’s really no hope of recovery here. You could write down and make your own decisions on if you want to be kept alive like that. Um, if you’re, if you don’t have one of those, then you know, it falls to your family. Or doctors and nurses tend to want to try to keep people alive. They’re not in the business of killing people. They’re in the business of keeping people alive and helping them to be healthy. But the decision of do we want to make… So for me, I have my lovely wife. I have three amazing children. But I don’t want them to have to make the decision of should we disconnect life support from… on Michael, even if the doctors say there’s no hope. I have many clients who are like, oh, but there’s always miracles and they could be wrong. And I’m like, yes, that’s true. I’m not going to discount miracles. I’m not going to discount the Almighty and what he can or cannot do. But I also know that if I am on life support and two doctors say that I’m never going to recover, that keeping my body alive is going to be a very expensive proposition. it’s going to cost quite a bit of money to keep the machines pumping my blood or the machines breathing for me. Those are expensive. It’s not cheap. It’s not quite like we’ve got a big organ bellows that we can go back and forth and keep me breathing and some sort of punching bag thing that will punch me in the chest to keep my heart pumping. They’re a little bit more sophisticated than that, or a lot more bit sophisticated, whichever it is, I don’t know. But I don’t want my family to have to pay for that I don’t want my family to have to be in limbo like that. You know, I don’t need my family to be wondering, are they going to come in tomorrow? And, you know, my body has given up no matter what the machines are trying to do. And so I’m gone, you know, or I don’t want to keep them in limbo. You know, let’s say that I lasted like Terry Shivo 10 years on life support. You know, do I need my family to put their entire lives on? almost on hold for 10 years while I’m lying in a hospital bed doing nothing? No, I don’t want that for my family. I want my wife and kids, you know, to understand that I don’t want to be kept alive like that, to let me go, and then they can move on with the rest of their lives. Will they be sad that I’m gone? I hope so. But will it be, you know, that they can’t ever do anything ever again? I hope not. You know, if I were to, you know… beyond life support and end up like that next week, I would hope that they could let me go and then that my lovely wife could find somebody else to be happy with instead of her husband who’s lying in a bed being kept alive by machines. But it’s still an important document to have. We want to have all four. Otherwise, we’re missing something. So thanks you so much for listening to Mobile Estate Planning with Michael Bailey here on 560 KLZ AM. John Rush and Rush Reason are up next, so stay tuned. And if you want to call me, my direct line is 720- Again, that’s 720-394-6887. In the meantime, have a great day and I’ll talk to you next week. Thanks and bye.
