Tom: Hey, really quick, what is the biggest thing, Blake Harris Mile High Estate Planning, the number one… people in their twenties, should they get a will or wait? I mean honest to God, I bet most people in their twenties don’t have a will, even if they have kids. Would you say that’s correct or I’m crazy?
Blake: Two thirds of people have not done anything to create their estates-
Tom: Two thirds?
Blake: … and that percentage is even higher among younger individuals. The question I get is, “At what point should I create an estate plan? What level of assets?” It’s not necessarily a level of assets, it’s when you have beneficiaries, people who depend on you. So, even a young family, who just had a child, may want to nominate a guardian, so that they can select which family member would step in and raise the child.
Tom: What happens if they don’t have a will, and someone croaks, what happens to the kid? Honestly, does it go to next of kin, if they want it? What happens if there’s multiple next of kin that all want the kid?
Blake: Exactly, these are some of the worst fought court battles over children, when there’s no clear direction of who’s going to step in as the guardian, or who the parents want as the guardian.
Tom: How about if there’s no will? There’s multiple children, and they’re adult children, and both parents pass away, do they simply fight in court over the assets? Or, is it simply because they’re both siblings, they just split it down the middle, generally, in Colorado?
Blake: You are, correct the default and intestacy laws would take over, when there’s no will in place, there’s no trust in place. Then, the default intestacy laws would say that everything goes to the surviving spouse, if there’s no surviving spouse, this is assuming that neither of the spouses have any children outside of the marriage. For non-blended family is, the default intestacy laws do a pretty good job, and then they would divide money equally among the surviving children.
Tom: How about if your will says, “I’m going to leave everything to my spouse,” you end up getting divorced, and you have a new spouse. Can you actually say your spouse, in other words, or do you have to name the spouse?
Blake: So, actually, I think we talked about this a little bit-
Tom: A little bit.
Blake: … yesterday on the show, and what I was referring to yesterday is a spousal access trust. That’s going to get confusing with what you’re talking about, with a will. With a will, if you don’t update it, then the court will, on its own update it, and assumes that if you did not want to still be married to a person, you did not want to still leave them money in your estate. However, I wouldn’t recommend relying on that alone. If you do get a divorce, I do recommend updating your estate plan.
Tom: How much does it cost to update an estate plan? Just generally speaking, people always want to hear numbers.
Blake: Sure, no problem, I’m happy to talk numbers. If you’re looking for a basic will-based estate plan with all the incapacity document, it’s probably going to cost you a couple of hundred dollars.
Tom: That’s it?
Blake: If you’re going to look for more of a trust-based plan, it’s going to cost you a couple thousand.
Tom: Yeah, but, a simple will, for some people in their twenties, that have kids, they’re only looking at a few hundred bucks?
Blake: It’s, maybe 500, a thousand dollars for simple will, for a young family.
Tom: That’s not bad.
Blake: But it can be as low as three-
Tom: Or 400, absolutely. Then he will be the first one to tell you if you don’t even need them. I mean, if all you want is a beneficiary deed, I mean come on.
Blake: Oh, I would say maybe 20% of the people who contact me, more like a third of the people who contact me, I’m not even recommending they do any business with me, I’m sending them to another place or giving them some other recommendation.
Tom: You know, he said two thirds of people do not have any kind of planning.