Tom: Now let’s talk about estate planning in these last few minutes. Now we still have time to get a call in, 303-713-TALK. We talked about the myth about taxing on gifts more than 14,000 okay? We talked about the myth of only the ultra rich needing asset protection. It’s mostly the people who have most to lose. $100,000 in net worth all the way up to a few million. You could have a devastating lawsuit and you’re a target. You’re a prime target. If you sue Bill Gates, he can fight you and he can put you into the ground with fighting and legal teams. So let’s talk about other myths. Anything else come to mind where you always have to explain to people? No, no, no, no, no.
Blake: There’s also the myth that a will will avoid probate. A will will not avoid probate. A will is a ticket to the probate court.
Tom: Now, what do you mean? Do people actually think a will does away with probate?
Blake: Exactly. If people come to me and say, “Oh, I’ve created a will so we don’t have to pay for the probate costs,” and no, you still have to go through probate. I still recommend creating a will even if you have a pretty simple family situation where the default intestacy laws would do the same thing as the will because I’ve had a case where after a parent passed away, there was only one beneficiary. It was her only daughter. The daughter went to probate the estate, tried to get her mom’s home and the court stopped the process because another family member said the daughter was not actually the daughter of her mom, and was not legally adopted, and it caused a big mess. Cost the client tens of thousands of dollars in fees to clean it up at. Had the mom just created a simple will naming her only daughter, it would have avoided the entire court battle she went through.
Tom: So, when it comes to estates and wills, you can’t leave someone a debt, can you? People are always afraid if they’re a personal representative, or they take on the estate, they can be held personally response.
Blake: No. Just stepping in as personal representative, you’re not going to take on much personal liability as long as you properly admin the assets. You don’t have to pay the debt of the estate personally as a personal representative.
Tom: So if there’s not enough money to pay, then what?
Blake: Well, if there’s not enough money, then I’d recommend probably not opening the estate. The exception to that being is if the debts are equal to the amount of assets, but we could negotiate some of the debt based on the fact that we don’t have a lot of assets.
Tom: Have you ever negotiated debts for estates?
Blake: Of course. That’s what-
Tom: So you negotiate them down and then they have enough assets leftover to make it worth it.
Blake: And then they have enough assets to make it.
Tom: Okay. So free free consultations milehighestateplanning.com. Tracy, what is your question dear? Tracy? Hello.
Tracy: Hi. My mom’s about 85.
Tom: Oh. It’s a him. See? That’s sexist of me. I said, “Hey, what’s going on dear? And your name is Tracy and you’re a guy. Go ahead, Tracy.
Tracy: Yeah, my mom’s about 85 and she doesn’t have long term health insurance or anything, and we’re starting to worry a little bit about her health, that she could end up in a nursing home in the future, and we worry about her home. But the medic … if we would have to go to Medicaid or anything-
Tom: Does she have a lot of equity?
Tracy: She has about a two hundred fifty thousand dollars condo.
Tom: Well, listen, you would have to surrender every bit of equity if you went to Medicare or to social services.