Speaker 1: This is Haystack Help Radio on KLZ 560. Haystack Help Radio is powered by haystackhelp.com. Finding help can be like finding a needle in a haystack, but with haystackhelp.com, finding the needle just got easier. Now, Haystack Help Radio with Scott Whatley on KLZ 560.
Scott Whatley: Welcome to Haystack Help Radio. Thank you so much for joining us. Again, my name is Scott Whatley. We appreciate you being with us. Be sure and check out our website, haystackhelp.com. There you’ll find a lot of great companies to do business with, as well as referrals for seniors.com.
Scott Whatley: And again, these aren’t meant to be directories with multitudes of companies in each category. We just try to search out the right couple of partners and find people that we know you can trust and that we trust and that we’ve checked out and know will do you a great job. Well, we are glad to have in studio today a new partner with us, Blake Harris. Blake is with Mile High Estate Planning. And so, Blake, welcome to the show.
Blake Harris: Scott, thanks for having me on the show. Excited to be here.
Scott Whatley: Always great to talk about topics that no one wants to talk about. People put it off, don’t they?
Blake Harris: People do put it off. I’ll actually tell you a quick story. When I started my practice about seven years ago, I was of course an estate planning attorney. Let me try that again. When I had my children seven years ago, I was an estate planning attorney. And it wasn’t until my kids were about two years old before I did my own estate planning. It’s like the roofer that goes out and fixes everyone else’s roof and you come home and you have a leaky roof yourself. I did take care of it about five years ago. So, I got my part done. But I definitely understand, yes, putting it off is the biggest mistake that people make.
Scott Whatley: Absolutely. So, let’s start at the beginning. Give us a little background on yourself. What got you into doing what you’re doing?
Blake Harris: Sure, sure. So, I’ve been in estate planning, I’ve been an attorney for about 10 years now, and I focus pretty much exclusively on one thing, helping families create estate plans and administer them after a loved one passes away.
Blake Harris: I like to think of back to the story of a family member of mine, my grandma. She never made a great deal of money. She grew up in the great depression, but every penny she have, she saved. And then, as she got older, she was not willing to meet with an estate planning attorney. She didn’t want to take the time to do it or put the investment into making it happen.
Blake Harris: And then, what ended up happening in the final about two years of her life, we saw her entire estate of just a couple of hundred thousand dollars nearly totally wiped out because of longterm care costs, a conservatorship, a guardianship. And money that could’ve gone to pay for my law school ended up being pretty much all wiped out because of the longterm care costs, probate costs. It could have all been avoided has she just taken the time to meet with an estate planning attorney.
Scott Whatley: Sure. Once again, Blake Harris is with us. He’s the owner of Mall High Estate Planning. Check out that website, milehighestateplanning.com. Great website. Tells you everything really you need to know. And somewhere we were talking this last week. You put a lot on education. You do seminars where you just want to help people understand things, because there’s a lot of misunderstandings about what an estate plan is.
Blake Harris: Right. So, we do do monthly estate planning seminars. These are free to the public. And our goal is to help people avoid some of the most common estate planning mistakes. An ounce of prevention is worth a pound of the cure. And that’s certainly true when it comes to estate planning. So, if you’ve been thinking about putting together an estate plan, please go to milehighestateplanning.com, sign up for one of our free seminars and we’d be happy to educate you so you can avoid some of the most costly mistakes that we’re seeing people make.
Scott Whatley: Great. Now, let’s give a course overview real quick and talk about these a little bit. So, when you talk about an estate plan, talk about what all makes that up.
Blake Harris: Okay. So, here’s a question that I get all the time. I get this phone call 10 times a day, “Hey, Blake. I heard you on the radio. How much does a trust cost?” And my answer is, “You don’t want a trust. What you want is an estate plan.” There are several components to what goes into an estate plan. A trust is a component of it, but also you want to have a will as a backup, funding documents which transfer your property from your name into the trust.
Blake Harris: What happens all too often is somebody will, with a different law firm, create an estate plan, create a trust and fail to fund that trust. They’re not paying for the trust and then they end up paying for the probate costs after they pass away. So, include an estate plan, which should be a will, a trust, as well as a complete set of incapacity documents and guidance that goes along with that, the forms of a family guidance letter that we give our clients at Mile High Estate Planning or some other type of guidance to help us out with your state.
Blake Harris: And then also, you want to make sure that whatever state planning attorney you work with, that they will offer ongoing reviews so that as your life situation changes, marriages, births, deaths, you inherit some property, you move to new location, your estate plan stays in line with your goals.
Scott Whatley: Right. Now, a will is basically only a piece paper that helps after you die, right?
Blake Harris: So, a will can do two things. Number one, it can nominate a guardian for minor children. So, if you have children under the age of 18, you can make sure that it’s your mom taking care of your children, not your father-in-law who you may not have the best relationship with. So, part one, is anyone who has minor children ages 18 or under certainly should have a will with a guardian and maybe an emergency guardian as well.
Blake Harris: Also, with a will, you will get to choose who receives your property or choose who doesn’t receive your property. However, a will is a ticket to the probate court. So, if you have a will, you will be sending your estate through probate.
Scott Whatley: We’ve heard this term, incapacity planning. And a lot of times people know that maybe a loved one’s heading down that road, yet they don’t want to talk about it. So then, all of a sudden they wait too long within the first news of getting capacitated. And then, that~ just creates problems. So, what are some of the ways that you have found successful in getting people to maybe talk with loved ones about this?
Blake Harris: Well, just to give a little bit of a context, Colorado, generally our laws in my opinion are very good at helping make life easy on the citizens. Compare this to the state of Texas where the laws are written pretty much just to ensure employment for attorneys. However, in Colorado, we lack a very important law, which is an alternative decision-maker statute.
Blake Harris: What an alternative decision maker statute says, is that in the event of your incapacity, there’s an automatic list of people who can step in and make decisions on your behalf. First would be your spouse, next would be your adult children. We do not have this law in Colorado. So, if you become incapacitated, the only way that a loved one can make a decision on your behalf is go through a court-supervised process.
Blake Harris: This is lifetime probate, and it comes in two forms. Conservatorships and guardianships. Probate after death is something that I would recommend trying to avoid. More importantly, is avoiding probate during your life. Probate after your life is going to cost a couple of thousand dollars. If there’s a dispute, it could cost tens of thousands dollars. Conservatorships and guardianships, these tend to cost about three times as much as death probates. So, you want to make sure that your loved ones have a complete set of incapacity documents.
Blake Harris: The first document that everyone should have is a financial power of attorney. This is for making financial decisions. Next is a medical power of attorney for making medical decisions. Next is a HIPAA release. HIPAA is a federal law which protects the privacy of your healthcare.
Blake Harris: If you become incapacitated, you want your agents to be able to access that protected health care information and share it with the doctors so they can make informed medical decisions. And finally, a living will. A living will says if you’re in a permanent vegetative state, that you do want to have life support removed.
Scott Whatley: Right. Once again, if you’re just joining us, Blake Harris is with us. Blake is with Mile High Estate Planning. Check out their website, milehighestateplanning.com. Go on there right now. Register for one of their free seminars. They do a monthly. Again, absolutely free chance to meet Blake. Ask your questions and make sure that you have the right plan that you need that will help you and your loved ones.
Scott Whatley: Longterm care planning, we usually don’t think about until we are older. And a lot of times that can be a little late in life too. So, enlighten us a little bit on longterm care planning.
Blake Harris: Scott, I’m going to put you on the spot for a quick second.
Scott Whatley: All right.
Blake Harris: You’re smart guy, but what do you think is the average cost for a one-month stay in a nursing home?
Scott Whatley: Most time around 10,000, 11,000.
Blake Harris: Yeah. You’re looking at $5,000, $10,000 or more depending on whether it’s assisted living or memory care. There’s an easy way to avoid this and it’s to set up what I call a Medicaid Protective Trust. You need to do this about five years in advance of moving into the nursing home. And if you do this, you can transfer your assets to a trust. You will still have a lot of control over those assets. So, if you need them for your care, there are ways of pulling those assets back into your estate.
Blake Harris: However, once you pass away… However, this allows you to move into a nursing home, let the government, which you’ve been paying for all the years to just supply this care, pay for that bill. And then when you pass away, your assets will pass to your own children.
Scott Whatley: Right? Because that’s what everybody wants to do, is protect their assets, right?
Blake Harris: Exactly. It’s about protecting your assets. It’s about protecting your family’s assets, but it’s more than that. It’s also about reducing conflict within the family and it’s about privacy. Probate is a court-supervised process. Your estate has to get filed with the county court and potentially anyone could go in there and look up to see what type of the assets you have, what type of the assets your children are inheriting.
Blake Harris: By creating an estate plan, that keeps you out of probate. Not only do you reduce cost, not only do you protect the asset, but you also protect privacy and family harmony. In some cases, the beginning of probate is the end of the relationship between children. So, estate planning, it’s about two things, protection of the assets, but also protection of family harmony.
Scott Whatley: Right. Now, is the best thing to do to get a family together and talk about this? If they’re all local here in Denver to come and sit down with you, where evrybody gets a better understanding of this? Or how does it work?
Blake Harris: So, we are more than happy to meet with other family members, and when other family members would like to be involved, we’re certainly happy to have them. However, we are interested in serving the clients, mom and dad, and sometimes the children may not all be super happy with how the parents are going to distribute the property. I know that there’s going to be a lot of children out there that are not real happy with me and that’s fine. I’m here to serve my clients.
Blake Harris: However, if it is a family that has harmony among it and they all want to be involved, we’re more than happy to have more family members involved, and it actually works better that way so that when the time comes to administer the estate plan, there’s no surprises.
Scott Whatley: Right. All of us are quick, usually, to get a second opinion in the medical world. If some doctor tells we need surgery, we go get a second opinion. It never hurts to get a second opinion. If you think you’ve got a plan, give your office a call at (720) 924-6171. Say, “Hey, I think I got a plan. I would just like for you to review it and see where we’re at.”
Blake Harris: Exactly. If you’ve created a plan and you’re a little bit uncomfortable, you’re not 100% sure that you’ve done the right planning or maybe it’s been a few years or you did your planning out of [state 00:11:05], give my office a call. We’ll always do a free initial consultation. We’ll always sit down with anyone who brings an estate plan that was done by another law firm, look it over and give you our honest opinion on it.
Blake Harris: In some cases, we will tell you, “You’ve got a great plan. You don’t need to do a thing.” In some cases, we’ll say, “You know what? This plan is actually pretty good, but there’s minor things that you could improve upon.” And then, in some cases I’ve even said, “I apologize, but the money you spent was not wisely spent. I really recommend we redo the plan.” I do not oversell my clients. I want to put my clients in a better position than they were when they came in before.
Scott Whatley: Right. Now, when you look at some of the plans that you’ve seen come through your office, what are just other consistent main points that are missing or is everybody different?
Blake Harris: So, I mean there’s different areas where I think we could improve on different plans. The biggest one, the biggest mistake that I see and some of the most respected law firms in town will make this mistake, is giving outright distributions. The word outright is a bad word. There’s another attorney in town who calls it a two four-letter word, outright distributions.
Blake Harris: And generally, most attorneys will do a pretty good job about making sure that minor children, that nobody receives property before they’re 18, or probably best not to even give too much money to an individual before they’re 25 or 30. But then, what I see is the attorney will draft it so that the money is distributed all to the beneficiary the day that they turn 30.
Blake Harris: If you do that, and then the next day your child’s spouse files for divorce, you could see your child lose half of the money that you’ve left for them. So, the biggest mistake that I see in other estate planning document is outright distributions. Instead, what I recommend doing is creating a trust where at a certain age, perhaps age 30, you allow your children to choose who their trustee is. This way they can have liberal access to the money.
Blake Harris: If they want to make a complete distribution or a large distribution from the trust, they can do that. But we never force money into beneficiaries hands, because doing so gives the ability for a divorcing spouse, a creditor or if they are forced into bankruptcy, if they have the business fail or medical illness. They could lose their entire inheritance. So, mistake number one to avoid, outright distributions. The other common mistake that I see often is not funding the trust. You’ve created the trust, but if you don’t fund it, you still end up in the probate court.
Scott Whatley: Right. Well, Blake, this is great information. And we’re looking forward to our shows with you. And I’m just telling you there’s so many people out there that have misunderstandings about this, the myths out there. So, we’re going to try to help you out with Blake and his shows. But I’ll tell you what, go to a free seminar, folks.
Scott Whatley: And you know what? I hate to even call it a seminar, because this is just a chance just to have a conversation with him, to understand some of these things we’re talking about, estate planning, will versus trust, incapacity planning, longterm care planning, asset protection, how to avoid probate. So, those are the main things he covers. All you have to do is go to milehighestateplanning.com and register now for that free class. Their number is (720) 924-6171. So, Blake, thank you very much.
Blake Harris: Thank you, Scott.
Scott Whatley: You’re listening to Haystack Help Radio. We’ve got to take a short break. We’ll be right back.