Estate Planning Chat with Attorney Kevin Baird

Estate Planning Chat with Attorney Kevin Baird - 1:9:24, 2.50 PM

Ralph: [00:00:00] We've got a great show for you today, folks. Today, I'm happy to be interviewing attorney Kevin Baird from Baird, Mandalas, Brockstead, and Frederico. And now. Kevin and I had a great discussion about estate planning, and if you've not done this is something you really need to do. This is a follow up to the podcast I did about a week ago on the common estate planning mistakes, and Kevin and I just go through and talk about what documents you should have how you go about doing it, and he dispels a lot of rumors.

And things that just aren't true. So I encourage you to enjoy this podcast as we discuss estate planning with Kevin Baird.

Kevin: Welcome to the ask Ralph podcast. We're listening to an experienced financial professional can help you make sense of confusing questions current headlines and industry trends about taxes Small business, financial decision making, investment strategies, and even the art of proper budgeting.

As Ralph makes the complex simple by [00:01:00] sharing his real world knowledge with all things financial. Now here's your host, Ralph Estep, Jr. All right, welcome back to

Ralph: the show. Today we've got Kevin Baird. He's an attorney with Baird, Mandalas, Brockstead, and Federico. Kevin, thank you for joining us

Kevin: today. Thanks, Ralph.

Appreciate you having me.

Ralph: Yeah. We did a show about a week or so ago on the common estate planning mistakes. And when I was doing the show, I thought my good friend, Kevin, be a great person to bring on the show to talk about that. So Kevin, thanks for taking the time today and let's jump right into this.

 One of the things I mentioned in the last program is that I think it was two thirds of the average American person doesn't have an estate plan. So I wanted to ask you what do you think are the obstacles? That are deterring people from doing what they really should do and develop an estate plan.

Kevin: Yeah, that's a great question, Ralph. And it's always surprising to me when I hear those statistics. Because this is what I do day in and day out. And for someone to not have an estate plan always causes me to scratch my head. But then when I put myself in our client's [00:02:00] shoes, I can understand that.

I think. There's several factors that prohibit people from making the first call. The first is just not knowing where to start. Not everybody has an advisor like you, an accounting firm like you helping them out, putting them in the right path mentioning estate planning to them and then giving them a place to start.

So a lot of people don't know where to start. They don't know any lawyers. They don't know any estate planning lawyers. They're very hesitant to just go on the internet and do a search or. Look for something. So unless someone's really pushing them and says, Hey, I've got a referral for you.

I've got a recommendation for you. A lot of times there's just that inertia of not knowing where to begin that holds people up. And then just like you had mentioned, there's always the fear of going to see a lawyer. A lot of times people, when they think of lawyers, that's not their first their first check off on the list.

They're right up there with going to the dentist, maybe of something that you really don't want to do it. You probably should, and you have to, but. There's just that hesitation there and then obviously there's always the cost I'm sure [00:03:00] everybody who's not a lawyer has heard stories about the fees lawyers charge and they're worried about scheduling an appointment What's the appointment gonna cost?

How much is it gonna be even just to talk to one of these lawyers if I find one? How do I know I'm picking a good lawyer? So I think that there's several factors that a potential client really needs to get over the hurdle of to be comfortable making that

Ralph: appointment. Oh, and I absolutely agree with him.

We're going to talk about costs and all that towards the end of the show, but I think you're absolutely right. And I always tell everybody that's in professional business that it's all about the relationship and. What you're saying is that they don't have that relationship with an attorney.

And I know in my own life when my mother passed away in this past March fortunately she had taken the time to go and get all those documents in order. So I, you know what I hear clients say all the time, Kevin is just I'm scared to do it. I'm I don't want to admit my own mortality.

And I'm guessing you're, you hear that

Kevin: sometimes as well. I hear that a lot. That's another good point is that it [00:04:00] really becomes real when you have to face your own mortality and you're making this appointment. You've got to think about these things and you've got to think about things that are potentially unpleasant.

 What happens if I'm gone? What happens if I become incapacitated? Who's going to be handling my affairs? And so you'll see a couple of different categories of people that do make the jump and make the appointment. A lot of times it's people after they're diagnosed with a potentially serious illness, or if they've got an upcoming surgery or something that's.

that's forced them to confront their own mortality. They say I've got to deal with this now, so I need to get a lawyer. Those are always tricky because it's usually the week before they have surgery, they call me up and say, Hey, I'm having open heart surgery next week. Can I come in and get

Ralph: a will done?

That's what I was going to say. That kind of puts you on the spot because to do a professional job, it's not something you want to throw together to last minute. No,

Kevin: no. And it's something too, Ralph. That's a good point. It's something too that you don't want these clients potentially making these very important decisions under time pressure or health pressure or other stresses.

You want to be doing this when [00:05:00] everything is going fine and everything's going well and you can look at this objectively with a clear head. And not worry about, well, gosh, I'm going to be under the under anesthesia next week. If something goes wrong, what do I do? They've got plenty of other stresses in their life.

So being able to do this in a calm, cool, collected manner with some thought and some time is always the best option.

Ralph: And I agree with that a hundred percent. Like I mentioned in the last podcast you can't ultimately control things happening in your life. There's some control you have over that.

Ultimately, by putting in a state plan in place, it really gives you a lot of control, doesn't it, Kevin?

Kevin: It sure does. That's the most important thing, and not only does it give you control, but it helps out those around you. When you're doing estate planning, Ralph, and you and I have talked about this.

 Offline and in our practice together. You're doing this for your loved ones. If you're either gone or you're incapacitated, then really you're not going to be the one dealing with either a well put together estate plan or no estate plan. It's those that come after you. So when you're doing this [00:06:00]planning, you're doing this planning to Not only control who's going to be taking care of your affairs for you, but making sure that those loved ones who are going to be taking care of those affairs for you have a plan in place.

It's not something that's all of a sudden an emergency and either someone becomes incapacitated or someone dies and there's no planning in place, or they don't know if planning was done. All you're doing at that point is leaving a mess to the people that are going to come after you, to the people.

That are your loved ones and so rather than do that and a lot of times I can get clients over the hump Ralph by telling them look you're not doing this for yourself. You're doing this for your wife. You're doing this for your kids You're doing this for your husband. You're doing this to make sure that you're taking an additional stress off of them They're already gonna have the stress of losing a loved one or the incapacity of a loved one But then to say now I don't know what the heck's gonna happen with their estate Or we don't have any documents that are going to allow us to take care of them It just adds a whole nother level of uncertainty.

So control is a big issue and focusing [00:07:00] on the fact that you're doing this planning for your loved ones, not necessarily for you.

Ralph: And that's absolutely true. And I'll tell a little bit of a personal story, and I'm sure Kevin won't mind me saying I'm a customer of Kevin's as well. And my wife and I and my oldest son planned a trip to Germany.

We just went this past October. And I knew that the three of us would be on the trip, but I have a younger son, and I left my younger son sort of an envelope with all of our state documents in it, and I put a letter at the front and said if you're reading this things are not good and you've got a lot on your plate now, but the other, the best part of that was I'd be able to say to him, listen, here's the person to call here, all the documents that you need.

So even though you're in a tough situation, I've made it easier for you by putting this plan in place. So I guess that's one of the things that you would sell your customers on as well.

Kevin: Absolutely, Ralph. And you in the position that you're in and understanding the importance of it.

Yeah. You've done great planning for your family. You understand the importance of it. And that's exactly right. When you're talking about planning or you're talking about your [00:08:00] family with planning, you don't need to get into the gory details. You don't need to tell the kids who's getting what or where assets are going, but you need to reassure them that if something happens to me, it's going to be okay.

There's been some thoughtful planning that's been put in place. The documents are there that are going to be needed. The people in place that are going to need to take care of things have been put in place and have been notified. And that just takes a tremendous amount of stress or anxiety off of those that would be ultimately responsible for your care if you're gone or if you're incapacitated.

So

Ralph: Let's address something you just said, because one of the things that was recommended in the other podcast I did was it said to share this information with your loved ones, and I felt like there's sort of a there's a back and forth that can be given on that in our particular circumstance we decided to share our documents with our oldest son there's a, there's always a discussion about if I tell them what's going on, are they going to have an issue with me?

 What have you found in your practice? What is your advice

Kevin: to customers generally? Yeah. I think that's a great point, Ralph. And [00:09:00] what I enjoy about my job and I know you do as well with your clients is every family is different. And sharing in one family means something very different to others.

Now, in your circumstance, you've got young adult children, but they're adults. And if you're dealing with a situation like my family, I've got three sons. I've got a 19 year old, a 17 year old, and a 14 year old. And what we share with them is a very, very high level.

 They understand that there's been a state planning done. They understand that there's documents in place and that if something happens to your mother or me, everything will be taken care of. They don't need to know the details about who the agents are, where the assets are. Now, it's very different than if you're working with adult children.

If you've got children and they're in their forties or they're in their fifties and they're responsible and they're ultimately going to be the ones that are acting as your executor. or acting as your agent for health care or for power of attorney, then the level of sharing with them is much more detailed.

Not only are they knowing that there's been planning in place, but a lot of times they're being given copies of [00:10:00] the documents because they may need those documents if something were to happen to you. They're being told what the assets are, where they are. They don't necessarily need to know how much knowing where your bank accounts are, knowing where your financial assets are.

Things along those lines is very, very important. And so, each family and each parent, just like you and your wife have done, have decided what the appropriate level of sharing is for your family and your children. And that changes over time. Obviously, as your children get older, or my children get older, the level of detail that they can responsibly handle becomes more.

That's certainly the hope. And so The client is ultimately in control of the information, who they give it to, and in how much depth they go to. And that also gives them some comfort as well.

Ralph: Yeah. And you actually segued perfectly into the next question I was going to ask you. And we talk in general about an estate plan, but let's get specific, Kevin.

Let's talk about what the essential components are and what those look like for the

Kevin: individual. Yeah, that's great. So when we're [00:11:00] talking about estate planning, Ralph, a lot of people jump right to the will and they say, I need a will. And that's certainly a component of the estate planning.

But when you're looking at a well rounded estate plan, you're planning for two distinct things. One is obviously planning for what happens to your assets upon your death and that's a will or that's a trust. And we can talk about those in a little more detail. But the second component that sometimes gets overlooked is we're also planning for the potential that you become incapacitated.

So you're not dead, but you're in either a mental state or a physical state where you can't make your own medical decisions or you can't handle your own financial affairs. And so starting with kind of the planning for incapacity, those are two very simple, relatively inexpensive documents. The first is called a healthcare direct.

The healthcare directive is the document that allows you to appoint the people you trust. to make medical decisions on your behalf in the event you become incapacitated. And then the companion document to that Ralph is the durable power of attorney. A power of attorney is [00:12:00] also a document we use to plan for incapacity, but this enables you to appoint people you trust to handle your financial affairs.

Make sure your bills get paid, make sure your tax returns get filed. And handle those types of things. And let

Ralph: me ask, let me interject a question right there. Because and I totally agree with you that there's there's really two things you're planning for. And I think you nailed it. It's the death and it's the incapacitation.

So let's define what incapacitation looks like. Because I know when you and I sat down with my wife, I was like. Okay, define what that looks like for me, Kevin. This advanced, I think you call it advanced medical directive. I don't want to put words in your mouth, but I think it's the word you used.

 What does that really mean? What does that look like for the average person is I don't understand what this means. Does that mean that that my kids can pull the plug on me? What does that look

Kevin: Yeah, that's a great question. And it's one I get a lot. What is incapacity truly mean, Kevin?

Because if you ask my wife, then I'm probably incapacitated most days of the week. So you'll

Ralph: be both my friend.

Kevin: There's some protections for guys like us, Ralph. So [00:13:00] in the medical sense, an incapacity is typically one of two things. One is you're unconscious. God forbid you're in a car accident and you're unconscious, you're in the emergency department of a hospital or you're having surgery and you're under anesthesia and you're unconscious.

If you're unconscious, you're incapacitated, right? There's, you're not in a position to make medical decisions on your own behalf. Someone's going to need to make those decisions for you. The second scenario, which is also a potential incapacity is that you're suffering from some type of condition.

that has caused you to lose capacity to make decisions. And so the typical example of this would be some type of form of Alzheimer's or dementia where You may be awake, you may be alert, you may even be able to talk and interact, but you're suffering from some type of medical disability that doesn't allow you to make medical decisions on your behalf.

So if you've got clients that have [00:14:00] severe Alzheimer's or some type of condition that's causing severe dementia they're not in a position to logically reasonably talk to a doctor, discuss their course of care and make decisions on their own behalf. So in both circumstances, incapacity is determined by a doctor.

It's not determined by your husband or your wife or your friends or your kids. So in order to be considered legally incapacitated, typically what we would do is we would get a letter. from an individual's treating physician that says, I've examined Kevin Baird and it's my medical opinion that he does or does not have the mental capacity to make his own medical decisions or financial decisions.

And so typically incapacity Ralph is when a doctor has determined that you lack the capacity to handle your own medical care or financial

affairs.

Ralph: So truth be told, then the doctor is going to make a statement at some point to the family members. And say, listen, like the example you use, Kevin is unable to make this decision.

So [00:15:00] therefore you, and I went through this with my own mother she had gone undergone surgery for a brain tumor. And the doctor came to us and said, listen, the surgery didn't go well. And your mom is not in a position where she can make a determination about what she needs to do. And at that point, the medical directive really spoke to.

exactly what she wanted. So let's dive into a little bit detail on that. Kevin, what typically goes into a medical

Kevin: directive? Yeah, great question. So there's two primary components for a medical directive in Delaware, Ralph. The first component is you appointing the people you want to make medical decisions for you.

If you cannot, this is called appointing your agents. So this is for example, if Kevin gets in a car accident and is unconscious and goes to the hospital, who are my treating doctors or who are my care providers authorized to talk to and take direction from. So for my example, it says if Kevin is incapacitated, his wife Karen is his primary agent.

And then maybe if Karen is in the car accident with me and we're both incapacitated, my backup would be my oldest son or my brother or whomever. So the first part is [00:16:00] you just appointing people to make non life ending medical decisions for you. If I'm getting shoulder surgery and I'm under anesthesia and they get in there and they see that the the damage is more extensive than they thought, they need to put in three screws instead of two screws.

They would go to my agent and say, Hey, Kevin's under anesthesia. We need to do three screws instead of two screws. Are we authorized to do that? And those are the types of decisions that my agent is making for me. So number one is appointing the

Ralph: agents. So let me ask a question while you're there. Cause you brought up about the two screw versus three screw thing.

And it might sound like a silly question, but. Typically, a doctor is going to make that determination and something like that. So generally, these are more immediate and bigger questions, Kevin? Generally, correct.

Kevin: Yes. Yeah. If it's within the scope of the doctor's regular authority, it's one thing, but if it's a big deal or if it's something that's a big issue they're going to look to the agent to make those kinds of decisions.

If it's something that's potentially caused liability to that doctor the doctors don't ultimately [00:17:00]want to be the ones making decisions for someone's care they want. Either the individual themselves or their medical agent to make those decisions for them.

Ralph: Gotcha. So question one is tag, you're it.

Tag,

Kevin: you're it. Gotcha. Yep. That's right. And then the second one is one that's often misunderstood, Ralph. These are your end of life decisions. And so a lot of people sometimes think of this as a living will or they call it a DNR mistakenly. They don't really understand exactly what the end of life decisions in your medical directive are.

And so in Delaware, there are two end of life conditions in which you get to make some decisions. The first condition is you have a terminal condition. So a terminal condition is something that's diagnosed by two doctors now, not a single doctor. Okay. Two doctors have to determine that you have a terminal condition, which means that despite the application of life.

Prolonging measures. There can be no recovery. Okay. So we've already checked a couple of boxes here in order for your health care directive to become relevant. First, it [00:18:00] means you're incapacitated. And second, in order for this provision of your health care directive to be applicable, you have to have been diagnosed by two doctors as terminal and there can be no recovery.

This is not a DNR. This is not a DNR. a a situation where if you have a heart attack or a stroke or if you get sick that they're not going to perform these measures on you. If you're at home or God forbid, you're in an accident and the doctor in the EMS providers come and find you unresponsive, they're going to do everything they can to keep you alive.

This is only after a process and two doctors. Having determined your terminal that these decisions would come into effect. So that's one the terminal condition The second is you're in an irreversible coma or permanently unconscious And again, this is something that's going to be determined by two doctors if you're in a coma But the doctors think that there's a chance of you recovering or regaining consciousness They're gonna do everything they can to keep you alive.

They're gonna give you feeding tubes hydration [00:19:00] They're gonna put a ventilator on you, they're going to do everything they can. But if two doctors have stated that this is an irreversible loss of consciousness, or this is a permanent vegetative state, and there can be no recovery at that point, you get to decide in your document, whether you do or do not want those life prolonging measures.

Excellent. Delaware there's four measures that you get to choose whether to use or not use. That's artificial nutrition. which is a feeding tube. Hydration through a conduit, which is IV fluids to keep you hydrated. CPR, which is cardiopulmonary resuscitation. If your heart stops, they'll try to resuscitate you.

And then the fourth one is mechanical respiration, which is a ventilator. And so if you're in either a terminal condition state or an irreversible coma or permanent vegetative state, you can decide whether you do or do not want these measures used. And you can pick and choose amongst them whether you want them or don't want them.

Or, another option that you can [00:20:00] choose is to allow your agent to make those decisions for you. A little bit of a sidebar, and I know you're familiar with this as well, Ralph, is that what always surprises my clients is when I ask them do you have kids? And they say, yes. And I say, how old are your kids?

And they say, oh, my son's 18 and my daughter's 20. I asked them if they have a healthcare directive and power of attorney for their kids. And they say, no, I'm their parent, their mother their father. It comes as a surprise to them when I tell them once they turn 18 and they're adults.

Your parental ability to take care of them ceases. And so anybody over the age of 18 should have a health care directive and a power of attorney in place, because if my 19 year old son is in a car accident and taken to the hospital absent a health care directive I'm going to have a hard time getting information from those

Ralph: doctors.

Wow. That's something I didn't know, Kevin. You just taught me something I wasn't

Kevin: aware of today. So that's important. Once these children of ours are adults in the eyes of the law, we need to make sure that they're making those decisions as well.

Ralph: No, that's a very [00:21:00] good point. Now we also mentioned the power of attorney.

So let's talk a little bit about what that looks like,

Kevin: Kevin. Yeah, power of attorney. Again, the power of attorney is a little different. So the power of attorney is solely for finances. It does not enable anybody to make medical decisions on your behalf nor does the healthcare directive allow you to handle people's finances.

So the power of attorney says that if for whatever reason I become incapacitated, or if I choose to make this power of attorney effective now, I'm giving an individual or individuals the legal authority to handle my finances. That's what's called a springer,

Ralph: correct? Versus a non

Kevin: springer? Yeah, springing power of attorney says that this power of attorney springs into life upon my incapacity versus a power of attorney that I may execute out of convenience and say, I'm going to be out of the country for six months.

I'm going to give Ralph the ability to pay my bills and handle my finances. Or maybe I'm 80 years old and my daughter helps me with my bills anyway, so I'm comfortable with her having a power of attorney to be able to handle affairs for me because every time she gets social security on the phone, they need [00:22:00] me on the phone to authorize them to talk to her.

Sure.

Ralph: Then how are we addresses the. The the topics that are incapacitation, those two documents. Correct,

Kevin: correct. Those are both documents that everyone over 18 should have to plan for a potential incapacity. They're the documents, Ralph, we hope we never need. But if we have them in place, it makes life a lot easier.

Ralph: And then the counterpoint to that is once I'm gone, that's really just the will at that point. That's

Kevin: correct. Yep. That's a, that's also a common misconception, Ralph, is that after you're gone, your power of attorney and your healthcare directive ceased to be in effect. And that's when the will takes over and that's when we kind of change from that planning for incapacity to planning for our ultimate demise.

And that's

Ralph: interesting, Kevin, because it always surprises my clients to some, let's say one of their parents passes away, they'll come in and say, Oh, Ralph, I need to get my mother's tax return done. I'm like, okay, that sounds good. And they said I've got this power of attorney. I'm like if your mother's passed away, that's of no value at this point.

That's

Kevin: exactly right. [00:23:00] And I get that all the time too. You get clients that come in and say I was my mother's power of attorney I need to handle this. And I said unfortunately upon the death of a principal, the power of attorney and the healthcare directive. Cease to be enforceable.

 They're invalid. So let's

Ralph: go on to the next thing that I think probably three out of four clients Come in and ask me about is this must be the new fad thing is a trust, right? So and I know I don't want I don't want to spend an hour talking about trust there are some things that you can do In this, at this point of the game where it's a, after you die situation, can you talk a little bit about like high level

talk

Kevin: about trusts?

 Sure. I get that question all the time, Ralph. The clients will ask me, what's the difference between a will and a trust? And I hear about these trusts. And when we're talking about trust, we're talking about something that's either called a revocable trust, or sometimes it's called a living trust.

These documents, a revocable trust or a living trust are essentially a will substitute. And in order to understand the benefit of a trust, you've got to understand [00:24:00] if I die, what does my will actually do? A will allows an individual to transfer assets after they're gone but this is only for assets that are part of my estate.

 For example, Ralph, If I've got a house and a bank account and a car in my name, and when I die, I want it to go to Ralph E. Stepp. And my will says, if I'm gone, everything goes to Ralph, and Ralph's the executor of my will. Then in order for you, after I'm gone, to get my house transferred to your name, my bank account, and my car transferred to your name, you need to go through something called the probate process.

Probate in Delaware is administered by the county that you live in when you die. And so I live in New Castle County. Not too far from you. So if I'm gone, you would file my will and my death certificate with the New Castle County Register of Wills. You would open my estate, and then you would go through the probate process.

Probate in Delaware takes anywhere from about nine months to a year. It can be Wow, that's a process. It's a process. And it's an administrative process where [00:25:00] you're filing paperwork and handling administrative tasks as my executor. But at the end of that process, ultimately the house and the car and the bank account get to you.

 If I wanted to short circuit that probate process, if I wanted to get these assets to you more quickly or I wanted to do it in a private manner rather than having everything done through the county, I can set up a revocable trust. My trust looks like a will, acts like a will, I can change it or amend it while I'm alive, and when I'm gone it says everything goes to Ralph.

The difference is that the trust allows me to transfer my house and my bank account and my car to you after I'm gone. without using the probate process without going through the county. Excellent. And that's the big difference. And how it does that is, is that while I'm alive, I would transfer any assets out of my name that were subject to probate and put them in my trust.

So I'd prepare a new deed for my house, put it in my trust. I would put my bank account in the [00:26:00] name of the trust and I would transfer my tangible property and things like that into my trust. So when Kevin is gone. Ralph no longer needs the probate process to take dead Kevin's name off of everything sure and took everything off of it while he was Alive, so a trust is kind of like an individual Ralph choosing to pre probate their own estate So that the people that come after them do not have to do so excellent

Ralph: now You mentioned the word revocable versus irrevocable.

Do you want to talk about that for a minute? Sure.

Kevin: I certainly can So like I said, I wanted to be clear that you know if you're looking to replace your will with something that works oftentimes it's a revocable trust, which is something that you can amend and change and update as often as you like, just like a will.

An irrevocable trust is a completely different animal. That's a very specialized document that we use for tax purposes or we use it to plan for Medicaid or we use it to qualify an individual for other things because once you set up an irrevocable trust. And [00:27:00] transfer assets to that trust.

It's as if you gave those assets away, irrevocable trust or trust that you can't change after you set them up. Their trust that you typically can't control while you're alive. And like I said, they're primarily used either for tax purposes to get a large estate under the applicable estate tax thresholds or using them to qualify for some type of government

Ralph: benefits.

Excellent. That sounds like a topic for another day. Absolutely. So let's talk let's cut to the chase and let's, let me ask you this question, Kevin. So what are the implications of not having these documents in place? Yeah. What are some horror stories that if you could share I know I don't want you to disclose anybody's personal information, but.

If we're trying to get people one of the things I think the focus of today's show is to get people to take the step and do these state documents. What happens if they don't have them? What do those

Kevin: horror stories look like? Yeah, you certainly hear a lot of them, my friend. And unfortunately as the statistics you cited early on in the show, Ralph, were many, many people [00:28:00] die without wills.

And the downside is that And it goes back to the point you made earlier, control. If you don't have a will, you no longer control who gets your assets upon your death. You've given up that ability to decide where your assets go. And when you die without a will, it's called intestate succession.

 You die without a will, you die intestate, which essentially means you died without a will. And at that point, the intestate succession rules determine where your assets go. So essentially the state decides who your heirs are, and they may not always be who you think. And so some of the horror stories or stories that I've had recently, and this is unfortunately with several clients, is that if you've got a husband and a wife, They've been married for 20 years, but maybe it's a second marriage.

 The husband has two kids, the wife has two kids, and the house is in the wife's name only. [00:29:00]The wife brought the house to the marriage, the husband didn't, moved into the wife's house, they live together they never have a will, and the wife dies. The husband assumes that we've been married for 20 years, of course I get the house.

Sure. That's not the case. The house will not go to the husband. The husband would only get a life estate in the property, but the house will pass solely to the wife's children. Wow. So that's a result, unfortunately, that I've had on several occasions and it's a shock to the spouse to say wait a minute here, what do you mean I didn't inherit the property?

I've been married to you. to her for 20 years. Well, she didn't do a will. If she had done a will and says, I leave the house to my husband, there'd be no problem at

Ralph: all. Yeah. And in that circumstance, the husband may very well been paying for improvements to the home may have been making modifications to the home.

Who knows, right?

Kevin: Yeah. That's absolutely right. Not only that, there may be a mortgage on the house. He says, wait a minute here. If I want to stay at the house, I got to continue to pay the mortgage. I [00:30:00] don't even own the house. Why would I do that? Why would I continue to pay the utilities or make improvements or maintain this property or mow the grass on a property that I'm never gonna get?

And it's never gonna go to my kids. I'm just improving this for her kids. And that's something that is a real bad result. The second thing is that again, if that husband and wife are married and there's kids from previous marriages, the husband doesn't receive all of the assets.

 Wait a minute. Now I didn't get the house. You're telling me I don't get all the other assets as well. Under the intestate statute of Delaware, the husband would get 50 percent of the wife's estate and the other 50 percent would go directly to her two children. If she's got two children or three children or however many children she has.

So not only does the husband not get. The house, just a life estate, the husband is only getting 50% of the remainder of the estate. And so again oftentimes if you die without a will, things don't work the way you think they might. And

Ralph: a life estate is basically, if I remember it from my, this is going back to my University of Delaware.

 Undergraduate degree or [00:31:00] undergraduate days, I love to say to me basically means you can live there till you pass away.

Kevin: Correct? Correct. That's correct. Yep. You have the ability to live in the house for your lifetime, but then upon your death or if you choose to leave the house it goes elsewhere.

Ralph: So you nailed it. When we use the word control, that's really what it comes down to, isn't it, Kevin? Absolutely. It'll be control your

Kevin: own destiny. A hundred percent. And not only do you get to control what happens I've got clients that are married and maybe have three kids and they haven't treated all their kids the same during their lifetime.

Maybe some got more than others. And so they don't want everything going equally to the three kids I've had clients. And unfortunately in many occasions they, they take kids out of their will. A will or a trust or just doing proper estate planning allows you to have control over who gets your assets after you're gone.

If you choose not to do that, then you're putting your hands and your, the future of your family into the to the state.

Ralph: All right. We're going to jump to the question of how do you go about getting [00:32:00] this, but the first thing I wanted to ask you. In the the common the things I talked about that people make a mistake on.

So what prevents somebody from going online and saying, you know what, I'm gonna be the online Google attorney. Yep. Why don't I just do that, Kevin tell me, tell our listeners why you think that's a bad plan. Yeah.

Kevin: I we've had horror stories with that as well. There's a lot of online.

 Services out there, a lot of online resources where I can go online and make my will online and print it out and have everything taken care of and

Ralph: for 49, 49 and you will have everything

Kevin: you need. That's exactly right. And it's kind of like buyer beware. That would be like someone saying you can you can do your own appendix surgery too if something goes wrong, don't come back to us.

And for me, it's if you're looking. for peace of mind and you're trying to get your planning done to make sure everything's going to work right. Why would you put it into the hands of some online software that doesn't know you? You can't ask an [00:33:00] online service questions.

You can't customize the, this to you. You're essentially filling out a list of questions in some online form. It spits out a document and then you hope it works. And so I have lots of clients that come to me and say Hey Kevin. Why can't I just go online and have some online service prepare my will for me?

And I say you certainly could what happens if there's an issue? What happens if you've got a question? What happens if something in that form isn't exactly the way you want it to be? Who are you going to go to? How are you going to make sure that works? All estate plans are great until you actually have to use them.

And having done this for over 20 years now and having done probably thousands of estate plans and seeing them come and go and having clients go I know what I do works and you've got someone that's going to stand behind there. Someone that's going to be able to guide your beneficiaries through the process where as if you just get a document, you print it off the internet, maybe it'll work and maybe you'll never have a problem.

[00:34:00] And you saved a few hundred bucks by doing that. Is it really worth it?

Ralph: And I tell people all the time, it comes down to this. You get what you pay for, number one, and number two, it's never an issue until it's an issue. Yes. So Kevin, let's talk about the process. Like how you would work that process and let's talk about the costs.

Let's be blunt.

Kevin: Yeah. That's a great question, Ralph. As you know, you and I've been working together for many, many years. I try to lower the hurdles as much as possible for clients to to explore their estate planning by doing things like this, by doing podcasts with you and partnering with you on many clients that we work with together.

Sure. The second way that I try to reduce that barrier is that. All of my initial consultations are completely free of charge.

Ralph: All right. Let me rephrase it. You, so you may make sure I heard what you said because everyone says attorney's charged for every second they talk to you. Yeah. Look, you just said that the first consultation is absolutely free, correct?

Kevin: That is 100 percent correct, my friend. And a lot of attorneys don't do that. They may say. Yep. If you want to come see me, then you got to pay a [00:35:00] 300 consultation fee or this or that. And whether you like me or don't like me you're paying. And I want to avoid that. I want clients to know that they can come and sit down and meet me and shake my hand and decide if I'm the right lawyer for them.

completely risk free, completely free of charge. Even if after they leave, they decide not to hire me or not to use me to do their estate planning. Hopefully they left a little more informed. They understand what type of documents are in place for them. And then typically Ralph, when I meet with clients and we talk about their situation, I get to learn what their situation is.

Do they have children? Do they have young children? Do they have adult children? Do they have no children? Are they leaving their assets to family, to charities, to friends, whomever it is. And then I can. Give them a quote for the cost of their planning upfront so they'll know when they leave, two things, they'll have had a chance to meet with me and see how I work and how I operate and they'll know exactly what their estate planning is going to cost.

So there's

Ralph: not going to be any big, Oh, Kevin just finished up my documents and he's charging me 10 times what I was

Kevin: expecting. Exactly. [00:36:00] There's none of that. We don't want any surprises. I've got clients that, you know like things and don't like things. No one likes surprises when it comes to a bill from your lawyer because rarely are those surprises.

Wow. That's a lot less than I thought it

Ralph: would be. So I don't want to put you on the spot, but what are you talking about? Real dollars, Kevin, for a basic and I probably shouldn't say this, but let's just say a basic estate plan. What does that look like?

Kevin: Yeah, that's a great question, Ralph. So if you're talking about.

 Just a simple estate plan where we're talking about a will, a health care directive and a power of attorney. Just a couple, maybe they have kids, maybe they don't, you're talking anywhere in the range, Ralph, of probably around 1, 500 and that's covering both their wills, both their health care directives, both their powers of attorney it can be more, it can be less but I would say anywhere between one and 2, 000 would be the cost of that.

And that includes the initial meeting. That includes drafting the documents, [00:37:00] sitting down, having a follow up meeting, reviewing everything together ultimately signing everything and putting that plan in place. And what's the

Ralph: timeframe on something like that, Kevin from a realistic

Kevin: perspective?

Yeah. The timeframe is if it's just in the normal course, usually within a 30 30 day period from the time that you meet, it's going to depend to the time that the client ultimately makes a decision. If it takes the client 10. 10 days to decide whether they want to move forward or not.

Yeah, obviously it's a little longer, but from the time that we get an engagement letter back from a client, generally within 30 days, we've got them back in there and they're signing their. Excellent.

Ralph: So before we get to how do they contact you? Let's talk about some technology things, which I had a client in a couple of weeks ago and he's big into this crypto.

And I did a little research after he left and that's a whole new estate planning issue. That and these legacy accounts for social media. Do you have something you could talk

Kevin: about there a little bit? Yeah, absolutely. Yeah. That's certainly changed the dynamic of a lot of things. Clients that have cryptocurrency and they've got they keep this cryptocurrency on on [00:38:00]these drives, digital wallets, right?

They've got digital wallets, they've got a tracer, they've got some type of means by which they digitally store this stuff. And absent that the person who holds this device, which is kind of like a little USB device. Owns the asset. And yeah, I've worked with several clients that have cryptocurrency assets in what they call cold storage, which is kind of offline on this device.

And we need to make sure that we're planning for that. We need to make sure that the individual that they want this asset to go to is able to access that device and ultimately get those get those assets off of that device. Because just holding the device without the means to, to access it is is useless.

And there've been horror stories out there in the crypto world about people that lose their password to their own device. Yeah. Millions of dollars of cryptocurrency and they can't access it. And it's essentially gone. Absolutely. Yeah. And that extra careful when we're

Ralph: And [00:39:00] as a eugenician, I guess you've had to add that to your checklist of things to talk

Kevin: about.

Oh yeah. Yep. Yep. Oftentimes when you talk about the nuts and bolts of estate planning, which we've got into Ralph is that the first step after the meeting is we give you a data sheet and that data sheet asks us to list your assets. And it says, do you have, do you own any cryptocurrency or any other type of bearer assets?

Do you have artwork, do you have things that. Are going to be part of your estate that are not kept in a bank or show up on a statement somewhere or on a deed. And a lot of times clients have very valuable. Tangible property. They've got very valuable coin collections or art collections or model dream collections or car collections or things along those lines.

And we need to make sure that we're accounting for those as well.

Ralph: Now, how about this whole social media thing? I know my wife and I had this discussion, I want to say it was a month or two ago because Facebook came out with this thing called a legacy contact. Yeah, because it's a tragedy.

Sometimes I have clients that pass away and I'll still get things on Facebook like such and such liked your post. I'm like, they've been [00:40:00] dead for three years. How in the world are they liking my post? And it just. It just feels icky. Is there a way to

Kevin: prevent that, Kevin? Yeah. Again, like I said it's going to be based on who comes after you.

So if you're gone, who's your executor? Who do you, who did you give access to these accounts? How can they manage your social media, your Instagram account, your Facebook account. And it's all about, like you said, disclosure. It's after I'm gone. If I've got a Facebook account and you're my executor, Ralph, are you able to access that account?

Can you log into me? Can update that account and say, Hey, this person's gone. Can you close that account down for me? These are all things that, that someone who's shrewd needs to be thinking about so that, yeah, you've got these Facebook pages for people that have been gone for years now and somehow they're still on there and they're still active and they're still posting.

 Obviously it's not them. So you're wondering where is this content coming from?

Ralph: Oh, absolutely true. Kevin, I think we've had a great discussion today. I really do appreciate you being on the show. I think we've [00:41:00] we've opened up a lot of doors for people and now it's just a matter of do they want to

Kevin: walk through them?

Absolutely. It's always great talking to you, Ralph. You've been a great friend for many, many years now and always happy and grateful for the opportunity to be on your podcast. I know it puts a lot of great information out there and I enjoy listening to them as well.

Ralph: Awesome.

 Tell my listeners how they can get in touch with you and your firm and what your process is to get

Kevin: them on board. Sure. They can access me through many mechanisms. One is obviously through someone like you, Ralph anybody that's working with you and working with you on the financial side or the accounting side, just say, Hey, I'd like to reach out to Kevin and I know you can get me anytime, anywhere, my friend, or again, my name is Kevin Baird.

You can find me at www. bmbde. com. That's Bravo, Mike Bravo, delta echo. com, where you can reach me at 302 677 0061, or just go online, Google Baird, Mandalas, Brockstead, and Federico.

Ralph: Yeah. And I will put in the show [00:42:00] notes and your guest profile, Kevin, which will list all of your content and contact information.

So if people want to reach out to you, they can.

Kevin: Perfect. And when they do just let them know that they heard. They heard about me on the Ask Ralph podcast. That's that's always good for a discount. Oh, beautiful. And if you come to me through Ralph Estep always gets a little

Ralph: extra special.

Excellent. Kevin, I for your time today, my friend. You have really put a lot of great information out there and I'm hoping that people are able to use it and really take this seriously because if you're an adult, these are things you've got to do. Just, there's no excuse for not doing them, I guess

Kevin: is the truth.

I agree with that, my friend, and I wish you and your family a wonderful 2024, Ralph. Much personal and professional success, my friend.

Ralph: Thanks a lot, Kevin. It's been great. Yes.

Kevin: Thank you for joining us on the Ask Ralph podcast, and with a simple click to subscribe, we'll invite you back to our next episode.

And remember, financial issues don't have to be complicated, just ask Ralph. The information contained in this episode of Ask Ralph is based on data available as of the date of its release. Saw [00:43:00] Geo Accounting Plus and Ask Ralph. is under no obligation to update this content if changes occur. Applying this information to your specific situation requires careful consideration of all facts and circumstances, and any information provided is not to be considered as financial, tax, or legal advice.

Please consult your tax advisor or attorney before acting on any material covered.

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