What Your Will WON’T Do
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The big picture retirement showed does not provide tax, legal or financial advice. Listeners are encouraged to seek out their own advisers in these areas. Everyone welcomed the big picture return that show and your segev joined by my host john key. Off john, the other day, I was talking to someone and they said, let me give a lot of context before I can just get to the story. So they had made a loan to a family and they were talking about getting repaid on that loan and the likely of getting repaid on that loan, which to shock about on the podcast before.

right yeah which is zero or statistically close enough yeah.

So they were said, well, you know, i'm pretty sure though that at least if something that happens to me before that long gets repaid, I got that handled my wheel, said you you've got you've got a repaint at that loan handled in your wheel yeah i'm pretty sure it's in there, said, well, you know, i'm not a state planning expert, but not sure that your whales going to take care that just the way that you think I will. But I did remind me that there's a lot of people that think that this that a last willing text m is this swiss army efe that can fix all sorts of things and and make IT right. Man.

men, are you wrong? I decided to do, I used to do a speech. Of fact, I still will do IT occasionally um but I I did the same speech about eight thousand times therefore a while various venues and IT was because I did the way I was a good speech and IT lots of good topics um but IT was the five biggest elder law mistakes I remember that .

yeah and .

I am yeah you've said through and listening yet run on that we may have even done early episode with the five mistakes I don't remember but in any case mistake number three was essentially thinking that that your will was the way to go that that was the ball indole Frankly lacking any understanding of what a will does and what IT doesn't do and so yeah um yeah so I thought yeah I was kind thing and yeah maybe we just talk about what that will doesn't do um because h if you don't understand what IT does or what IT doesn't do then you're likely to blow your plan yeah and and as you were making that list.

IT was a long list. That's a john hang o now we tried to keep these episodes around half an hour, right? So there were some things that ended up on the cutting room floor.

But I think what we have left here for some people are onna go, yeah, I do that. But again, I think it's really good reminders. And for some people, this is gonna new information.

Yeah, well, and so well, let's let's start with let's start with the first one that that I think is hard for some people to wrap around the rap their mind around. But no will is valid unless IT has gone to court, unless IT has been admitted to private. No will is valid.

I don't care what state you live in. No will is valid until IT has been admit to court. And depending on which state you live in, there is a time frame. And so for example, in taxes, if you do not admit that will to private within four years of the date of death, the will is invalid. And I can saw it's five years, but if you don't admit the will to provinces, not valid.

Now every time I say that, particularly if i'm giving a speech on IT, um there will be somebody in the audience and they're looking at me and I can tell by the look on their face, they think I am wrong in fact, there are a hundred percent convinced that I am and now that there one hundred percent convinced that I am wrong, they're thinking that i'm just saying this because i'm a lawyer and because I do promotes yeah no, I did not make that rule up. It's the law. I don't make laws.

I I just work within them right? But here's the deal. What happens is people will say, um we know we're not dad is that we didn't provide his will okay, that's probably true.

You didn't but that doesn't mean that his will was valid IT means that there was not a necessity to provide your dads will. And and I I give you you know that I often then will give you know some outrageous examples, but i'll say, you know, imagine that I may. Hobo, good fashion, riding the rails.

Hobo, right? Yeah, I have my dirty cloth that I I wear. I have to stick with the the handkerchiefs, the end to Carry my bongs.

right?

And the only thing in my handkerchief's only world belonging is a eat and fried baloney sandwich. Now I do up a will, and in my will I say, I leave all my world. Lee possesion to devin. Now, if I were to die without a will, all of my assets would pass to my wife and children, even when you're not my natural air, which means, if you would like all of my world, the possessions you could take them under.

So will, right? But no will is valid until IT has been admitted to provide, which means you would have to propt that will, so that IT becomes valid so that you could then collect my dirty clothes. And my alf, eaten fried, belongs Sandy.

But you're thinking, you know what? Why would I go through the trouble of probated the wheel? I'll just take your dirty off your dead corps shop the drive baloney sandwich in my pocket and go on down the road.

And then twenty years later, you're sitting in a speech listening to some lawyer and he says you have to provide a will in order for you to be valid and you're going, that's not true. Body died. I took all his dirty clothes and sandwich, and I never had to provide the will.

Well, okay, you right you didn't in that circumstance, but that wasn't because the law was raw IT was because the circumstances didn't necessary the providing of the will yeah right but but and so uh so that's the first thing you've got to understand. The the will is not valid unless IT has been admitted to provide. Now let me give you let me give you a more concrete reason about this.

And this is actually come into some of the other things that we're going to talk about. But I I met with a Young couple this week. I don't want to allow Young couples I mean, you know couple you know like A A married couple that know they're born like you know when I was in the military, know they're like my children's age you know I don't get people my my children's age coming in to do a state planning. Very.

john. They had the older we get, the Younger everyone else gets.

There are Younger than most of my life, but here's the deal. So they had actually moved from one state to another. And so they were actually coming in to see if they needed to redo their whales because they were from florida.

Now they live in taxes. That and and they didn't necessarily, certainly not just because of that fact. A will is valid in one states, valid in every other is fun, I said.

But the one of the things is they have minor children, and they had named the guardians for their minor children in the wills. Now let's say, devin, let's say that I I didn't will. And in my will I say I leave all of my assets to my best friend, Larry.

And then I I leave my kids as devens custom device custodian ship. I mean, named you as the guardian. And I did that in my will.

Okay, now I die. Now some other family members of my are mad that Larry is getting all of my assets. So they contest the will. And so the wheel not valid because it's being contested. We're gonna have to have six months or a year worth of litigation over whether or not this is a valid will.

Yeah, meanwhile you're not the guardian of my kids because no will is valid until IT has been admitted to probate and the wheel has not been admitted to promote which means my kids are left out in the wild because there's a money dispute over here. You shouldn't put the designation of guardian in the White because the weill might get to contested and that's a different then who should be in charge of the children so anyway, just, uh, so that was one of the things I was telling the Young couple. I was like, look, you need to do your declaration of guardian as a separate document and then have your wheel over here because you don't want to have to wait for the will to be admitted to probe ate before somebody can be appointed as the guardian of your minor children.

No, I want to think so well. And that does make me call, make me hit the pause but four minute and and say, what happens in that case, right? That is i'm i'm i'm assuming that well.

yeah right.

So you really like what what what the hell does happen, right? You know in a guardianship case of guardian of miners, um the court is supposed to a point typically they're supposed to a point the people that the dead people wanted to be the guardian of their children, right? And so if if I have this declaration of guardian and that says I want devin to be my the guardian of my children, if I did, then that's who the court is supposed to a point unless you are disqualified, right? If I didn't have that, then you're just you're a there's going to be some priority among family members and and depending on the state statue.

But you can often end up in a situation where there are multiple people, all of which are in a similar priority position, all of which think they should be the ones who are guardian, and you end up in what looks very similar to a custody dispute in a divorce. yes. And and the one thing that we would have had, right, the statement from this says who he wants to be the guardian is unfortunately contained over here in this will that is not valid because IT has not been admitted to properly because other people are contesting who gets the money .

yeah that sounds nasty.

right? So anyway so all of that to say um you know the the will the will has to go to promote IT is not valid unless IT goes to property and so yeah when when people will say they're say, well, you the coming in office they say will ja yeah and I think we want to get a will so we don't have to go to prove you what you you you said a nonsensical statement yeah um there are ways to avoid probe y and and and and will I think we can talk about that a little bit but um because that all ties into this together, but the will does not is not valid unless IT goes to properly.

So that's the first thing. The the second part of that is, is kind of because of that is the relation between assets that pass automatically and assets that don't. Someone to go back to my hobo example.

right? So I am this hobo. I've got my half y and fried baloney sandwich, but I also managed to afford the premiums on a life insurance policy. Oh, now I have named you devin as the beneficiary on that life insurance policy. Now I have a will.

Now my weill says, everything goes to my wife and my kids, 嗯， but the policy named you as the beneficial, and I die, I fall off the train, get run over by the train and so i'm dead and and my wife and kids are saying, well, look, we have the will IT says, we get everything of job, so we give the life insurance money right? Absolutely wrong, right? You will control the assets that are part of your estate.

And the word a state has a very specific meaning. IT means only the those assets that were just in your name with no other transfer on death associated with them, no joint in IT with write a survivorship, no pay able on death, no named to beneficiary, right? So the fact that that I named you is the benefit, al, on the life insurance you get that done. Whether I have a whe or don't have a will is irrelevant. I mean, even to take IT to to the extreme right, I name you as the beneficiary on the life insurance. Couple of months goes by though, and you don't right, you don't call and you know you don't, uh you know you don't click the little heart on any my instagram post or nothing so after about, you know, after a couple of months I get mad and and so I make out of will and I say I have this life insurance policy, number one, two, three, four, five. The names of the named devon as a beneficial but I don't want him to get any of IT I want all of my life insurance to go to my best friend Larry over here and I get the whale n and witness notice the whole deal and I die Steven, you still get a life insurance because you're the envision the existence or non existence whatever my will says is totally irrelevant um and and this goes like your example earlier and just as an example of how this can go screwy you know your guy, he's got this will and he says, I got these three kids and i've not this one kid a bunch of money and if that, sorry, S O B doesn't pay me back by the time that cut his share by however much he was me and give you to the .

other two kids yes and it's funny because that's almost what .

is exactly what is really yeah so .

I am assuming that you've heard this story before me yeah eight .

eight thousand times, a thousand times so but so let's take that guy as an example though, right? And then let's say that all of his assets are over there with you, right? He's got to for a one k with you or an hour a that he's rolled over to you and he's got a broken account and all those three accounts, when you set them all up, you ask him, hey, who do you want this to go to? And he said, given about three kids and equal shares.

So you have the three kids as the name to benefit share is on those three accounts equal the each kit a third. Yes, the guy dies. Those kids each get a third. Yeah there may not be any assets in his state. And so that whole provision about payment back doesn't IT just there's no assets to offset against yeah because effective.

Ly, if if I understand this correctly, john, you've really got to separate out in a state into, and I may not even be using the right word here, but a probative state versus the gross estate, right where you've got the the grocery state being kind of everything that somebody owns. But that probated part is just the things that are gone to pass through the probated part process.

So if i've got my I R A, my transfer on death, let's say I live in A, I live in a state where I can do a transfer on death deed. All of that stuff is gonna ass right outside of the provoke process and maybe part of my estate. But for purposes of of forcing someone to pay off a debt before they can collect their part of that, it's not gonna en good happen.

It's just not going to happen. And and you'll see this in in lots of different situations where maybe uh maybe for example, somebody um somebody has a killed that has a disability and so they set up a special needs trust in their will. Their will says split everything three ways but give little timmy in a special instruction so that he doesn't lose his, his government benefits.

But then that you go back in their account, just named there are three kids, including timmy, as a beneficial, and they just by pass the will, right? So, so you've gotta understand the, the, the, the will only controls what goes through the estate. That has no effect on the non profit assets out there.

And in many cases, everything is a nonprofit asset or virtually everything is a non profit asset these days. Um so the will doesn't buy itself. Avoid probe. And if you don't understand the difference between a probe asset and a asset um then you know uh you can really you can butch your own planning. You can essentially you can I have had people to head whiles that they they were very I can tell by the way, they were prepared. They probably paid some lawyer a lot of money to have that will prepared because all of the fancy provisions that were in that will, and then there are state, all went as non probate transfers and bypass all they they could have just not had a will at all yeah, every penny they had paid the lawyer to prepare that will was a total waste of time and effort.

Yes, sir so there's that um again because the world does not go to project you know um I get this call probably once a week or so or at least our office will get this call um the call they say dad and he's got a check in account over a red river credit union and we went over to get the money because he's got bills that need to be paid and they told us um that they won't talk to us and I said, well, you have to talk to me because i'm the executor of his will and I shows him the will and they said I need some sort of letter from a lawyer and so we're called on you because we want you to give us that letter yeah yeah so again, I can't say enough no will is valid unless it's been admit to propt when you admit a will to property. At the conclusion of that hearing, the court issued something called letters testimonial and that's just a fancy name for saying that you have now officially been appointed as the executor of the estate. It's not a letter from a lawyer.

I don't dress this up. The court issues IT at the conclusion of the probated hearing. And so that family comes in and they call, and they say, well, we need this letter. When I explain to them, they're gonna have to provide the will. We're going to have to get them appointed as the executive and they say, well, how long that gonna take? I say, well, the will has to sit the courthouse for at least ten days before we can have a hearing.

But it's november as dear hutton and season in texas ah judging around so maybe mid december we can have a hearing or even worse, they live in a place like dallas where the courts are so backed up that IT may be six to nine months before we have a hearing to get appointed as an executive. And and and so the next question is, well, what about all these bills? Well, I I don't know.

I don't have an answer for you're going to pay the bills. What my only answer is it's not gonna be from that bank account of your dads, you because you can access that until you have letters, testimony and we don't get those until we provide the will. Now again, if dad had um you know designated uh one or more of the kids as they payable on death, that would have been a non probe transfer.

which is so easy to do .

just about .

every institution out there.

If if you to use the trust, he could have retitle that account into the name of the trust in which case the trust didn't die. You know the beneficiaries of the trust change but the trust the trust didn't die. So they as successor trustees could walk right into the bank and collect the money. You um so there's lots of ways to avoid that hassle. But yeah but the will isn't IT right again, we keep coming back to the will isn't IT. So you've got IT you know you're not avoidable probated with a will IT IT has nothing to do with your non probated assets um IT a IT IT IT doesn't allow you know there's no immediate access to assets just because you have a will because again will not well until you prove IT IT um and and then you get other issues. And i'll give you uh, a case that I had a while back.

And h is a couple and they lived in uh they lived in in taxes and they had a house in texas and they had a house in um they had a house in arkansas and and actually I say they but but really the house in texas was, uh the see if I remember that the house in texas was his house and then the the one they had an arkansas they had bought together and IT was in both of their names and uh and the the husband said he had done a will I did not do his will he he he had done that will and IT was a blended family and he had left, uh he had left his interest in the arkansas house to his kids and he had left the the the wife, his half of the the house that was in taxes, something like that, right? What he did not realize was that in arkansas, property owned by a married couple passes automatically to the surviving spouse. Whether you have a will or don't have a will is something called tenants by the entirety.

yeah. And so the will left half the house in in arkansas to the kids. And he thought he was doing good by give my wife the half the house of the taxes and I end up basically the kids got nothing the wife got at all yeah um and the kids were not very happy about this.

So jointly owned property, whether that's a husband and wife or whether that's something like, you know um mom and dad, add one of the kids to the checking account so that that kid can pay all the bills for them if they get incapacitated. Assets that are jointly owned in many cases are joined with right of survival yep, meaning that they're going to pass to whoever outlives the other again regardless of whether or not you have a will. It's another form of non profit transfer um and so yeah well, once again I have seen that happened over and over.

Devil you were talking about how simple IT is to name beneficiaries and you're ride IT is very simple. Um few years ago we had a case and uh this guy had A H check in account and he he had one daughter on the checking account as a join order and he didn't keep much money in the joint check in account, you know just enough to pay his bills every and then he had two very large cds and they were a identical to nomination and he had two daughters. And so he went to the bank and he named one daughter as a beneficiary on one city and he named the other daughter as the beneficiary on the other city.

And that way when he died, they had each get their own city, yes, makes sense. And they were a dental amount. And then he had a stroke, and he had to go to the nursing home.

And that first month, bill was eight thousand bucks, and he didn't have enough money in his checking account. And so daughter won, who is joint on his checking account, also his agent under the power of atterley. Ah well, she's going to have to liquidity one of those two cds in order choice and she's got a choice. SHE could liquidate the one that's payable to her and put that in the check in account or SHE could liquidate the one that's pay able to her sister and put that in the check in account.

Guess which ones .

you picked him 收 了 谁？ SHE cashes in the check, the city that was payable to her sister deposits that in the checking account that she's a coating IT and then about two or three weeks later dead does and he gets the C D. That she's the benefit ary and all the money in the chicken account because she's the surviving joint owner.

yeah. Did dad have a whe that left everything to his two kids? Yes, he did. Did that matter? No, I did not.

Now they uh those two sisters uh, ended up in litigation for I believe the next three years uh over all of that um uh and I don't even know how I was ever resolved。 I I was involved a little on the front end and then I got away from IT. So you t yeah I don't .

blame you yeah like .

that of a burning building I get away from um but but again, that kind of goes back to you got to understand that the joint ownerships those may very well come with consequences that are separate and apart from that will as well. Um um and then the last thing I thought I would kind of mention is asset protection.

Yeah um and and I get this a lot of times in particularly in the long term care context but not but in other context as well but but particularly in the long term care context, people will come in and they will say, well, john, uh I heard that if I go the nursing home, they will take my house yeah well and we've talked about this on the show nursing homes don't take houses um but many people cannot afford nursing home care and so they rely on medicaid. And medical is a loan program. It's not a different program and there is the medicate, a state recovering uh and and basically a debt that you are racking up with the state and and that that that becomes due and payable upon your death.

Now they they say, well, you know, i've heard that they are going take my house so I need to get a will and that way I can will my house to my kids and then if I go to the nursing home, they can't get IT. And that again is totally wrong, right? So the the project process again, step one is having the will admitted to Robin, but that's really just step one once you've got the wild mated to probate and you've got the execute appoint, the executor has jobs.

One of those jobs is to provide an inventory of your state. So here's here's what you own. Here's what's part of the estate. Now again, you wouldn't put the non profit assets on that inventory. They're not part of the estate.

But if you had a house, for example, in that house was just in your name, that house would be on the estate inventory. The second thing you have to do in that private in after that is published notice to creditors. Anybody who has ever proposed the classifies of their local newspaper has inevitably seen a little thing back there in the specifies that is something like, uh, this an legal announcement.

Kevin Carol has been appointed as the executor of the estate of john ross. Yes, something to that effect, right? That is the notice to creditors that's to tell anybody out there that in this example that i'm that devin is in charge and if I owe you any money, you need to let devin know about IT yeah so you can get paid.

And in in the state, in the property, there is a priority of who gets paid um who gets paid first in all of these things and and so um the beneficiaries are the less on the list yeah everybody else gets paid. The funeral cost usually go off the top. The cost of the administration I eat, the lawyers fees usually come off next.

Yeah secured creditor, they get their money. Unsecured creditors, they get their money. And now if there's anything left, give IT to the beneficial. And if you have been on medicate while you're a live, one of those creditors would be your states department of health and human services and they would be filing in that estate, saying we paid three hundred and seventy five thousand dollars in long term care costs for this person, and we want our money and they get paid before everybody else and so that will absolutely doing nothing to protect the assets, particularly from death.

Creditors I mean certainly doesn't do anything for you while you're alive um you know so it's not going to protect you from uh you know long term care cost or or asset protection or anything like that um in fact uh and and and IT doesn't really protect anything at death either, because everything that passes via the will is subject to all of your creditor. And and and I know so many people when they hear that the first coming out of their mouths, well johna, that were retired. We're deep free, right? I don't.

Oh, anybody opining. Well, you're right. What if the reason you died was because you kept driving a little bit too long? Yeah and you died in a car rack that was your fault and that also injured somebody else.

Your estate is about to get sued. Yeah if there's anything in your estate, it's gonna be subject to those creditors, right? So there's no asset protection for a will. So anybody who has just heard all of these things, you should probably be coming to the conclusion that most people would come to after, uh, get up giving speeches on this in the past and and often by the time I get to the end, people will say, why not help what I wanted .

anyway ah .

and I actually agree with that statement to an extent. Here's one. Here's my, here's my simplest example, have a will and plan not to use IT k right? So you have a plan to not use the will.

And and by that, I mean, you have either named the beneficiaries on everything, maybe you've put everything into trust, but one way or the other, you have a plan for non profit transfer of assets yeah so your plan is to not need the widow yeah and if your plan holds, then you did not, in fact, need the will. But there's always the chance that you you you don't plan for every you know, a couple of years after my grandfather died, I got a call. My grandfather died in granberry, texas.

That's on the other side of four worth. Now I get a call a couple years after he died from a land man work for an oil and gas company out of conway, arkansas. And this guy called my office and he says, he says, i'm looking for john ross and I said, well, you're found IT and he said, what are you? John Kelsey ross, middle name spelled K E L Z Y and I said, yeah, i'm john Kelsey ross and he said, well, have you ever owned any property in conway, arkansas and I said, I have not but if you're looking for john Kelsey ross, my folding is john Kelsey ross the forth and I know who the other three are. Yes, my great grandfather lived in conway are yeah, apparently at some point back in the maybe thirties, my great grandfather solar piece of property.

Now I didn't know that. I did not know that your great grandfather .

lived in convoy arkell. He did. And when he and he when when he saw this piece of property, he kept the mineral rights. Now IT had never produced, you know, nobody had ever leased those minerals. Nobody had ever tried to drill out there.

So that deed where he reserved those mineral rights just set there, getting dusty in the course in conway, arkansas, until somebody, some more than gas company, decided they wanted to try to drill for l guess, and they needed to figure out who owned the mineral rights. Well, I say all of that to say that when I did my grandfather's planning, I tried to set his state up so that that would be a non profit transfer, every right, avoid the necessity of that process. But when I did that, my grandfather didn't even know he had inherited mineral rights from his father because they had never.

And so when I did my grandfather's planning, we did not address mineral rights in conway, arkansas. He didn't even know he owned them. There was no wave.

I could have addressed that for him during his lifetime. no. Did he have a? Well, anyway, yes, just in case. In his case, we ended up needing IT. And so I have been able to file that. Will in conway get IT admitted to provi because IT wouldn't have been valid otherwise and then that was able in to transfer the mineral rights to my my dad man and go on down the road right? So the the whole point there there is you have a plan to not need the will and then you still have one just in case.

Yeah, yeah. No, john, let's say you are. What of those families will go back to the very opening of this show that you have long money to someone? Then could he be said that there are cases where is best to not use the non profit transfers if you want to ensure that your estate gets paid back from one of your near the well kids? That still owes you money. And if you use the product, nonprofit transfers like transformer ath beneficial, designed so and so forth, you know that's just going to pass directly to those beneficiaries.

Well, actually, so I I would still say that the way I would suggest doing IT would be instead of using something like beneficiary designations, which are are very cold, right? Mean, if you're naming beneficial is you can say you get this, you get this, you get this, but that's IT.

But what if instead we created a trust and then we either retitled their broken account into the name of that trust, or we name that trust as the beneficiary, paying on death for other accounts? right? Yeah, yeah.

So, so when they die, this trust is gone to control all the assets in a non profit fashion. yes. And then that trust can say, alright, take the three assets uh or take the three kids and then the dead beat over here who uh is is using his parents as a version of welfare program. Let's cut his share by whatever metric we've decided is appropriate and give .

that to the other two. Yeah perfect. What that seems like an easy work around then and still being able to avoid the long drawn out promote process.

Absolutely yeah. Just about any option is going to be Better then the private option. Now I will tell you, um uh I could I have gotten into arguments with other lawyers over this, uh, this position, particularly in in exes, but some to some extent in arkansas as well, that say, you know where the project process is not that big deal.

Does IT take a little time? yeah. Does IT cost a little money? yeah.

But when you compare the cost doing that to save the cost of creating a trust there, six of one, half dozen of the other. And so for most people, the will is just simple or option. And and yes, got to go to proceed. And I totally disagree with that statement. Um and part of that is because most people, uh again, this is my experience, but most people will end up by passing the will with all these other things anyway.

So if you've got these kind of intricate playing that you're doing where you're offsetting or you've got trust for kids or things like that, putting that stuff in a will, you're probably gone to end up by passing the wall and screwing IT up yeah right. The the the the creditor claim when IT comes to probe ate assets. Um I mean, that's a big one and and there's no other solution to that then keeping everything out of the project process.

So I I really am a am a big proponent of keeping everything out of the project process um and then just having the wheel there as a back up. I also will say that I am a little gated on the uh the lawyers um and that's because for every one of those lawyers that says all the project process isn't that bad. If you're having a bear with one of those attorneys and you get get him talking about how they really feel, what they'll usually tell you is that the beauty of the will is that they get two clients out of .

one yeah right um because they get .

to charge for doing the will and then charge for doing the project. Yes, if they instead are charging you to avoid the probe ate well, they're probably not going to see you again. right. Yeah um and and and so you know they're trying to build in some future business then some .

recurring revenue .

that may be a little bit dated. Uh uh you want IT, but if they wrong either no.

I think it's accurate for sure. Yeah, well, let me, let me ask you about the dead requite before we won this up. So john alist say, let's say that every asset I have is in some sort of non project transfer vehicle, whether that's a trust, my accounts, whatever is. And in the two years before I did, I, assad, to live IT up, and I max out my credit card, and I did. If those assets are going straight to my beneficiaries, then what do the creditors do?

Beat feet really in. And now I will say that this is somewhat state specific, but generally speaking, um the the estate works like a bankrupcy. And so you have assets, you have creditors and and those creditors have priority again, that's if you know anything about bankrupcy that should start sounding a whole lot like a bankrupcy.

There is assets, there's creditors and then there's a priority among these creditors. And so you're gona take these assets and you're gna divide them among these creditors in order of their priority. And then with whatever is left, then that goes to the beneficiary, right? Except that if there's not enough assets to go around, then based on those priorities, you're gna start allocating and and maybe you don't get your whole debt paid, you get a portion of IT. Now if you're doing a bankrupcy and somebodies just flat broke, then none of their creditors get paid.

right?

Yeah and the worst same thing in in the state, if there's no assets in the state, then there's no money to pay the estate creditors. So now I say that with a, with a with a bit of caution. Some states have some provisions that will pull none property assets into the estate in the event of A A bankrupt to state. The other thing is some states have what they call filial responsibility laws yeah failure responsibility laws are where the children are liable for the the personally liable for the parents that uh, particularly if there are things like medical care uh and stuff like that. And so uh now there's only a few states that that have failure responsibility, but that is out there.

So there are there are exceptions to that general rule um but but you can you can often and you know to your to your example and there was this a there was I had a case years ago and and this woman he was the mother of a four or five or sexual little girl, the father was dead um and then the mother got a terminal illness and now he had a house and and he had some money in some retirement um but not much else and he went out and did IT almost exactly what you just described SHE took out bank loans, bank signature al loans SHE took out every credit card SHE could get a hold of and SHE took that five or six year old daughter of hers. And for the last year of this woman's life, SHE created a year, a lifetimes worth of memories. Yeah, they went to disney land, they went to disney world, they went to mall of america, went on a shopping spring.

They lived IT up. And then the mother died, and he had, I think, two or three hundred thousand dollars worth of death. But the house passed outside of property.

The I rs. Passed outside of property. The retirement accounts passed outside of probated. There was nothing for the creditors to get.

wow. Okay, so we can go down a habitable there, but I don't want to go too far.

And I get a lot of questions from people about that sort of thing about what happens to any debt that I may have, whether that's a death that i've created or maybe it's one that I screw up on my taxes and didn't realize that or I had a got to tell me not long ago that, you know, David, I figure that i'm gona live about eighty five, right? That goes back to that episode that we had on life expectancy. How long will you live?

What this got happened to know how long he was going to live. And he told me goes, I want to decided I am not paying my taxes for the last five years when I am seventy nine. That is the last tax return I ever follow because I figure it's gonna them at least that long to catch up to me and then i'll be dead. So IT doesn't matter. I'm not paying any more text.

Well, he is wrong. I mean, I if if all of his assumptions are correct IT IT does generally take the the R S is quite slow yeah um and and you can you can shock and drive for A A couple .

of years yeah yeah oh man well, I have been recommend me that strategy to .

him yeah you know um yeah we talk about like security creditor right um like you know um uh you know my probe ate a state um if if my house passes outside of property the mortgage company still gets paid yeah right because their dead is time to the house doesn't matter whether is that house is part of my state or not part of my state, it's time to the house yeah the very second, the very second you owe taxes and do not pay them right? So that that moment right there so April fifteen you finally tax return and you own taxes or maybe you're just said, like this guy is like screw and not even filing the tax return, all right.

Yeah then on on April at at twelve o one April sixteen, when he owed taxes and did not finally return, a federal taxine was placed on every I said he owns that is what they call a super creditor and IT is a lean it's not an unsecure death that a master card that is a federal tax lime on everything. Yeah, everything down to the couch and so yeah, he dies and yeah, he didn't pay taxes for that five years. But that federal taxing attached to everything he had, which means is still attached when his kids inherit that federal taxi, still attached.

Oh, man.

tell, tell if as long as he don't care what happens after he's did, he's wrong.

Very good. Aren't giant. Let's let's not go any further down the arbitral. Let's waned up right here. You know, I want to read the last part of a review that we got, and this is a pretty long review. Uh, this is from fill at sixty three.

And at the very last part, he said there are counted as informative and engaging with little filter and no commercial. Now that stood out to me. So number one, we don't have a sponsor the show, right? We're not looking for one either, right? I suppose if the right fit came along and we really thought I was good for audience, yeah, we might do a sponsorship and .

there was still on the check. That's right. yes. IT couldn't be .

a smaller out, right? So but but the part about the filter now that's interesting. So today, so two days ago, I went with my wife to a doctor's appointment and and I had some work to do.

So he was going to listen the podcast on the way up there a in her airports and I just kept noticed in that a SHE was getting her phone and picking IT up and you know, hit and button on IT and I finally said, what's going on all he says, well, i'm trying out this new podcast and i've listened to three episodes now and and the first ten minutes of IT is just a big long commercial for whatever product is they're pushing in that episode. And you know, I started think IT about IT in in some of these podcast episodes are out there. They are that way. It's just a much a filter and they're just talking about their product and I are no in so people don't get IT. So i'm glad that we've kept this simple or we just sit down, we say, hey, here's a topic we need to talk about but talk about IT and at the end of.

yeah I don't mind the commercial to and some of the ones that that I listen to you know um um but but I will say that yeah some of the filer does kind of drive me drive me bonkers yeah yeah.

I get IT for the people that are professional pod casters. This is what they do. Well, I got to make money somehow, right? Sure, a question. But I mean, this is not, this is not what we .

do for a lidia. We have other .

streams of real jobs. Yes, we do very good. Well, thank you. Feel at sixty three for that review.

And to the rest of your listeners, if you have IT left of left us a review yet, please do. Apple podcast is at this place. Spotify is also great.

But if you don't have access to either of those, you can always go our website, big picture retirement that calm our job. Let's leave IT right there until next week. We'll be right here bringing youtube and through a very Young, big pictures of time, special listening.