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It's more than just a ticket. It's Friday and today that means live Q&A. Finally, live Q&A. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now, while building a plan for financial freedom in 10 years or less.

My name is Joshua and today is Friday and we have the open phone lines. I finally was able to find a working internet connection. You would not believe how tough it has been to actually find and use an internet connection but today I've got it done. One of my personal pet peeves is people who complain and always make excuses for things and so I try not to always make excuses for things and that's kind of how it feels when I do these Friday Q&A shows is I feel like I'm always making an excuse for the fact that it's been a long time since I've gotten one done.

It's just been surprising. I can find pretty reliably good solid internet to be able to upload my shows because that doesn't require a simultaneous open communication thread between me and the callers. But to actually record and get good audio quality for live Q&A has been challenging. But I've got new strategies, keep solving my problems, so let's see if these new strategies can pay off over the next few weeks.

But today we begin with Kevin in Colorado. Kevin, welcome to the show. How can I serve you today, sir? Yeah, thank you, Joshua. I appreciate you taking my call. So I have two questions about having to do with health share ministry instead of insurance. First one is, is a health share account compatible or excuse me, is like an HSA account compatible with the health share insurance program or not insurance program?

Is that such a funny and kind of a frustrating thing to constantly emphasize this is not health insurance, but you know, but it is functioning like health insurance. Short answer, my understanding is no. Legally, technically, my understanding is no, probably not. Now, I think if I'm up to date enough on this, number one, this is something that the leaders of the health sharing organizations have been lobbying to get approved because there doesn't seem to be any reason why it shouldn't be approved except for the fact that health care sharing ministries are not insurance policies.

And so therefore it doesn't technically work. So they've been trying to get the law changed. If my information is correct, I think they haven't gotten it done yet. I would also say that this is probably one of those areas where it's worth testing. You know, if you had administrative access to, so there are certain areas, back up just a moment.

If something is not approved, but it is not, but it is also, there's reason why it should be approved. It's one of those things where you sometimes wonder if it's not worth just trying because you're right within the intent of the law. And if you can make it happen, you know, you wonder if it's not worth going ahead and trying it.

So if you can participate in and make your HSA contributions, it's not like you couldn't do that and then also say, but look, I have what is in many ways equivalent to a high deductible health insurance policy, so I should qualify. Now you're asking me on the spur of the moment.

I don't know that this has been tested in tax court, but sometimes on some of these things, it has to actually be tested on to in tax court. And I wouldn't mind, you know, of course, I don't know who you are or where you're from, but I wouldn't mind hearing about your being the kind of person to actually test this because I don't see any reason why you shouldn't be able to participate in it.

And if you went to the ring with the IRS and they say, no, you can't make these HSA contributions because of the fact that you have a healthcare sharing policy, I don't think that's too big of a deal. I would take it to tax court if you have the stomach for that kind of thing and see if you can get a ruling one way or the other.

If you lose, so what? You know, you don't lose anything, maybe some penalties and fees, which aren't going to be that big of a deal compared to what you would have lost otherwise. So I guess the answer is no, I don't think it's technically allowed, but I'm not aware of a revenue ruling or a tax, you know, court decision or something that we could look at and say it's absolutely forbidden.

And if my information is current and the audience will correct me if I'm wrong, it's not current. It's something that is kind of a gray area of the law. Make sense? Yeah, that does. And if I have Joshua Sheets's encouragement to push the IRS, I think I'm going to go for it.

Well, it's one of those things where here's how I look at it. So IRS gets a lot of bad raps, right? And I'm certainly prone to dumping on the IRS and I know some revenue agents that listen to the show and I've talked with them. I've had I actually had some clients that were formerly, I formerly had some clients that worked for the IRS and they're often caught in a bad spot.

So here's how I look at it. Number one, if you think you're right about something, you shouldn't be so cowed by government organizations like the IRS and you shouldn't be so cowed as to as to not, you know, to just didn't to do nothing. You're the one who's you're the citizen.

You're a citizen, United States of America. You have every bit of a right as anyone else to do what you think is right. Now, if the IRS has ruled on a decision and that's where you're getting getting me on the off the fly, haven't gone and searched, maybe they have issued a revenue ruling on it or an advisory of some kind.

If so, then you know, they've issued something. But even still, that stuff has to be settled in court. And so, you know, ultimately can be tested in court. So most of the much of the law that we rely on to say, yes, we can do this relies on somebody having taken having taken it to court.

Let me give you just a simple example in in, you know, in estate planning or tax planning will often refer to something that that is we use a name because it's based upon something that's in court. So this morning I was working on a segment and I was talking about a trust with crummy provisions.

They're called crummy provisions. And basically what that refers to is that refers to a case involving a man named Crummy who is trying to give a present interest contribution to a trust. And and it's that case that that now is standard fare for how estate planners regulate the gift of a of a present interest to a trust versus a future interest of a trust.

And basically, when you if you want to get a gift of a present interest, you have to allow the beneficiary of a trust a right of withdrawal. And that was laid out in the court case. So without teaching on crummy provisions, the point is, how did that get created?

How did that get established? Well, it got established through through a law, through a court case that then becomes because of our common law system, then becomes part of how we operate. And so if you think that this follows the spirit of the law, but if you can't find a contrary letter of the law ruling, then I think that you should go for it.

You should try it. Now, let's understand what the risk is. The risk is that, number one, you might get audited. Well, there's a very low chance of getting audited depending on on who you are and what the actual where you live and what your risk profile is, etc. I have a much higher risk of getting audited than you do because of what I do and and and how I do it.

So most people have a very low risk of being audited. Now, if you do get audited, then you you may be audited or not audited for this. So if it comes this comes up in your audit, you may test it. And if the IRS says, no, we're not going to allow this, what's the worst that happens?

You say, OK, and you amend the return and you file and you pay them the money that you took a deduction for and you reverse the withdrawal. Like it just doesn't it's not that big of a deal. The only thing where you actually wind up risking jail time on some of this stuff is if you don't report income.

So you should report all the income that you make that keeps you out of jail. And then the other stuff go with your make a make a good faith attempt. Now, research to see if there's a revenue ruling or something else. I'm not aware of it. But if I were in your shoes, if I had an HSA open, if I had a health care sharing account, if I could make those contributions, that's the kind of thing that I would do.

And I would be willing to fight for it. I'd be happy to take it to tax court and let the judge rule on it. And if I lost, I would be ready and willing to pay. If I lost, I would be ready and willing to say, OK, I lost.

But I think this this is this is right. I don't think that's reckless. I think that's an appropriate way to handle it. OK, well, I'll look more into it and I will I'll report back to you with what I find or what I do. Please do. And I have a lot of smart accountants that listen.

So if I if I if I've missed something, let me know. I'm just aware that in the political season, I think a year ago, this was one of the things that many of the leaders of the health care sharing ministries were trying to get pushed forward. And I don't think they got it done.

Did you have a question, number two? Yeah, one more question also related related to health sharing ministry is how do you how do you deal with the the risk of a large medical expense that exceeds the health share, what they will cover? So with the organization that my wife and I are with, I think it's about a quarter of a million that they'll cover.

And after that, they they're they don't say they won't cover any, but they don't say they will. And so from a risk mitigation perspective, I'm just kind of wondering the best way to go about just avoiding catastrophe if there is a really large medical emergency. So there are three.

Let me give you three things to consider. Number one, many of the health care sharing ministries offer different tiers of coverage. And so much like when you review insurance policies, as your wealth changes and as your situation changes, you should review the tier of coverage that you have. You should do the same thing with what tier of participation you have.

And different organizations are different, but some of them have lower tiers. For example, the one you're with may be two hundred and fifty thousand dollars, but they might also offer an additional program, which is a higher program as well. Some of the health care sharing ministries will cover you up to a million dollars.

We've this is hard. This is a hard decision because many of us have gotten comfortable with the idea that a health insurance policy will cover an unlimited amount. And we think immediately of the worst case, catastrophic, you know, stage four cancer with three years of intense medical bills. Now that's possible, but it's not necessarily the most probable.

In other areas of life, we also have significant risk that's not fully covered by our by our insurance policies. But because we're not used to insurance coverage being unlimited, we don't think as much about it. So, example, you have on your car insurance policy, you have limits that you've chosen with your insurance agent for your liability coverage and your property damage coverage.

Those coverages are not unlimited. Now, you might set them low or you might set them high, but they're not unlimited. You might also have an umbrella liability insurance policy that coordinates with those contracts. But that umbrella policy is not unlimited. So it is possible that you could get in a situation where you get drunk and you drive into a school bus and you kill 15 children in the school bus and you lose 15 lawsuits, each of which costs you 15 million dollars and you wind up bankrupt.

So that's possible with your car insurance and your car insurance isn't going to cover it and your umbrella policy is going to run out and you're going to lose your lawsuits. So the same thing applies with health, that it is possible if you are choosing a health care sharing agreement that only covers you for a certain amount, it is possible that you could have coverages in excess of that.

So what do we do? Well, number one, you try to think about your situation and you try to do an honest assessment of risk. And we've lost the ability to do this very frequently. You can't protect against all risks all the time. You just can't do it. It's not possible.

So you start by saying, what could I actually do? And you're better off. Most medical things are not going to be more than $250,000. They're not. Now, of course, there are plenty of horror stories where there could be more, but they're not going to be generally. Now, then what do you do if you do have more than that?

You look into additional coverage with the company and then you think about what would actually happen if you were in the midst of it. Now, if you had one catastrophic point of coverage, where you had one system where you had a terrible accident and $5 million of medical bills, you're just going to be dealing with that, which I'll get to in a moment.

But what if it were more slow? Well, if I were facing some kind of ongoing disease, then I would just simply go on over to a commercial insurance policy if it looked like it was going to be on an ongoing basis. And with the fact that I've had coverage, which qualifies, and with the fact that health insurance companies under the Affordable Care Act can't deny you for preexisting conditions anymore, then why shouldn't I just go and move on to a commercial insurance contract if I've got a long-term ailment?

I don't see any reason not to do that. The insurance companies, that was what they bargained, that was what they set up. So fine, I'll deal with that. And I'll just move over onto a commercial policy that does have an unlimited amount. Now, let's say that I can't do something like that.

And let's say I'm left owing a big bill. Well, the healthcare sharing organization will participate in a certain amount of my costs. But then if I run out of that, then I'll go and deal directly with the hospital. And I'll try to settle that just like any other debt.

So I'll try to work out a payment plan. I'll try to work out discounts as a cash customer. I'll work with them as much as I possibly can. And at the end of the day, I'm going to make sure that I always do good asset protection planning and good bankruptcy planning.

So if I'm all of a sudden faced with $3 million of medical bills that I can't negotiate down, I can't set up on an affordable payment plan and aren't covered by the healthcare sharing ministry, well, that's what good asset protection planning is for, which is why I'm doing a whole series on asset protection planning.

That's what good bankruptcy planning is for. So I declare bankruptcy. I default on those medical bills, and I start again. And that's the ultimate solution. And that's what many people do. So those are my answers to your questions. That's how you approach it, or that's how I think you should approach it.

Well, that's helpful. Yeah, I appreciate that. Just recognize this. It's not possible that any of us can perfectly ensure and protect against everything. And the medical stuff gets under our emotional skin. Now, I'm all for planning, but this idea that... Man, I don't need to repeat anything. You had a question number three, Kevin?

Nope, that was it. Good. Well, thank you for calling in, and I hope that it works out for you. I do love the healthcare sharing ministries, and I hope that it continues to work out well for you and your family. We go now to Tom in Salt Lake City.

Tom, welcome. How can I serve you today, sir? Thanks for taking my call, Joshua. I really appreciate it. My pleasure. I've got a friend whose last parent just passed away recently, and she's asked me a little bit about how I'd go about dealing with the inheritance. The only thing she'll be inheriting is a duplex, which her mother lived in a lower portion of, and she's been living in a, excuse me, upper portion for many years.

She will need some money for repairs that have been from deferred maintenance on the property, has a little bit of debt in her mother's estate that the house will need to stand for. But this friend is also a single mother of four, fairly low income job, maybe $35,000 a year, has very little cash on hand, about $55,000 in student loans, and another $30,000 in credit card debt.

So she's in a tough spot. And with talking to the mortgage company, they're really pushing her to do a cash out refi, essentially, on the property to clear some of her other debt. My concern with that is that as the mortgage currently stands, if she just is able to assume that, payment's very, very low, $240 a month.

If she refied how they want her to, it's going to push the payment up to over $1,000 a month, which is about half of her take-home pay. What's the current market value on the duplex? Probably about $300,000. And how much debt does her mother's estate have? A couple thousand dollars.

The remaining balance on the mortgage is $48,000. So there should be here, if we could settle this estate, she should clear about $250,000. Is that right? Yeah, that's accurate. And about how much is the guess of how much money is required for the necessary repairs to get it in a saleable condition?

I haven't walked through her mother's portion, but I would guess it's probably going to be between $5,000 and $10,000. What's the student loan debt that she has? What is that from? Obviously, it's from student loans, but did she finish a degree? She's only earning $35,000 a year. It doesn't seem like that's paid off for her.

So tell me a little bit about the story of the student loan debt. Yeah, she went to school, did an online program, and then came out of school in a poor economy, wasn't able to get hired, and ended up working a string of minimum wage jobs. She's gone back and got some technical certificates and is working in a field completely unrelated to her degree field.

But the career prospects in her degree field wouldn't move the needle much on her salary. All the entry level stuff is pretty low because it's a lot of public service. What's the credit card debt from? Overspending, general life. Two of her children, one of her children is a single mom now, and the other's on full disability through SSDI.

So she's had that. Poor spending habits, not good with money in general. So a lot of my concern is that if she did do a cash out refi on the house to clear a lot of these debts, it's going to take away the security by moving all those unsecured debts onto a secure asset.

And then she loses the security of having that really low monthly mortgage. Right. How old is her youngest child? Nine. No, sorry. Sorry, 12. Okay. So two younger. So 12. What are the ages of all the children? She's got two younger, two older. The two younger are still in middle and high school.

The two older are out of the house. But one of the older ones, the single mother, she's helping out the other one is the disabled child that she helps out a lot. Is she receiving any alimony or child support payments? No. Got it. And isn't likely to get any.

Okay. Has she made any improvements in her finances in the past, recent history? Is she taking control of her budget, taking control of her expenditures, making any positive changes? In that regard, maybe slightly, but not much. She has made some good positive improvement in her salary over the last couple of years.

And has been listening to a little bit of advice there. So that's positive. But this part of me has seen her track record and doesn't see it getting significantly better to be your common listener. But at the same time, she's come to me in tears saying that her mom's passing and this current state of affairs has been a real wake up call.

And she wants to do better and set herself up financially in the future because she's done such a poor job with money. Right. Right. Yeah. These are some of the toughest circumstances to deal with because you're trying to discern somebody's behavior and behavior change. And you want to always believe the best and believe that people can change because time and time again, people have proven that they can change and that things can get better.

But on the other hand, you need to have evidence of that. And so figuring out how to create those two things is hard. So I would say first, given the fact that this is a new thing, she's in a place where she wants to change, but she hasn't yet shown that she can change or that she's willing to change or she's willing to do the hard work.

Then I would say probably the best course of action is to believe the best, but be very slow to commit to any changes. Try to be maximally defensive, but not make any big changes. So let's talk, the most obvious is the credit card debt. Obviously, any person who is involved with a single mom of four children, one of her children being also a single mom, another child being disabled, low income dealing with that and without receiving child support and alimony, which is also reflective of a lack of other forms of support from ex-spouses and fathers of children.

Obviously, our hearts go out to that kind of person. And I think we would all be very charitable in terms of the creation of credit card debt and understanding of why that happens. The problem is if that continues to happen, everyone has a point of where they're comfortable. If she's comfortable with $35,000 of credit card debt, right?

Yeah, $30,000. So if she's comfortable with $30,000 of credit card debt on a $35,000 salary, that is an insane amount of credit card debt for that salary. And so that's not just a little bit, like that's a long track record of either a few huge decisions or a long track record of significant overspending.

And so there's not going to be any easy way to solve that. And if she, over time, if that just accumulated a little by little over time, then it's a real problem. Now, if we look back and we could do a forensic accounting analysis of where did that come from, maybe her daughter, her disabled child had an especially difficult time and she couldn't work.

Maybe it all came from a couple of months. Okay, well, that's different than if it's just an ongoing period of time. But I think you really got to dig into that because that's a huge amount of credit card debt and it's a major danger zone because people who are comfortable with $30,000 of credit card debt on a $35,000 salary are likely to jump right back into it.

And I think we've all seen again and again and again where inheritances and money just gets squandered so quickly and you fast forward three years and the money will be gone just as quickly as anything else. So I would try to work with her and try to say, "What are some small steps we can make that are going to show that you're paying attention and being careful and diligent and help her to get some wins?" Not big stuff, not you're going to go from $30,000 to $10,000 of credit card debt, but can you track your finances?

Can we just keep track of what you're spending and then look at it? Can you cut one area of expenditures or can we track how you're doing with your income? But I would try to keep this money separate because she is certainly, under the current profile, she is certainly heading for default.

To have $85,000 of debt on a $35,000 income is significant. So my thought is probably what would be the best, ultimately what would probably be the best would be to sell the house and then use the money to enhance her own situation. And it might be possible to do that in a way that allows her to continue to exercise her money muscles and clean up the mess while also enjoying the benefit of the inheritance.

So for example, do you think it's possible that the house could be sold and then she could find a reasonable place to live for about the amount of cash, say $250,000 and pay cash for an apartment or a condo or a house that would be appropriate for her and her family to live in?

Yeah, that could be a potential. Yeah, if she just cleared the estate and used the cash not towards her debt, but to get some security back in her life. Because if she did something like that, then, and I'm not opposed to paying off the debt. I'm just opposed to paying off the debt unless she's committed that she's never going to go into debt again.

Because obviously her circumstances are understandable, but they're not going to help her to win. To have $55,000 of student loans for a worthless degree that you're making $35,000, she can make $35,000 without any degree ever at any number of jobs. And so this was a bad decision. And then to have the credit card debt on top of that is just probably a portion of unfortunate circumstances and bad decisions, which again, understandable, but she's got to be tougher and right the ship.

So would it be possible in terms of with the needs of her daughter, other children, do you think could reasonable housing be obtained, condo, duplex, single family house, could reasonable housing be obtained in the neighborhood, in your market for between $150,000 to $200,000? They'd have to move out of the area at that point.

This property is in a desirable location, but just due to the age of the home and its current condition, the normal properties in the area are probably between four and $700,000. So they would have to move half an hour, hour away. Could she and her children move into one unit of the duplex and live there comfortably?

They have been. They have been for years and years and years. Oh, okay. So that was one consideration. I didn't understand that. Yeah. So they've been living in part of the duplex rent-free for years and years and years. So part of my general thought process was to see if she could find a way to settle the estate, keep the existing mortgage and rent one of the units and use that.

I mean, that would be a 50%. Right. It'd be a huge cashflow and it'd be a huge bump in her income to be able to start addressing her other debts and other previous things or to keep the unit, refi it, clear it, and then use the rental income from the other unit to help break the ship.

Right. Do you know anything about her credit score? It's bad. I couldn't give you a number, but- But a bad credit. I mean, the credit cards and student loans have been in default for years. Ah, so is she paying any of those loans? Not the student loans. I'm sure she's paying some of the credit cards, but I don't know how much of them we've gotten in that much detail.

It's mostly just all been brief right now. Is she in the state of Utah? No. What state is she in? Washington. Okay. Washington State. So just a moment. Okay. With the magic of podcasting, I have pulled up the Washington bankruptcy exemptions. Let's go through this. Now, I'm no expert in Washington law, but at least I can read the Washington bankruptcy exemption.

So the first thing, the most important thing with a homestead, real property or a mobile home up to $40,000 of equity is protected under Washington bankruptcy exemptions. And the reason that I'm doing this is when we get to, if she's behind on credit cards, and if she's not paying student loans, then we want to be cautious about all of a sudden having a bunch of unprotected money show up.

Because at the very least, we want to settle this intelligently. At the very least, you want to go through and individually negotiate with each of the creditors and try to get them to settle as inexpensively as possible and do this reasonably. But we also want to understand what the legal protection is here.

So if she has been previously living rent-free and let's assume she doesn't have any money in a bank account or anything like that, then she was a relatively judgment-proof borrower. But now if all of a sudden she comes into several hundred thousand dollars of property, then it's questionable of...

We have to think about how to protect her from all of a sudden facing six lawsuits and dealing with that. So first, has the estate been settled yet? Or where is the estate in the process of settlement? I would assume nothing's happened. I mean, her mother passed away days ago.

Okay. So good. So you got a little bit of time to do this intelligently. So first, let's real quick look at the Homestead Exemption Laws. So here's what's exempt in bankruptcy for Washington. $40,000 of real property or mobile home ownership. Appliances, furniture, household goods, and home yard equipment up to $2,700 total.

Books up to $1,500. Burial plot, clothing, no more than $1,000. Food and fuel for comfortable maintenance. Keepsakes and pictures. One motor vehicle for each individual up to $2,500 total. Professionally prescribed health aids, annuity contract proceeds to $250 per month. Disability proceeds, blah, blah, blah. Group life insurance proceeds, blah, blah, blah.

ERISA benefits, IRAs. Looks like that's about it. Child support, farm trucks. Okay. So that's... And then wages. So it looks like she'd be okay. Up to $2,000 of any personal property. So relatively low homestead exemption limits in the state of Washington, but worth paying attention to. Here's what I think might work out to be the best.

First, I wouldn't hurry to settle the estate. What I would hurry to do is to start to help her to say, "You've got an opportunity." She's got a couple of opportunities happening in her life. First, her younger children are getting older, nine and 12. They can be increasingly autonomous, which frees her up to fix her career problems and move into a higher paying job.

She has probably diminished her career prospects because of caring for young children. Now that her children are getting older, she can substantially improve her earning by... And apply the degree and improve her career. Number two, she can start to show, put in place some good habits of financial management, like tracking how much she's spending, like being aware of how much money she has, just simply starting to manage certain things.

Number three, she can get a full picture of where things are. She can pull her credit reports, find out how much is owed, make a complete listing of the creditors, and start to challenge that process and try to get an idea of what is owed. She will need to become an expert or get counseling on how to deal with the creditors.

You'll need to get an understanding of who owns the debt currently, make them prove that they have legal title to the debt, so when you start paying it, you don't double pay, and then start the process of figuring out what letters is she already receiving, what settlement offers is she getting from them as things are right now, and start to get an idea of how much debt we're talking about here.

I would move slowly in settling the estate so that she doesn't immediately come into the money and then have to figure out what to do. So she doesn't immediately come into the asset where all of a sudden the creditors can force her, can force the foreclosure on the sale of the house.

So my guess is what would work out best is for her, because the house can't be protected fully by Homestead exemption laws, it probably will work out well for her to refinance the house. And if she can refinance the house and then use some of that refinance to settle the debts inexpensively and to pay off the things that are there, I think that would probably be a good move.

That would probably be the best situation. I would try to refinance it just a little bit and get a little bit of money out of it so that she could only wind up with not a bunch of money to blow on some kind of consumption thing, but that it could actually be set aside for her future.

I would think about selling half the duplex if it's divisible or already divided, or if not, then yes. I think if she's already living in one, the most sensible solution is just to keep it, rent out the other unit and use it as a rental income. That would help her to avoid having a lot of income or all of a sudden money that she would spend and she could continue to have a good place for her and her family to live.

And that would probably be the direction I would go. It took us a long time to get there, but I think that's where I would move. But try to help her educate herself, get her total money makeover and put her on Dave Ramsey's plan, something like that to really help her start to exercise and build those money muscles that haven't existed.

Two follow-up questions. During the refi process and pulling some money out, would you pull out enough to settle out all the consumer debt or to try and take care of student loans as well? Well, I think you'd have to look at them independently. So the student loans are probably unlikely to settle.

So if she's paying them or she can just pick them up and renegotiate them and just pick them up, then I wouldn't mind her still having those and then just, but getting them current. The credit cards, if she hasn't been paying the credit cards, then she could probably go through the settlement process with those.

And so in such a process, she should have enough money to make them settlement offers. I would just try to do this very carefully so that they don't become aware of the money. And here's the problem. If her mom didn't have a trust, now it's going to be easily searchable that her estate, her mom's estate is going to be searchable.

Everything's going to be a matter of public probate record. And that puts her into some legal jeopardy. But I would start to negotiate with the credit card companies and find out what they'll take as settlements on the debt, and then just refi just a little bit and then use the proceeds from the refi to pay those off.

I guess the key is I want to keep as much money invested for her benefit as possible, keep as little money out of her hands immediately until she's six months from now when she's shown, "Hey, I've gotten better at managing money." In that case, let her have it all.

It doesn't matter. You can deal with that then. But she needs to have some time to show that she is learning how to manage money. And that's a skill that's not acquired overnight. Second follow-up on the current mortgage while the estate's still in probate and everything. She continues to just pay that low mortgage every month.

What's the, I guess this is all going to be specific, it's just completely my first rodeo here. What's a typical timeframe for probate? I don't know. You'll need to check the law in Washington and to see how this stuff is settled. Different states have, some states have a simplified process, especially for relatively insignificant estates.

Some states are more complicated, some states it costs more, some states it costs less. So she's going to need to study the Washington process and start to follow it. I would start with a good NOLO book, NOLO, the legal publishers. They I'm sure have a good book on being the executor of an estate.

So I would start with that and read that to get an idea of what she can do. And then I would, there's a lot of moving parts here. So I would stretch, if I were in her shoes, I would stretch it out as long as I could so that I could get everything else lined up with what am I going to do when the money becomes legally mine?

And I think that there are a number of ways, just by following the dates, you should be able to stretch that out for a while. Any tactical practical you can think of to minimize the amount of time between probate finishing and actually being able to do the refi and get the cash to settle the offers, the period in between where she'll have some cash and then all these outstanding debts and potentially judgment is the most nerve-wracking part of the process that I can think of.

Yeah. I don't know exactly how to do it because you've got, and this is not an easy situation that she's in, the stuff that I'm talking about, where we're trying to make sure that we don't unnecessarily expose money to the claims of creditors. We're trying to make sure that we settle the debts at discounts if possible.

And there's a lot of moving parts here. So this is not finance 101. I don't know how to answer that question other than to say, starts by gathering information, see what offers she has, start to study the Washington law a little bit. I have no clue about the Washington bankruptcy exemptions.

I mean, depending on how hardcore you want to be, I mean, there could be some things. If looking at the Washington bankruptcy exemption limit, they ignore annuity proceeds. So it might be worth it to put money into an annuity that should be protected from her creditors while also being useful to her in the future.

There are a number of different strategies and I couldn't go any further than that in a live format like this without all the details. >> Sure. What would be an appropriate local resource if we were going to get some professional advice? >> Look into a, start with maybe someone in the local consumer credit counseling advisor.

That would be good. I would talk with an attorney and in her case, I would talk, I guess a bankruptcy attorney would be reasonable and or would that be the best? I guess maybe a bankruptcy attorney would be a good place to start just because the area we're dealing in here is largely kind of facing creditors and there's a little bit of protection stuff.

It might also be worth talking to an estate attorney. I mean, the situation is simple, but an hour or two of local advice from a Washington expert would be well worth the few hundred bucks for her, in my opinion, to show how things could be done. That would be where I would start.

If I were there, I would start with speaking to a bankruptcy attorney to get an idea of how to protect her and understand a little bit of the asset protection laws of Washington state and then also possibly an estate attorney or a tax attorney who would be familiar with the estate settlement process and would be able to work with her on understanding that.

I doubt she needs to hire one. Well, she might need to, but if you're working with her, it's probably not necessary to hire one for more than just a little bit of consultation, but that's where I would go for professional advice. Your input and guidance is greatly appreciated. Hopefully it works out.

Keep in touch and let me know. And thank you for working to help her. I appreciate that you're getting involved and working with her. Obviously she's had many financial challenges and I hope that this can be a turning point in her life. A lot of times with single moms, when their children get older and they can make a turning point, she can have a very bright future and I hope that you can help her with that.

So a couple of takeaways from some of these things for the rest of us. Number one, if you have an estate, do estate planning. Think in advance because with what I understand from what Tom's description here, this lady's mom is just leaving her the money, just simply left her the estate.

And who knows if she was in testate or what, but she's just inheriting a piece of property. The problem with doing that is now you subject your piece of property to the claims of your beneficiaries creditors. And so that's a problem. So let's pretend that could be a problem on multiple levels.

This is, we're talking about a single mom. Let's say that she were in a fight with a divorce battle. Well, now all of a sudden, if the mom dies and passes the property along to her daughter, now that comes into the divorce proceedings. And now she might be fighting an ex-husband for this money.

It's also a problem, which is the obvious situation here with exposing the asset, the house to the daughter's creditors. And so this could be very, have been easily changed by the mother. If she had sat down, transferred the asset into an estate that, sorry, transferred the house into a trust, even if it was a testamentary trust that the transfer happens on her death and that testamentary trust could have spendthrift provision to protect it from the claims of her daughter's creditors.

So then she could continue to have that asset, but that asset wouldn't be exposed to the claims of creditors. That would have been the best solution. And that would have been the easiest solution for her mom to do. And it would have cost, I don't know, a thousand, a couple of thousand bucks just to retain an attorney, to write up a simple trust for that.

That would have been very simple and easy to do, but it would have been a lot easier than what the daughter is going into right now. So that would be just probably the biggest piece of advice for you and me is don't let parents die with property, leaving that property directly to their children, especially if their children have creditors.

That's a bad move. Also, then you have to think about what's the best disposition of the property and then try to keep it in the safest position. But I don't need to go on and on. Obviously, it's a tough situation. I guess the obvious other example, don't go to school for stupid degrees that don't earn you money and wind up deeply in debt.

This is stupid. Don't spend $5,000 plus on a degree that you wind up coming out the other end earning $35,000. You can earn $35,000 without even a high school diploma. So don't let people do stupid stuff like that because it just makes it more and more difficult down the road.

Enough yelling. Thank you all so much for listening. I appreciate it. Remember, if you'd like to join a Friday Q&A show like this, best way to do it is to become a patron of the show. You can do that at radicalpersonalfinance.com/patron. And if you're interested in more information on making sure that you protect yourself and things like this, number one, keep listening to the asset protection series that we're doing.

And then also think about taking a look at my credit card course, radicalpersonalfinance.com/creditcardcourse. Be back with you very soon. With Kroger Brand products from Ralph's, you can make all your favorite things this holiday season because Kroger Brand's proven quality products come at exceptionally low prices. And with a money back quality guarantee, every dish is sure to be a favorite.

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