November 3

Life Insurance and Motivated Sellers

It’s a little known fact that estates do not have to end up in probate. You may already know this, but the vast majority of Americans do not.

So how can someone avoid putting their heirs through the pains and struggles of probate? They need to be proactive and create a living trust before they pass.

The reality is that most people just don’t plan ahead. It reminds me of the old adage, “If you fail to plan, you plan to fail.” Although it’s sad people have to go through all of the trouble of probate, this procrastination just means job security for my Probate Fox community.

I read an article this week that shed some light on this lack of preparation. It noted that although 52% of Americans have life insurance coverage as of 2023, 41% of adults feel that their current coverage is insufficient. This suggests that a significant number of individuals are passing away without proper life insurance coverage or estate planning in place.

According to calculations, 48% of people who pass away each day do not leave behind any life insurance benefits, while an additional 21% do not leave enough coverage.

So what does this lack of life insurance have to do with probate? The most common reasons for having life insurance are to cover funeral and burial expenses and to pay off a mortgage. American Financing, a national mortgage banker, found that 44% of Americans between 60 and 70 years old have a mortgage when they retire, and up to 17% of those surveyed say they may never pay it off.

This situation puts heirs in a serious state of despair when bills start to pile up. This provides us with incredibly motivated sellers. But you can’t just show up with cash offers like everyone else. You need to be their problem solver first. And being their problem solver often leads to building friendships for life.

Take Elizabeth for example. She sold me a house she inherited from her father just about 10 years ago. So I was a little surprised when she called me out of the blue last week.

She was looking for advice on estate planning. She has an attorney helping her with the living trust, but she just felt more comfortable asking me for advice on a couple of important issues. She wanted to know what to do if she names her sibling as the beneficiary, and that person dies before her.

We went over a few suggestions of other people she trusts in her life. It’s been a full 10 years since I helped her with her inheritance that was going through probate. But she came to me and not her attorney for advice. Why? Because of the trust I earned helping her through a difficult time in her life.

The next question is how does that trust turn into dollars? Your satisfied sellers who trust you become an incredibly powerful referral machine. Think about it – these people trust you more than their own lawyer. When a friend or family member suddenly has to deal with the struggles of probate, who do you think they will tell them to talk to?

To your success,
Ernie “Helping the Unprepared” Vargas | The Probate Fox


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