Ep 018 - Navigating Estate Planning with HomeZada

Welcome to Be a Smarter Homeowner Podcast, where you'll discover strategies to save money, save time, and be better organized in managing your largest financial asset and biggest expense, your home. Your hosts, John Bodrozic and Beth Dodson, who are co-founders of HomeZada, have been supporting homeowners for over 20 years. They are here to share with you their tips and suggestions, as well as interviews with industry experts with the goal of helping you become a smarter homeowner. Now here's your hosts, John and Beth.

Hi, I'm Beth Dodson, co-founder of HomeZada, and with me is John Bedrosik, another co-founder of HomeZada, and we want to welcome you to Be a Smarter Homeowner Podcast. I love this. I love being a smarter homeowner. I just do. I always have. I think it's great. I try to do my best to do it. I'm not always perfect at it. I don't think you are either, John.

Absolutely.

We are always learning, right?

Whenever you buy your first home, you're on a journey of discovery. You don't know anything. And even the people who think that they're a smarter homeowner, they aren't quite as smart as they could be.

I know we learn every day. But one of the things we, we talked about is, um, On our podcast, we did this on the last one—is we talked about life events and differing life events get people in a place where they want to use HomeZada. But more importantly, they want to take a home inventory. They want to document either the structure of the home, the contents of the home. And before we go into the next life event that we're going to talk about, will you do us a favor and tell us a little bit more about? the way HomeZada can track items in a home. For instance, the difference between what we refer to as a fixed asset and a personal belonging.

Sure. Yeah. So this kind of maps to basically every home in America, right? It's sort of like when you're— if you're going to do a home inventory, we first start with the basic premise that everything inside the home and outside the home actually falls into 2 buckets. One is like a personal property possession. Those 2, the typical categories that you see of those possessions are furniture, artwork.

Lawn furniture.

Power tools, electronics, computers, clothing, you know, pots and pans, small appliances in the kitchen. Those tend to be things that are personal property. The other category of things in an inventory is what we refer to as a fixed asset of the house. And the fixed asset of the house, you can sort of think in terms of these categories. The built-in appliances, the things that stay with the house, right? The stove, the built-in refrigerator, the equipment. And equipment usually falls into like your HVAC equipment, your furnace, your hot water heater, your garage door openers. And your garage door springs. Those sort, and then there's like what I call fixtures and, you know, plumbing fixtures, your sinks, your faucets. Then there's what I call building materials, which is like your windows, your roof, your chimney, your siding. Those are sort of things that also need to be inventoried. And it kind of boils down into the 2 buckets of personal property tends to be things that move when somebody goes from house A to house B.

Mm-hmm. Mm-hmm.

The fixed assets, those things tend to need to get maintained. If you ever do a remodel, you replace the old with the new. And if the house ever sells, that's usually what potential buyers are interested in looking at. And how old are your appliances and how new is your HVAC unit? That kind of stuff. So that's kind of like the general hierarchy over how we think about a home inventory in any home in America and how we sort of built the Homes.com platform to attract both categories.

No, that's important. And so this then leads me into the next life event I want to talk about, which is we're on a journey in this life. But there's a common thread that we all don't physically stay in this life. And we move on and our bodies no longer are here. And our, for lack of a better word, our souls go somewhere else. And we are no longer physically present in this life. Lifetime. And some people refer to it as death, dying, etc. But I don't see— end of life. I don't see it as a negative thing. I just see it as another journey. That's just my personal opinion. Other people may disagree with me. But it does happen. And a lot of times, there's ways that you can use a home inventory to be prepared. And HomeZada has added some features about that. But One of the things that we've seen is how can you use an inventory to make sure your family members, after you've passed away, are one, not distributing the different items because they have no idea what you— what you wanted to go where and to whom and/or to what organization. And/or you can prevent the next generation from actually fighting about, no, I want this, no, I want this, no, I want that. And I know some people might say, well, I've moved on and I don't care what happens to everything, but using a home inventory, in my opinion, can also help people identify What they want to go where to prevent any of this kind of risk of infighting among family members, because nobody wants that. That's just not a good idea. But I did have a question in there and I just slipped my mind for a second. But we've added some features in HomeZada that allow us to identify which items, those possessions, That need to go to whom and to where. Will you explain a little bit more about that, John?

Sure. Yeah, I guess I've heard a lot from both customers doing their own sort of inventory estate planning. Well, you— I'm sure you're going to bring in other people who are doing estate plans for people, like estate planning attorneys and organizers and whatnot. But at the end of the day, what I've heard, a common thread is, let's face it, many people are not prepared with their sort of estate. on the big picture stuff like, you know, what am I going to do with my person and all these sort of like aspects of life? People don't think of a home inventory as part of an estate plan 'cause it kind of goes back to the, most people think about, you know, financial assets being investment portfolios, stock and bonds and cash and whatever.

Physical structure of the house.

Right, physical structure of the house. They tend to forget, like you've said to me many times before about this, sometimes the value of all the personal property in your house is more than what's Currently in some sort of cash account kind of mentality? And how is the personal property going to get divvied up as part of that estate plan? And that's usually where I guess the trigger of this particular event is twofold. And it becomes to the proactive people and the reactive people.

Correct.

There's the proactive people who realize, you know what, my estate planning attorney or somebody is saying, hey, take a home inventory and document how you want these items to distribute to your various heirs.

Mm-hmm.

And then there's the flip side of that is somebody may have unfortunately passed away and now somebody has been appointed the—

Executor.

The executor of the will. And they're having to go back and inventory something for the entire family because it was not done prior. And so there's these sort of 2 use case scenarios that are most common. But to go back to your original question, which is, Yeah, when you, when you take an inventory inside of Homesata, there's essentially identifying the name of the object, and you can upload as many photos as you want of those particular objects. So you can take a, you know, close-up photo or, you know, whatnot. You can estimate the value of those items. There's even a document management feature where you can upload documents. The reason why this is important for some people is Some items in your home actually have an appraisal.

Mm-hmm.

Right? So this is for the items in your home that may be of high value. You've got some jewelry, you've got some sports memorabilia, you actually have certificates of appraisal and this, that, and the other. Part of the inventory is documenting the item itself and then having the attachments of the appraisal. But you're absolutely correct at the end of the day, and this is an enhancement that we made a number of years ago, which was, okay, I've documented these things, Now I'm— the person is essentially choosing who's going to get this particular asset at end of life. Is it going to be, you know, my spouse? Is it going to be my brother, my sister, my kids, my grandkids?

Or some organization.

Or yeah, absolutely. Because there's a lot of people that are very charitable in their giving as it relates to estate planning. But it's not just one charity. It's this item goes to charity 1, this item goes to charity 2. And the most important part is if you think about Doing an inventory of all the things inside your home and then assigning it to each one of these different heirs, the ability to produce a PDF report that groups heir number 1 is going to get these 6 items, heir number 2 is going to get these 12 items, charity number 1 is going to get these 20 items.

Right.

And the summarization of the value of what they're actually getting is a hugely important aspect of doing an estate plan.

Yeah. In fact, we have a friend who's an estate attorney and she says if she can get her clients to do this, she would be ahead of the curve prior to their death, by the way. If she can get them to do this prior to their death, she would be ahead of the curve as it relates to their estate planning. And it's, I think she refers to it, and forgive me if I don't get this correct, but it's a personal property contents document. And you, your trust and your will will ask for this, but nobody ever does it. And she's like, this would make my life so much easier. She's like, you'd be surprised at how much infighting you get, how people become so attached to something. And then all of a sudden, if one person becomes attached, then all of a sudden everyone else became attached to that same item, because there was no There's an emotional connection and they're grieving, which is also very challenging for the next generation or the next of kin. When you leave this to someone else to do, they're just, they needed opportunity to grieve. And all of a sudden you're not giving them that opportunity. And there's all this mayhem, for lack of a better word. And our friend, Tracy, who actually shared this information with us, she literally said, It gets crazy. And why would you want your family to be in a position where they're fighting after your death because they need to grieve rather than being proactive and submitting to me your information and how you want distributed? And even if you don't want to go through like the housewares or what have you, but maybe you have valuables like jewelry, art, or You know, sports memorabilia or something that has significant appraisal appraised value. At least put those on a sheet or a correct an inventory and submit it to me. And a lot of times, you know, for instance, I know people and some of our customers who have literally just documented their jewelry. They just documented their jewelry, and they wanted to go to certain. individuals within their family, and they documented it and submitted it to their estate attorney. And it makes estate attorneys' lives happier. And they've said it. They're like, yeah, it gives us a little bit more work to do, but in the end, when we have to process this after the fact, after you've passed away, it becomes much easier because it's a legally binding document. And just so that everybody knows, this is the one thing I like to make very clear on this call. If you identify all your items in HomeZada and you print that PDF, it is not a legally binding document. I want you to be aware of that. It is a tool for you to use, but you need to print that. And by the way, when I say print, I mean you can submit an electronic PDF. You don't have to print paper 'cause it may be long. You can submit that PDF to your state attorney and they can then attach it and bind it to make it a legally binding document.

Okay.

So just to be very clear, that's a big, big caveat I want to bring up. The HomeZada account is not legally binding until it has touched an attorney and they do what they need to do to bless it and to make it legally binding. But it is a guide and a tool to get you to that place.

Yeah, absolutely. And it goes back to my knowledge of either me personally doing this with my own family members and/or hearing from customers, right? It all depends on how the estate is ultimately written. Like, what if, let's just take a basic scenario, right? Somebody owns a 3,000-square-foot home, has a bunch of stuff, has some, you know, cash, stocks, and bonds, but they have 5 different heirs between kids and grandkids or whatever, right? And they're basically, their estate is written in such a way that it's just a percentage. Percentages are going to sort of different heirs.

Mm-hmm.

Well, then valuing—

Totally.

The personal contents is important because it's easy to go look at what's the current balance on the savings account and what's the current balance on the stocks and bonds investment portfolio. It's very difficult because nobody really has a, what's the current value of my inventory? Because the value of that inventory now needs to get added up with all this other stuff on how it gets split. The flip side of that is valuing the inventory is important, but sometimes I've heard from people is there's the emotional value of things—

Totally.

That actually don't have a lot of financial value, right? It's the, you know, my grandfather passed away and he was a musician and he taught me how to play guitar with this guitar. The guitar itself may not be worth a lot of money. It's a 20-year-old guitar, basic 6-string, whatever. but you may have had 2 or 3 grandkids that the grandfather taught them how to play the guitar, right? Then there's that sort of, and if nobody documents that, that's when sort of the heirs can, oftentimes we hear these horror stories, can start to have these arguments over these things. And so being that proactive person that sort of identifies which heir is going to get even the things that aren't high value, monetarily, but are high value emotionally for different sort of relationships that people had with the deceased becomes a hugely important aspect.

Yeah. And that brings up a good point. If you do have these emotionally tied items, the last thing you want to do, usually these emotionally tied items bring families together. The last time you want to do, the last thing you want to do is allow this item to break families apart.

Yes.

And it can easily be done. I've seen it happen in my own family as well. I mean, it's something so simple and you're like, it doesn't have to be that way.

Correct.

And so that's where Homesauta or producing any kind of home inventory can come into play. And one of the things that we've seen is a lot of people don't feel comfortable doing a home inventory if they're focused on estate planning because maybe they're older, Maybe they just don't feel like doing it. Maybe as being older, they either fear death and get upset about death, or they would rather do other things with their time because they know it's limited. It's even more limited at a period of time at that aspect in the physical world. So how— my point to that is, how else would they get this done? They can actually hire people. Yep. To get this done. And we know a lot of people in the organizing world, the home inventory professionals world, and even estate attorneys are hiring these 2 groups of individuals, these 2 groups of individuals in these industries, professional organizing and home inventory, to do this on their behalf, to help their clients.

Absolutely. We get all kinds of these kinds of stories that, again, volunteered stories that people share with us, which is Some people are doing their own home inventory, but a lot of people are hiring somebody else to do the inventory for them. So part of what Homesada in terms of a software platform had to do was essentially create 2 different types of accounts. So if a consumer wants to create their own home inventory, they would sign up for the homeowner account, do your own home inventory, create your estate plan, assign it to your heirs. But then we have a professional account, which is for people that are in the business of creating inventories for other people, right? So you may have, like Beth said, we've got professional organizers that are hired on a one-by-one basis. You know, organizer lives in, you know, pick a city in America.

Nashville.

Nashville, St. Louis, whatever, right? And somebody has hired them to do a home inventory. Well, they go into HomeZada Professional and they create, you know, the address and they're the ones physically being paid to go into somebody's house, document all the inventory, but then put that inside of HomeZada and then present it to the end customer so that they can make the decisions over which area is going to get them. The reason why that's important is that professional organizing company, they might have 10 clients at the same time. So they need the efficiency of having one login to navigate to 10 different clients' houses. But it's gotta be a security model where the security around the data around one property for client A isn't mixed with, you know, the data for client B.

Yeah.

Because not only is it the inventory professional can create the property, there's actually 2 other feature sets that are both widely used. One is the professional The inventory professional, at the end of their engagement, they can digitally transfer the entire inventory that they created. So now the end customer has their own copy digitally and the professional organizer has their copy for historical purposes.

Yeah, and that is a huge benefit using HomeZada Professional.

Correct. And then the second area is during the course of creating an inventory, again, because a lot of times, You've got, you know, the trustee or the executor trying to create an inventory of a large estate. Doing that might take 30 to 60 days just because there's so much to inventory. You can actually share a property with others who are actually onsite inside the house. And candidly, this is also another, maybe you could get into this a little bit. A lot of these people with Homesada, they can share the inventory digitally with heirs that may not physically live in the same city as where the house is located. Yes.

Yeah, we've had many customers do that.

Right, so the house may be in Nashville, but one kid's in LA, another grandkid's in Florida, whatever, you know, all over the place. And they're basically using the tool so that they all can log in and see the state of where the inventory is and see what are— what is being sort of allocated to which heir. And candidly, I've seen somewhere because the The person who passed away did not determine who they were gonna get. I've had estate planning attorneys have like 3 heirs all log in after the inventory was done because they wanted their opinion over which heir was really emotionally attached to which item.

Exactly.

So it was like a request process of, I want this. Wasn't the final decision, but it was a requesting process. And they're using that even in our home's audit tool, which was an amazing story that I heard.

I've heard that many times because it's the same thing. And I've heard that the, the, let's say, adult kids will start this process as well, because everyone is in different locations. And they are emotionally attracted to some of the items in the, in the property, but they can't physically be there on a regular basis. And it also kind of takes a bit of the in-person riskiness out of the element and saying, literally, it's just a tool that allows me to place my request. And I really love this for this reason, because in that feature set that we have, you can write notes. So you can offer your story of why this is important to you in your request. In fact, if you are proactively doing this, you can offer up notes in that feature set to say why you wanted to go to such and such organization and one of the— or person. And one of the things I can see is, for instance, someone may be an avid art collector. I remember one of our neighbors, they were an avid art collector and it was— art was all over their walls and they had a big house and it was just on every inch of the walls and they didn't have any children. So they wanted to leave certain things in their house to their nieces and nephews, but the art they wanted to leave to an art museum and let the art museum choose to do what they want with it, because the art museum would put it on display, would allow other people to see it, would pass it around as exhibits for other locations. I mean, this is really important. And so it allowed The person who was distributing everything to also explain why that was important to them to leave it to someone. So I think those feature sets are really good. And using a professional can make your life so much easier, especially if it wasn't done beforehand. You're trying to grieve the person that you lost. And I think hiring a professional who may not have known the person at all, Keeps it more, what's the word? Objective. Keeps it more objective because they really, forgive the phrase, they have no dog in the hunt who gets what.

Right. Yeah.

And for anybody who doesn't know what that means, it means they don't really care who gets what. They're being paid to do a job to get the items documented carefully into the system, and then they can go about Working with the appropriate teams, whether it's adult children, whether it's estate attorneys. We see a lot of estate attorneys hiring inventory professionals and professional organizers to do this on their behalf, on behalf of the customer, both before and after someone's deceased. We've also seen one customer, which I thought was so cool. They hired a professional organizer to create this inventory. In this one property, and the— based on some data that was going on, the estate attorney solved a crime because this person apparently was a very popular artist, and the previous either individuals involved, whether it was the previous attorneys, whether it was the previous children, whatever the case may be, I don't know all the details. But someone had removed these famous paintings without consulting the whole group. And this is what can happen if you are not prepared. And I believe they found out who— all this stuff was missing and they found out who did it with the help of HOMSADA, by the way. So I'm really excited that HOMSADA solved a crime. It's kind of fun.

Yeah, I chuckle. Obviously it's not a laughing matter because it's a pretty serious issue. But yeah, absolutely. It's sort of like if you document these things, you know, either proactively prior to an end of life or even in a post, you know, the executor is doing it. And then you have multiple people physically going in and out of the space. At least you've got it documented that, yeah, the painting was there on that day, you know, as of now. And now all of a sudden the painting isn't there and you can sort of retrace the steps that of who may have done some things that they shouldn't have done. 2 other things that I thought of in terms of the value of sort of the inventory here on the estate planning and going back to the personal property. Sometimes the personal property gets distributed to heirs. Sometimes it just gets sold as part of an estate sale, right? Because maybe there's a bunch of stuff, you know, if you aggregated all the stuff that was in your house, you'd be like, okay, these are sentimental items. They go here, here, here. These are the high-value items. Maybe the rest of the stuff nobody really wants. So let's just try and convert it to whatever cash we can. Let's sell the pots and pans and the furniture and this, that, and the other because nobody's very interested in it. The other thing that we get often, which is a huge, huge thing, people tend to forget we live in a society where, I don't know what the percentage is, but my guess is it's pretty high. They own a storage unit or lease a storage unit somewhere.

Oh yes, I forgot. Yes.

So the house isn't big enough to store all the things that you've accumulated. And so you've got a storage unit somewhere else that you're leasing and taking an inventory of what's inside the storage unit. And sometimes people have more than one storage unit, right? Because some people have like a big storage unit where they've got the ski boat and the jet skis and sort of the—

That's a whole nother podcast.

Outdoor toys or the bass fishing boat, right? Other people have a small storage closet where, yeah, I didn't really want my expensive artwork in my house 'cause my kids were around and they were throwing house parties and this, that, and the other. So I put it in storage. You know, it's the whole TV show Storage Wars, right? People go in and like, what's the value of what's all in there?

Totally.

HomeZada allows you to create a property, but very flexible. You could either create a separate property for The, uh, the concept of, yeah, of the, uh, um, storage unit. The storage unit. Or you can just create a separate space in Homes Auto. Yeah. So like your main house has got a living room, dining room, garage, this, that, and the other, and you just put storage unit 1, and then you itemize all those value— all the items in storage unit 1.

I forgot about storage units. But that's real. That's real. And there's some valuable items. In storage units. Valuable, valuable items. Totally forgot about this.

Yes.

Totally forgot. But yeah, I mean, so when it comes to estate planning, you know, being organized, being, um, forward-thinking, if you can get in front of it, makes everything on the back end a little easier for everyone else who's trying to grieve. And I think part of me is like, that's also partially responsible. As a human on this earth, that we get to do that. And we have tools that we can do that in order to help the people on the other side. And then I also believe that as it relates to some of the value proposition is when people can document all of this, then, and they do it beforehand, they might actually reach out to their living relatives and kin and say, do you really want this stuff? And they can have a more forward-thinking conversation so as not to hurt someone's feelings if they really had something in mind that they wanted. Going back to your example of that guitar, 3 grandkids may have learned to play guitar with that grandfather, but only one really wants it.

Correct.

But may not have told anybody. And this gives people the opportunity to have those discussions. And maybe because you don't want it to be given to another grandchild who didn't really want it, and they just end up ditching it and dropping it off at the Goodwill. That wouldn't be a good idea. Correct. I mean, so I think it opens up communication in a really kind and sincere way. And I just think that getting an estate plan together beforehand is just Overall kind for everybody else. Is there anything else you have to add before we close out this podcast?

I do. I have one other thing. Most people, most of the people, when they do an inventory for estate planning, they're taking pictures of both the rooms, broad, like living room, dining room, garage, as well as all the individual items that are important to them, because you can itemize all those things. But one thing that one person told me once is that HomeZada also has the ability to take an inventory at a room level where you have a video recording. So if you are the proactive person and you're doing the video recording, right, you may walk into your music room where you've got that guitar. You could say, I really want this guitar to go to, you know, Susie, my grandkid. And it's the person—

And you can say it during the recording.

Right. And it's the person's voice that you get to hear. So there's that sentimental value of the person that may end up being passing away, that you're basically— that voice recording of— and obviously you could turn the camera around and get that person's face on it as well. There's that sort of almost like the emotional way of handing something off to somebody.

Yeah.

Because yeah, most people are looking at an Excel spreadsheet or PDF and go, yeah, this is going here. But you could actually tie those things together because the system allows you to have as many videos as you want per space. So you could create 2 or 3 videos of like walking through each room. This is the stuff that's going to this person. This is the stuff that's going to that person. And the video becomes personalized.

Oh yeah, that's sweet. That's super, super sweet. That's like a memento in and of itself.

Correct.

You know, that's wonderful. No, I haven't heard that before with some of our clients. I'm glad you did. So, um, we just want to thank you for being here with us, uh, as we discover more life events on, um, how these areas of home inventory and, and HomeZada can play a role in your life. And we want to thank you for joining us on this episode of Be a Smarter Homeowner podcast, and we hope you tune in to the next one. And at the same time, if you like this, please rate us, please share this with your friends, family, colleagues, anyone you think who could use this. We really appreciate it. And by all means, stay connected to us at homezada.com. H-O-M-E-Z-A-D-A. And also Be a Smarter Homeowner Podcast, and also on any of the other platforms that are managing all of these podcasts. We thank you so much again, and we invite you to see— and we hope to see you in the next one.

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