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Planning with a second marriage · The Legal Exchange

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Speaker 1: This is the Legal Exchange with Todd Lutsky from the
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Speaker 1: law firm of Cushing and Dolan and Susan Powers of
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Speaker 1: the Armstrong Advisory Group. Each week, Todd and Susan will
0:10
Speaker 1: discuss many topics, including estate planning, how to avoid probate,
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Speaker 1: and protecting your money from a nursing home. If you
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Speaker 1: need assistance in any of these areas, or have a
0:18
Speaker 1: question about another issue that may affect your future, call
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Speaker 1: eight six six eight four eight five six ninety nine
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Speaker 1: to make an appointment. That's eight sixty six eight four
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Speaker 1: eight five six ninety nine. Operators are standing by. Now
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Speaker 1: Here are your hosts, Tod Lutsky and Susan Powers.
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Speaker 2: Welcome into the Legal Exchange with Todd Lutsky. I'm Susan
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Speaker 2: Powers of Financial Advice with the Armstrong Advisory Group and
0:43
Speaker 2: I'm joined by Todd Lutsky, a partner with the law
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Speaker 2: firm of Cushing and Dolan with a master's in taxation.
0:50
Speaker 2: Welcome Todd. How are you today?
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Speaker 3: I am never better on this beginning of the month.
0:55
Speaker 3: How are you?
0:55
Speaker 2: I can't even believe it's here.
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Speaker 3: It's good, good, great?
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Speaker 2: What do you have for us?
1:00
Speaker 3: Counting down to the holidays. A couple of cases, actually
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Speaker 3: a North Dakota appellate court case. You know, when is
1:10
Speaker 3: it enough effort to change a designated beneficiary and a
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Speaker 3: life insurance policy? Did you do enough to actually change it?
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Speaker 3: Whether or not the policy actually got delivered to the
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Speaker 3: insurance company. If there's two claims, one person thinks they're
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Speaker 3: the beneficiary, another person thinks they're the beneficiary. Of course,
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Speaker 3: we're going to get to the bottom of this. But
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Speaker 3: there's a lot more going on here behind the scenes
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Speaker 3: than just this, right, folks, this is a second marriage
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Speaker 3: involved with a doctor, kid juicy star, and you know
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Speaker 3: who should be getting what? And boy, you can see
1:44
Speaker 3: how if you don't plan, there's problems. Never mind that
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Speaker 3: there's going to be tax issues that could have been
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Speaker 3: helped here, So we'll get back to that. Then we
1:53
Speaker 3: head over to Oregon and we have an appellate court
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Speaker 3: case there that says are you married or is the
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Speaker 3: divorce final? When can you remarry if you think the
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Speaker 3: divorce is final and it's not final, Oh, boy, is
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Speaker 3: the new marriage void or not? And so there's some
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Speaker 3: things to think about here. But again, when you're getting
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Speaker 3: into second marriages and remarriages, we have a lot to
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Speaker 3: learn about planning and what to do today. Yeah, these
2:25
Speaker 3: are going to be very interesting, I think, but it
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Speaker 3: brings us back to this whole idea of Yeah, planning
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Speaker 3: is important making sure your assets go where you want
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Speaker 3: them to go, especially in all these marriage situations. But folks,
2:39
Speaker 3: the new guide for the month is, you know, a
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Speaker 3: tale of two objectives. There's many objectives when you do
2:44
Speaker 3: your planning, but this one is a tale of two
2:46
Speaker 3: objectives reducing your estate tax and providing asset protection at
2:51
Speaker 3: the same time. So people who want to just reduce
2:54
Speaker 3: the state taxes, this guide's for you. It explains the
2:56
Speaker 3: tax rules, that gives you an example as to how
2:59
Speaker 3: to calculate your state tax. It explains how the revocable
3:03
Speaker 3: trust work to do. That explains portability. Wonderful. And for
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Speaker 3: all of you folks who say, well, you know, I
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Speaker 3: have no federal tax to worry about, but I'm worried
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Speaker 3: about mass tax. But I don't have a ton of assets.
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Speaker 3: Maybe I'm somewhere under four million, and I want to
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Speaker 3: protect them from the nursing home as well. Can I
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Speaker 3: do both? This guide give you a whole separate set
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Speaker 3: of examples as to how to use an irrevocable trust
3:26
Speaker 3: and draft it to provide the tax savings and the
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Speaker 3: nursing home protection at the same time.
3:33
Speaker 2: One stops shopping.
3:34
Speaker 3: It's not always so easy, boat, folks, but this guide
3:36
Speaker 3: is packed with information. Get it beginning of the month.
3:39
Speaker 3: It's the New Guide eight six six eight four eight
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Speaker 3: five six nine nine or Legal Exchange Show dot com
3:46
Speaker 3: again eight six six eight four eight five six nine
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Speaker 3: nine or Legal Exchange Show dot Com. Let's hit this
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Speaker 3: one in where we going life insurance? We're going to
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Speaker 3: go to NORTHDA. So Lambrose is the insured on a
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Speaker 3: banner life insurance policy worth six hundred and fifty thousand
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Speaker 3: dollars on June one, listen to these dates. June one,
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Speaker 3: twenty twenty, he contacts James Whedell and asked him to
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Speaker 3: prepare a letter to change the designated beneficiary on the
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Speaker 3: life insurance policy. Provides banner with the name, the address,
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Speaker 3: the social security number. Asked to put signature lines, two
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Speaker 3: witness lines, a notary line on the letter. James then
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Speaker 3: was instructed by Lambrose to bring the letter to a
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Speaker 3: restaurant where he wants to sign everything and on June sixth.
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Speaker 3: Five days later, he signs everything in front of the
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Speaker 3: witnesses the notary. All done. James mails it to Banner
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Speaker 3: Life Insurance Well on nine to eleven, twenty twenty. This
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Speaker 3: is only three months later. Three months later, he dies
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Speaker 3: well on November twenty twenty, an attorney for John, the
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Speaker 3: adopted son, things heat up and Betty his mother ex
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Speaker 3: wife of Lambrose. They send a letter to Banner with
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Speaker 3: a copy of the letter showing the change of designated beneficiaries,
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Speaker 3: requesting they send them the money. Banner says, well, the
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Speaker 3: change of beneficiary letter was not received prior to the
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Speaker 3: death of Lambrose. I remember that was sent on June sixth.
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Speaker 3: How in three months did they not get it? I
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Speaker 3: don't get that. So anyways, that's what they said. They said, We, however,
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Speaker 3: you can file this claim form and we'll go from there. Well,
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Speaker 3: February twenty twenty one, time keeps moving. Banner got a
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Speaker 3: letter from an attorney who's representing Eugena Lambrose's sister claiming no, no,
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Speaker 3: I'm entitled to the life insurance. Well, the insurance company
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Speaker 3: just files an interpleater claim and says I'm going to
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Speaker 3: let the court decide who gets this money. So the
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Speaker 3: probate and the appellate court both ruled saying, you know,
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Speaker 3: did the decendent take sufficient steps to change the designated beneficiary?
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Speaker 3: That means, was there a clear intention of the insured's
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Speaker 3: wish to do this? Did they make a concrete attempt
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Speaker 3: to change the beneficiary? Here? He clearly did that. He
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Speaker 3: did everything needed to be done. The letter, the signature,
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Speaker 3: the notary witnesses mailed it pre postage paid. So they said,
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Speaker 3: you know what, we think he did all he needed
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Speaker 3: to do to change the beneficiaries, which means that in
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Speaker 3: this case, I guess it would be the ex wife
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Speaker 3: and the daughter, the adopted daughter are the beneficiaries and
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Speaker 3: Eugena is out. You know, I think that's probably true.
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Speaker 3: I think at the end of the day, you know,
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Speaker 3: this adopted daughter piece probably was what he was trying
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Speaker 3: to do. I don't know if the ex wife was
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Speaker 3: also involved. I think the ex wife was probably helping
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Speaker 3: her daughter, right, you know who he adopted to get
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Speaker 3: the benefits of this life insurance policy. Folks, I just
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Speaker 3: want to spend a few minutes with life insurance because well,
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Speaker 3: first of all, just obviously let's reiterate what we can
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Speaker 3: learn from this. The tricky part of this is whenever
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Speaker 3: you have a second marriage, in this case, second marriage,
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Speaker 3: even though they got I don't know if they were
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Speaker 3: divorced or not. Doesn't it doesn't sound like I guess
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Speaker 3: that's his ex wife. So I guess they were divorced.
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Speaker 2: But it's still his child. He adopted her.
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Speaker 3: Yeah, it's still his child. I mean, whenever you have events,
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Speaker 3: please make sure you change your designated beneficiaries on everything. Right, marriage,
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Speaker 3: if it breaks up, if you remarry, if you have
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Speaker 3: a spouse that dies, all these events change life insurance
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Speaker 3: four oh one k I r A annuities, adjust the
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Speaker 3: joint owners on bank accounts and brokerage accounts. All that
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Speaker 3: update your entire estate plan wills. Make sure you do
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Speaker 3: what you need to do to fix it now. Life
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Speaker 3: insurance by itself is a tricky asset, right, You don't
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Speaker 3: think about it all the time, but it actually you know,
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Speaker 3: depending on how large it is, it could make your
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Speaker 3: estate taxable. So dying, owning a life insurance policy to
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Speaker 3: begin with in your own name might not be the
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Speaker 3: way to go. We've got to think about taxes. That's
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Speaker 3: what This guide is also all about right, it's not
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Speaker 3: just a family, but how do we get the assets
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Speaker 3: to the family efficiently, not just protected from creditors but taxes? Ye,
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Speaker 3: how do we do that? And life insurance could cause
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Speaker 3: your estate to be taxable if it's large enough, at
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Speaker 3: least state death tax, even if it's not federal, because
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Speaker 3: a lot.
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Speaker 2: Of people think life insurance is tax free todd.
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Speaker 3: All the time, right, Remember it's income tax free, yes,
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Speaker 3: but it's estate taxable, right, So think about putting this
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Speaker 3: owner ownership and designated beneficiary on these policies if they're
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Speaker 3: large enough to justify it into an irrevocable life insurance trust.
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Speaker 3: We don't talk about them a lot, but I think
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Speaker 3: it needs to be addressed here. How large I'd say,
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Speaker 3: if it's large enough to impact your state of state
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Speaker 3: tax Okay, So if you feel like this is throwing
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Speaker 3: you into a a state tax world at the state
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Speaker 3: level and you want to reduce the taxes, get it
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Speaker 3: out right, and who knows what's going to happen federally
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Speaker 3: going forward. So always remember to think about these irrevocable
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Speaker 3: life insurance trusts, but be careful if you transfer it
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Speaker 3: within three years of death. It's included if you're thinking
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Speaker 3: about that's an existing policy. If you're thinking about buying
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Speaker 3: a policy and you think it's going to affect maybe
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Speaker 3: have it bought in your trust from in the irrevocable
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Speaker 3: trust from the get go and avoid this three year problem. Right,
9:55
Speaker 3: very important, and of course it's even more tricky with
9:58
Speaker 3: medicaid planning. But folks, this is about causing estate tax issues.
10:02
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10:07
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10:10
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Speaker 3: Two Objectives eight six six eight four eight five six
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10:20
Speaker 2: You've been listening to Todd Letski, a partner with the
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Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
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Speaker 2: financial advisor with the Armstrong Advisory Group. We've got much
10:30
Speaker 2: more to come when we return to the Legal Exchange
10:33
Speaker 2: with Todd Letsky.
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Speaker 1: You're listening to the Legal Exchange with Todd Lutsky, an
14:10
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Speaker 1: Eight sixty six eight four eight five six ninety nine.
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Speaker 1: That's eight sixty six eight four eight five six ninety nine.
14:23
Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
14:26
Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
14:30
Speaker 2: and I'm joined by Todd Lutsky, a partner with the
14:32
Speaker 2: law firm of Cushing and Dolan with a master's in taxation.
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Speaker 2: What do you have? You got some people getting married
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Speaker 2: when they're already married, it sounds like, yeah.
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Speaker 3: So folks, marriage is always We just mentioned it in
14:44
Speaker 3: the last segment. Right, could be an event that you
14:45
Speaker 3: need to reconsider your estate plan, Well, certainly will be
14:49
Speaker 3: an event. Yes, consider good point. So in this case,
14:53
Speaker 3: we're headed over to Oregon. We have an appellate court
14:56
Speaker 3: case there, and here we have Mike and Yan who
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Speaker 3: got married and nineteen ninety four and I had one
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Speaker 3: daughter together, Tina jan On January rather of twenty fifteen,
15:08
Speaker 3: a court issued so that's a long time later, a
15:11
Speaker 3: court issued a judgment dissolving the marriage. Okay, January twenty fifteen. Well,
15:17
Speaker 3: in April of twenty fifteen, Mike remarried to Grace. Wonder
15:21
Speaker 3: how that happened so quickly. Not even four months later,
15:25
Speaker 3: he's remarried to Grace. And in October of twenty sixteen,
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Speaker 3: the court granted relief to Yan from the first judgment
15:34
Speaker 3: dissolving the marriage because it was the term that was
15:36
Speaker 3: not obtained by means. It was obtained by means of
15:39
Speaker 3: fraud and misrepresentation. So that judgment got dissolved. Then a
15:46
Speaker 3: year later, in October of twenty seventeen, a new judgment
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Speaker 3: dissolving the marriage was issued making the divorce effect of
15:53
Speaker 3: October twenty seventeen. Well, in October of twenty twenty one,
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Speaker 3: Mike died without even ever having a will and without
16:03
Speaker 3: effectively remarrying Grace.
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Speaker 2: Did he tell Grace that they weren't really? Really did?
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Speaker 2: She probably didn't even know any of these shenanigans were
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Speaker 2: going on.
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Speaker 3: Who knows, it's not in here, so that's an issue.
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Speaker 2: Huh.
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Speaker 3: Well, Grace decided to petition the court to be appointed
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Speaker 3: personal representative and as the surviving spouse, right, and the
16:25
Speaker 3: court entered entered a limited appointment made sense. Tina, the daughter,
16:31
Speaker 3: filed to remove Grace as personal representative because she is
16:36
Speaker 3: not really the surviving spouse and thus not an heir
16:39
Speaker 3: at law under the will at all. Well, there was
16:42
Speaker 3: no will, he died without a will. She argued that
16:45
Speaker 3: since the first marriage was not legally dissolved till the
16:50
Speaker 3: second marriage or till twenty seventeen, that makes the first
16:56
Speaker 3: marriage in twenty fifteen a bigamous marriage or our face
17:00
Speaker 3: return void abinetio, as it never existed. The court ruled
17:04
Speaker 3: in favor of Tina. He said, yeah, that's that's right. Well,
17:08
Speaker 3: as you might imagine, Grace decided to appeal because she's
17:12
Speaker 3: the supposed wife here, and according to the court, they say, well,
17:19
Speaker 3: Tina had a burden a duty to rebut the presumption
17:26
Speaker 3: that they are married, because they did get married. So
17:30
Speaker 3: there's a presumption of marriage and Tina would have to
17:33
Speaker 3: rebut that presumption. Now, there's several steps that you have
17:37
Speaker 3: to prove to take it through this, but the toughest
17:39
Speaker 3: one of all, let's just focus on that. Really, the
17:41
Speaker 3: impossible task for Tina in rebutting this would be to
17:46
Speaker 3: show that neither Michael or Yan were ever married before
17:51
Speaker 3: nineteen ninety four and not legally divorced. Wow, that's that's
17:59
Speaker 3: a pretty standard which she could not do. So this
18:03
Speaker 3: marriage in twenty fifty twenty fifteen was deemed valid and
18:07
Speaker 3: they acted in the way that they thought they were married.
18:11
Speaker 3: They act that they showed that they got married. Yep,
18:13
Speaker 3: you know, but for this unforeseen event. Sorry, Tina's out
18:19
Speaker 3: grace is in. I don't know where we're going to
18:24
Speaker 3: go with this. Yeah, it sounds to me like again
18:26
Speaker 3: a whole lack of planning, although this is some sort
18:30
Speaker 3: of an unseen event. But folks, I want to spend
18:33
Speaker 3: a minute to help you folks. Obviously, I don't know
18:35
Speaker 3: what's going to be involved in their tax world here,
18:38
Speaker 3: but in your tax world, a lot of us today,
18:41
Speaker 3: depending on the size of our state and knowing that
18:44
Speaker 3: the exemption federally is pretty high, still have a tale
18:47
Speaker 3: of two objectives. We want to pay death taxes and
18:51
Speaker 3: we might want to protect our assets from the nursing home.
18:53
Speaker 3: This guide is a tale of two objectives. It will
18:56
Speaker 3: help you if you only want to do a state
18:58
Speaker 3: tax planning and you're not worried about nursing home planning.
19:01
Speaker 3: It's got revocable trusts, examples, how the tax works, how
19:06
Speaker 3: to calculate your tax, how the trusts operate to do
19:09
Speaker 3: all this perfect. But if you want to do both
19:13
Speaker 3: reduce the death tax in the state and protect assets
19:16
Speaker 3: from the nursing home, can the trust be designed to
19:20
Speaker 3: do both? Yes, they can. Get the guide. There's a
19:23
Speaker 3: whole nother section in the guide that explains how the
19:26
Speaker 3: irrevocable trust operates, how it works to reduce estate taxes,
19:31
Speaker 3: gives you an example, and of course, how it protects
19:34
Speaker 3: from the nursing home. Learn how to do both of
19:37
Speaker 3: these things. Get the guide eight six six eight four
19:40
Speaker 3: eight five six nine nine, or go to our website
19:44
Speaker 3: Legal exchange show dot com. You can download a dale
19:47
Speaker 3: a tale of two objectives reducing estate taxes and in
19:51
Speaker 3: protecting your assets eight six six eight four eight five
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Speaker 3: six nine nine or Legal exchange show dot com.
19:59
Speaker 2: So, if I'm Grace, you're grace, okay, and my husband
20:02
Speaker 2: fesses up and says, hey, uh oh, look the divorce
20:08
Speaker 2: wasn't legitimate.
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Speaker 3: Which he probably should have done. I'm clearly the one.
20:11
Speaker 2: My first question is going to be are we still married?
20:14
Speaker 2: And if there's any question, get that divorce finalized, and
20:18
Speaker 2: then we're getting remarried.
20:20
Speaker 5: I bid.
20:20
Speaker 3: He didn't tell her yeah, because it they made a
20:23
Speaker 3: point to say he did not remarry right after the judgment.
20:27
Speaker 2: He so didn't tell her. He was scared, so.
20:29
Speaker 3: He should have told her, you're right. And if you
20:32
Speaker 3: told her you're right, the natural response of the spouse would.
20:35
Speaker 2: Be, let's take a question, are we not married?
20:38
Speaker 3: Let's fix it. Yeah, so maybe they're not remarrying was
20:42
Speaker 3: a problem, but it turned out to be okay. She
20:45
Speaker 3: can wipe her brow. She's lucky, and you know, let's
20:50
Speaker 3: let's talk about that for a minute. I mean, when
20:53
Speaker 3: you know whenever you die without a will, you always
20:57
Speaker 3: got to be careful because you don't know where you're
20:59
Speaker 3: asked that are going to go. Now, the fact that
21:02
Speaker 3: you got remarried in it looks like twenty fifteen in
21:07
Speaker 3: their heads, yep, and you didn't die until twenty twenty one.
21:12
Speaker 3: Why on earth over all those years did you not
21:15
Speaker 3: do a new estate plan?
21:17
Speaker 2: Because now he's got his second wife pitted against his daughter.
21:21
Speaker 2: That's right, like lay out a plan.
21:24
Speaker 3: So let's talk about how that plays out for them. Right,
21:27
Speaker 3: Because now, if you don't even do a will on
21:30
Speaker 3: a second marriage, please just step up and get your
21:35
Speaker 3: planning in place and decide how you want your assets
21:39
Speaker 3: to go. Control the disposition of the assets if you can, right,
21:43
Speaker 3: Because let's play out the string here. If it turns
21:46
Speaker 3: out that this marriage was void from the get go,
21:50
Speaker 3: well then under the intestacy laws, meaning it's void from
21:53
Speaker 3: the get go, which means she's not married, right, so
21:56
Speaker 3: she's not a spouse, So under the intestacy laws, she's
22:00
Speaker 3: completely out right. And Tina, let's assume the only daughter,
22:05
Speaker 3: the only child. I think she'd probably take everything you'd
22:09
Speaker 3: need to look at the Oregon intestacy statute. It's a
22:12
Speaker 3: state issue.
22:13
Speaker 2: But wow, could kick her stepmother out of her own house.
22:18
Speaker 3: She could, Yeah, she could be in complete charge. Now
22:21
Speaker 3: if it was a valid marriage, well then I think
22:24
Speaker 3: it's still possible that Tina might get something under the
22:28
Speaker 3: intestacy laws, and the wife will get something.
22:31
Speaker 2: Because even though they're pitted against each other. Now, that
22:34
Speaker 2: doesn't mean her dad would want to disinherit her. That's
22:38
Speaker 2: right and again count for both of them.
22:41
Speaker 3: Right, But and I think that's how the intestacy laws work.
22:44
Speaker 3: So I think at this point, yeah, I mean, at
22:48
Speaker 3: least she might get something here. We don't know what.
22:51
Speaker 3: But I think at the end of the day, folks,
22:52
Speaker 3: you know, do your planning right now. Remember, even if
22:55
Speaker 3: they didn't do any planning, if he really wanted his
22:59
Speaker 3: wife Grace to get everything, he could have simply put
23:01
Speaker 3: set up joint accounts. He could have changed beneficiaries on
23:05
Speaker 3: life insurance to her, change beneficiaries on iras to her,
23:09
Speaker 3: put her name on accounts. All those things would avoid probate.
23:12
Speaker 3: Wouldn't matter what the intestacy statute says.
23:15
Speaker 2: Our draft will that that disinherits his daughter. If he
23:18
Speaker 2: didn't want her to get anything.
23:19
Speaker 3: Either right, right, he could have done some planning, but
23:22
Speaker 3: I think it's really important to understand that you avoid
23:26
Speaker 3: that whole probate problem this way. But it's not right.
23:29
Speaker 3: I think the better thing to do is get your
23:31
Speaker 3: plan in place, set up a trust, put Grayson as
23:34
Speaker 3: a beneficiary somehow a controlled beneficiary, and take care of
23:38
Speaker 3: your daughter later. I mean, it can be done if
23:41
Speaker 3: we say it over and over. But you got to
23:43
Speaker 3: do your planning to make sure your family gets their assets,
23:45
Speaker 3: and folks, you got to get the guide to do
23:48
Speaker 3: your planning to make sure you don't pay taxes on
23:51
Speaker 3: these assets unnecessarily and your family gets them efficiently. Call
23:56
Speaker 3: and get the new guide. It's the beginning of a
23:58
Speaker 3: month eight six six four eight five six ninety nine
24:02
Speaker 3: or Legalexchange show dot com.
24:05
Speaker 2: You've been listening to Todd Lutski, a partner with the
24:07
Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
24:11
Speaker 2: financial advisor with the Armstrong Advisory Group, and Todd will
24:14
Speaker 2: be answering your listener questions when we return to the
24:17
Speaker 2: Legal Exchange with Todd Lutsky.
24:20
Speaker 1: If you're retired or nearing retirement and haven't done your planning,
24:23
Speaker 1: yet you could be missing out on opportunities that can
24:26
Speaker 1: save you thousands of dollars. Cushing and Dolan are experts
24:29
Speaker 1: in elder law and taxation, and they have a new
24:31
Speaker 1: guide out this month called Balancing Asset Protection and Avoiding
24:35
Speaker 1: Estate Taxes. Early estate planning can have many benefits, especially
24:39
Speaker 1: if you want to protect the assets, but there's another
24:41
Speaker 1: big advantage. Doing your planning the right way might also
24:44
Speaker 1: help you eliminate your estate taxes. Learn how to keep
24:47
Speaker 1: your assets in your family and avoid probate. Get Cushing
24:50
Speaker 1: and Dolan's brand new guide called Balancing Asset Protection and
24:53
Speaker 1: Avoiding Estate Taxes. Call right now eight sixty six eight
24:56
Speaker 1: four eight five six ninety nine. That number again is
25:00
Speaker 1: eight four eight five six ninety nine, or you can
25:03
Speaker 1: request your guide online from our website Legal Exchange show
25:06
Speaker 1: dot com. That's a Legal exchange show dot com. The
25:10
Speaker 1: proceeding was paid for in The views expressed are solely
25:12
Speaker 1: those of Cushing and Dolan. Cushing and Dolan, ind or
25:14
Speaker 1: Armstrong Advisory may contact you offering legal or investment services.
25:17
Speaker 1: Cushing and Dolan and Armstrong Advisory do not endorse each
25:19
Speaker 1: other and are not affiliated the US Virgin Islands are
25:25
Speaker 1: Saint Croix, Saint Thomas, and Saint John. Visit one or
25:28
Speaker 1: all three and enjoy the vacation of a lifetime. Each
25:31
Speaker 1: island is special in its own unique way, So whether
25:34
Speaker 1: you want the heritage of Saint Croix, the pristine beaches
25:37
Speaker 1: of Saint Thomas, or the common relaxation of Saint John,
25:40
Speaker 1: the US Virgin Islands is one of the top vacation
25:43
Speaker 1: spots to visit in the Caribbean. You can expect perfect temperatures,
25:46
Speaker 1: a wide variety of water sports, world class cuisine, and
25:49
Speaker 1: a vibrant nightlife. From the moment you arrive, you'll fall
25:53
Speaker 1: naturally in rhythm with the heartbeat of the islands. There's
25:55
Speaker 1: no money to exchange, and travel from New England could
25:58
Speaker 1: not be easier. Take your plans now by going to
26:01
Speaker 1: visit USVII dot com, learn about all three islands and
26:05
Speaker 1: plan the ideal vacation for you and your family. America's
26:08
Speaker 1: Caribbean paradise is waiting for you, so head to visit
26:11
Speaker 1: USVII dot com for more information and to reserve your
26:14
Speaker 1: trip today. That's visit USVII dot com.
26:22
Speaker 4: Planning for later life is a year round effort, and
26:24
Speaker 4: with the calendar about to change, there are several important
26:27
Speaker 4: numbers to understand as we turn to the new year. Hi,
26:29
Speaker 4: this is Mike Armstrong from the Armstrong Advisory Group. In
26:32
Speaker 4: our new guide called Key Numbers to Know for twenty
26:35
Speaker 4: twenty five, we'll discuss a variety of topics that may
26:38
Speaker 4: help you with your planning for the upcoming year. The
26:40
Speaker 4: guide focuses on many subjects, among them numbers related to
26:43
Speaker 4: retirement account, income and gifting limits, Medicare part B premiums,
26:47
Speaker 4: and marginal tax brackets, all of which are crucial to
26:50
Speaker 4: your overall planning strategy. Learn about how these numbers may
26:53
Speaker 4: affect your financial plan in twenty twenty five by calling
26:56
Speaker 4: our office today at eight hundred three nine three four
26:59
Speaker 4: zero zero row one ask for your free guide called
27:01
Speaker 4: Key Numbers to Know for twenty twenty five. That number
27:04
Speaker 4: again is eight hundred three nine three four zero zero one.
27:07
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:10
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:12
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
27:15
Speaker 1: your own financial tax into state planning advisors before making
27:18
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
27:21
Speaker 1: advisory services. You're listening to the Legal Exchange, and it's
27:25
Speaker 1: time for Ask Todd, the segment where Todd will answer
27:29
Speaker 1: your questions about anything and everything that's included in the
27:32
Speaker 1: estate planning process. Once again, here's Todd Lutsky and Susan Powers.
27:38
Speaker 2: Welcome back, Tob. We've a few questions from listeners for you.
27:42
Speaker 2: First question comes from down in Chickapea, mass And Don writes,
27:45
Speaker 2: my mother in law recently passed away. She had a
27:49
Speaker 2: revocable trust of which my wife is the trustee. We
27:52
Speaker 2: have a checking account still in her mom's name individually.
27:56
Speaker 2: Can my wife use these funds in this account to
27:58
Speaker 2: pay utility bills in real estate taxes for her home
28:02
Speaker 2: as the only child and executress. Does my wife automatically
28:06
Speaker 2: have authorization to sign checks for this account? Also? Will
28:10
Speaker 2: we need to claim any of this inheritance on our
28:12
Speaker 2: taxes this year?
28:15
Speaker 3: So I'm trying to fall So we've got a We've
28:16
Speaker 3: got a living spouse. It was a revocable trust.
28:20
Speaker 2: Mom died.
28:22
Speaker 3: There's no dad, Mom, Okay, so this is it. She
28:25
Speaker 3: was the surviving spouse.
28:27
Speaker 2: Mom passed away.
28:28
Speaker 3: Mom passed away, and the revocable trust, as everybody needs
28:32
Speaker 3: to know, becomes irrevocable when the donor of the spouse
28:38
Speaker 3: or when the donor of the trust died, and so
28:40
Speaker 3: in this case the trust is irrevocable. The trustee is
28:43
Speaker 3: the daughter daughter.
28:44
Speaker 2: Ye, so and the executists.
28:46
Speaker 3: We probably need to read the trust to figure this
28:50
Speaker 3: out a little bit, but let's just take a shot.
28:54
Speaker 3: So I'm going to say that if the trust says,
28:59
Speaker 3: you know, everything into equal buckets for the kids, and
29:04
Speaker 3: if the trust also says pay it out, okay, so
29:09
Speaker 3: clearly she could. There's no probate. She's not gonna have
29:12
Speaker 3: to wait. She does have the trustee of the trust,
29:16
Speaker 3: which is the daughter, does have really immediate access to
29:19
Speaker 3: those funds.
29:20
Speaker 2: To the trust funds. But what about the checking account
29:22
Speaker 2: that mom has in her name still.
29:24
Speaker 3: So if it's in mom's name alone, she won't have
29:27
Speaker 3: immediate access to those. But I'm also looking at how
29:29
Speaker 3: are we going to pay these utility bills in real
29:32
Speaker 3: estate taxes. I'm going to assume those that that house
29:36
Speaker 3: is in the trust. So if that house is in
29:38
Speaker 3: the trust and there's money in the trust, she can
29:42
Speaker 3: access those accounts right away to pay the bills of
29:46
Speaker 3: a house that's in the trust, that's just operation, that's
29:50
Speaker 3: an operating expense of the trust. So she would not
29:53
Speaker 3: have to wait for probate. And so that's another reason
29:56
Speaker 3: people do this planning, right. It makes it easier for
29:59
Speaker 3: the surviving children or spouse to access what's in the
30:06
Speaker 3: trust take care of things like a house, like paying bills.
30:10
Speaker 3: So they can do that. But you're right, if there's
30:13
Speaker 3: only a house in the trust and no money, well,
30:18
Speaker 3: then to be and the other accounts are outside the
30:22
Speaker 3: trust and in or in the mother's name alone, Yeah,
30:28
Speaker 3: it's going to take the children longer to be able
30:32
Speaker 3: to actually access those accounts to pay these bills. They
30:38
Speaker 3: would need to petition the court to get appointed, send
30:43
Speaker 3: letters to all the heirs at law telling them they
30:46
Speaker 3: can object, wait at least thirty days for the objection,
30:50
Speaker 3: then wait for the court to recall them back to
30:53
Speaker 3: court to say you can now be appointed. So this
30:57
Speaker 3: is you know, a sixty to ninety day process, probably
31:01
Speaker 3: sixty anyway on a good day to get it appointed.
31:05
Speaker 3: Once you're appointed, not just because you're listed on the will,
31:09
Speaker 3: you have to be appointed, then you can actually take
31:12
Speaker 3: the appointment paperwork from the court along with the death certificate,
31:19
Speaker 3: walk into the institution and now they will talk to you.
31:24
Speaker 3: They will let you close those accounts that were in
31:27
Speaker 3: the mother's name and reopen them in the name of
31:31
Speaker 3: the estate of the mother and get a new ID
31:36
Speaker 3: number for that, and then you can pay those bills.
31:39
Speaker 2: Got it?
31:40
Speaker 3: So tale of two stories really here. One is assets
31:42
Speaker 3: in the trust, assets not in the trust. Planning works
31:47
Speaker 3: way better.
31:48
Speaker 2: Get beneficiaries and all your stuff.
31:50
Speaker 3: Yeah, yeah, or do a trust, which is what they did.
31:53
Speaker 3: And folks, that's really where we're at with this new guide.
31:57
Speaker 3: We have a tale of two objectives, right, get your
32:01
Speaker 3: stuff in a trust, get your planning done, and then
32:04
Speaker 3: you're not only taking care of your family, but you're
32:07
Speaker 3: reducing estate taxes. And this guide shows you how to
32:11
Speaker 3: avoid the probate, reduce the estate taxes, explains an example,
32:15
Speaker 3: runs the calculations for the taxes, and the trust tells
32:19
Speaker 3: you how. It explains how the trust does this. Also
32:22
Speaker 3: for people who don't care about or who do care
32:25
Speaker 3: about protecting assets from the nursing home. There's another section
32:28
Speaker 3: in there all about irrevocable trusts, how they operate to
32:32
Speaker 3: protect it, explains the marital share and the remainder share,
32:36
Speaker 3: and explains trust not only protects it from the nursing home,
32:39
Speaker 3: but shelters the assets for death taxes. A tale of
32:43
Speaker 3: two objectives, Folks, learn which one's right for you. Eight
32:47
Speaker 3: six six eight four eight five six nine nine or
32:52
Speaker 3: Legal Exchange Show dot com again eight six six eight
32:55
Speaker 3: four eight five six nine nine or Legal Exchange Show.
33:01
Speaker 2: Our last question comes from Fred in Maine and Fred Wrights.
33:04
Speaker 2: My wife and I created two irrevocable trusts around eight
33:08
Speaker 2: years ago, at the time we left everything to our
33:12
Speaker 2: only child to be paid to him outright. He has
33:15
Speaker 2: now told us that he is getting divorced. Is it
33:18
Speaker 2: possible for us to divorce proof his inheritance or is
33:22
Speaker 2: it too late at this point?
33:24
Speaker 3: So obviously we didn't read Fred's trust, but we'll speak
33:28
Speaker 3: from our trusts.
33:29
Speaker 2: Yep.
33:30
Speaker 3: So the trust that we do at Cushing and Dolan
33:32
Speaker 3: when they are irrevocable like this one. I'm guessing this
33:36
Speaker 3: is an irrevocable medicaid trust. I only mentioned that because
33:40
Speaker 3: we talked earlier in the program about irrevocable life insurance trusts,
33:45
Speaker 3: and I just want you, folks, to understand that these
33:48
Speaker 3: two animals are very different. The control, the rigidity that
33:54
Speaker 3: exists with a medicaid trust far exceeds the control that
34:00
Speaker 3: exists with a irrevocable life insurance trust. So just be
34:05
Speaker 3: mindful that they're different. We're going to now talk about
34:08
Speaker 3: these irrevocable medicaid trusts that Fred put together. If it
34:12
Speaker 3: was our trust. We put language in there known as
34:16
Speaker 3: a limited power of appointment.
34:19
Speaker 2: What does that do for you?
34:20
Speaker 4: In English?
34:21
Speaker 3: Yeah, fancy tax term, right, that says the don ore.
34:25
Speaker 3: And this is a donor power, folks, not a trustee power.
34:30
Speaker 3: And that's important to understand, right, because in this case
34:33
Speaker 3: Fred and Fred's wife would not be the trustees on
34:38
Speaker 3: these trusts, but they would be the donors. So the parents,
34:42
Speaker 3: the moms and dads of the world, are the donors, Yeah,
34:47
Speaker 3: but not likely the trustees. So this power we talk about,
34:51
Speaker 3: this limited power of appointment, is a donor power. So
34:54
Speaker 3: it's a mom and dad power. So now mom and
34:58
Speaker 3: dad have the power to a point the assets in
35:03
Speaker 3: the trust, and it's the language usually says equally or
35:08
Speaker 3: unequally to a class consisting of children of all generations,
35:15
Speaker 3: which really means you can't add anybody new to this
35:20
Speaker 3: trust as a beneficiary once it's created, So no cousin
35:24
Speaker 3: Vinny coming in. But when a life event changes that
35:28
Speaker 3: affects the group in the existing class, yeah, you can
35:33
Speaker 3: change it. So a couple of things. One they could say, well, yeah,
35:36
Speaker 3: I want to leave. You could leave more to one
35:39
Speaker 3: child than another. That's clearly allowed. Or you can change
35:43
Speaker 3: how they get it without necessarily changing the amounts. Right,
35:48
Speaker 3: so it's equally or unequally to the kids and the
35:51
Speaker 3: way they get it. So you could probably add language
35:53
Speaker 3: now to the trust that says instead of paying it outright,
36:00
Speaker 3: which is what it said in the fact pattern here, right,
36:02
Speaker 3: pay it out right instead of saying that, you could
36:06
Speaker 3: put language in that says, hold it in trust for
36:10
Speaker 3: these kids and treat them all the same. Don't don't
36:14
Speaker 3: you know just because you think one's getting divorced and
36:16
Speaker 3: one might not be right, you never know if the
36:19
Speaker 3: one might not be will get one. And you don't
36:22
Speaker 3: want one kid to feel like they're treated differently than another,
36:25
Speaker 3: so you treat them both the same. Where they are allowed.
36:28
Speaker 3: It's held in trust. They can be trustees the kids,
36:32
Speaker 3: but put a they have to pick an independent trustee
36:36
Speaker 3: to make distribution decisions only. That's how you get it,
36:41
Speaker 3: and they can remove and replace that person anytime they want,
36:46
Speaker 3: so there's no negative for them. But that will now
36:49
Speaker 3: have it protected from divorces because they don't own it,
36:53
Speaker 3: so it's not a may it's not an asset subject
36:56
Speaker 3: of the marriage anyway. Folks, learn how to tect your
37:00
Speaker 3: assets and get them to your family the way you
37:03
Speaker 3: want eight six six eight four eight five six nine
37:07
Speaker 3: nine or Legal Exchange Show dot com.
37:10
Speaker 2: If you have a question you would like to ask Todd,
37:12
Speaker 2: visit his website Legal Exchange Show dot com and click
37:15
Speaker 2: on the ask Tod tab. Maybe I'll be able to
37:17
Speaker 2: read your question on the air, and hopefully his answer
37:20
Speaker 2: will stop you from becoming one of his next real
37:23
Speaker 2: life stories. You've been listening to Todd Lutsky. I'll partner
37:27
Speaker 2: with the law firm of Cushing and Dolan. I'm Susan Powers,
37:30
Speaker 2: a financial advisor with the Armstrong Advisory Group. We'll be
37:34
Speaker 2: back with more after this quick break on the Legal
37:36
Speaker 2: Exchange with Todd Lutsky.
37:39
Speaker 1: If you're retired or nearing retirement and haven't done your
37:42
Speaker 1: planning yet, you could be missing out on opportunities that
37:45
Speaker 1: can save you thousands of dollars. Cushing and Dolan are
37:48
Speaker 1: experts and elder law and taxation, and they have a
37:50
Speaker 1: new guide out this month called Balancing Asset Protection and
37:53
Speaker 1: Avoiding Estate Taxes. Early estate planning can have many benefits,
37:57
Speaker 1: especially if you want to protect the assets, but there's
38:00
Speaker 1: another big advantage. Doing your planning the right way might
38:03
Speaker 1: also help you eliminate your estate taxes. Learn how to
38:06
Speaker 1: keep your assets in your family and avoid probate. Get
38:08
Speaker 1: Cushing and Dolan's brand new guide called Balancing Asset Protection
38:12
Speaker 1: into Avoiding Estate Taxes. Call right now eight six six
38:15
Speaker 1: eight four eight five six ninety nine. That number again
38:18
Speaker 1: is eight six six eight four eight five six nine nine,
38:21
Speaker 1: or you can request your guide online from our website
38:24
Speaker 1: Legal Exchange show dot com. That's a Legal exchange show
38:27
Speaker 1: dot com. The proceeding was paid for in The views
38:30
Speaker 1: expressed are solely those of Cushing and Dolan. Cushing and
38:32
Speaker 1: Dolan and or Armstrong Advisory may contact you offering legal
38:35
Speaker 1: or investment services. Cushing and Dolan and Armstrong Advisory do
38:37
Speaker 1: not endorse each other and are not affiliated.
38:39
Speaker 4: Financial planning is a year round job, and with twenty
38:42
Speaker 4: twenty four coming to an end, now is the perfect
38:44
Speaker 4: time to take a hard look at your strategy and
38:46
Speaker 4: what changes you may want to make going forward.
38:49
Speaker 3: Hi.
38:49
Speaker 4: This is Mike Armstrong from the Armstrong Advisory Group and
38:52
Speaker 4: our new guide may help you understand some key numbers
38:54
Speaker 4: that can affect your planning next year. There are many
38:56
Speaker 4: important topics to review, like marginal tax brackets and retire
39:00
Speaker 4: ronment account income limits if you're retired or getting ready
39:03
Speaker 4: to retire. The guide also focuses on the many ways
39:06
Speaker 4: that the government taxes your social Security benefits. Take the
39:09
Speaker 4: time now to reflect on your current strategy so you
39:11
Speaker 4: can be fully prepared for any adjustments you may want
39:14
Speaker 4: to make in the future. Get your copy of our
39:16
Speaker 4: new guide Key Numbers to Know for twenty twenty five
39:19
Speaker 4: by calling eight hundred three nine three four zero zero one.
39:23
Speaker 4: That number again is eight hundred three nine three four
39:25
Speaker 4: zero zero one.
39:26
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
39:28
Speaker 1: registered investment advisor. Nothing in the ad or in any
39:31
Speaker 1: Armstrong Guide a specific financial, legal or tax advice. Consult
39:33
Speaker 1: your own financial tax into state planning advisors before making
39:36
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
39:38
Speaker 1: advisory services. The US Virgin Islands are Saint Croix, Saint
39:44
Speaker 1: Thomas and Saint John. Visit one or all three and
39:48
Speaker 1: enjoy the vacation of a lifetime. Each island is special
39:51
Speaker 1: in its own unique way, so whether you want the
39:53
Speaker 1: heritage of Saint Croix, the pristine beaches of Saint Thomas,
39:57
Speaker 1: or the common relaxation of Saint John, U Virgin Islands
40:00
Speaker 1: is one of the top vacation spots to visit in
40:03
Speaker 1: the Caribbean. You can expect perfect temperatures, a wide variety
40:06
Speaker 1: of water sports, world class cuisine, and a vibrant nightlife.
40:10
Speaker 1: From the moment you arrive, you'll fall naturally in rhythm
40:13
Speaker 1: with the heartbeat of the islands. There's no money to exchange,
40:15
Speaker 1: and travel from New England could not be easier. Make
40:18
Speaker 1: your plans now by going to visit USVII dot com.
40:22
Speaker 1: Learn about all three islands and plan the ideal vacation
40:25
Speaker 1: for you and your family. America's Caribbean paradise is waiting
40:29
Speaker 1: for you, so head to visit USVII dot com for
40:32
Speaker 1: more information and to reserve your trip today. That's visit
40:35
Speaker 1: USVII dot com your tune to the Legal Exchange with
40:43
Speaker 1: Todd Lutsky. If you are a loved one needs a
40:45
Speaker 1: nursing homestay, call Todd right now at eight sixty six
40:48
Speaker 1: eight four eight five six ninet nine and let him
40:50
Speaker 1: make sure your assets are protected. That's eight six six
40:53
Speaker 1: eight four eight five six nine nine, or visit him
40:56
Speaker 1: online at Legal Exchange show dot com.
41:00
Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
41:03
Speaker 2: Susan Power as a financial advisor the Armstrong Advisory Group,
41:07
Speaker 2: and I'm joined by Todd Lutsky, a partner with the
41:09
Speaker 2: law firm of Cushing and Dolan with a master's in taxation. So, Todd,
41:14
Speaker 2: I think that looking at your guy this month, it's
41:17
Speaker 2: reducing estate taxes and asset protection, increasing that protection that
41:23
Speaker 2: you have. I think before we can explain how you
41:26
Speaker 2: actually reduce estate taxes, I think we first need to
41:30
Speaker 2: take a step back and explain what's actually included in
41:35
Speaker 2: your taxable estate slide up to the table.
41:39
Speaker 3: Fair, fair enough, right? And I think we oftentimes skip this. Yes,
41:45
Speaker 3: I think a lot of people skip this. They'll they'll say, well,
41:50
Speaker 3: I don't even know that I guess what's included in
41:54
Speaker 3: your estate goes along with my eyes or my thinking.
41:58
Speaker 3: In terms of funding, we help people put assets in
42:02
Speaker 3: the trust to fund the trust so that it is
42:05
Speaker 3: sheltered and can avoid taxes and protection and all those
42:09
Speaker 3: good things. But the same idea is, well, when you die,
42:13
Speaker 3: how do we know what's taxable right in your state?
42:17
Speaker 3: And that's a fair question. So what is taxable? Folks?
42:21
Speaker 3: Pretty much any asset you have an ownership interest in,
42:28
Speaker 3: or if it's in a trust, you still have an
42:31
Speaker 3: ownership interest, meaning if it's going to be included in
42:34
Speaker 3: your estate. So like an irrevocable medicaid trust, those are
42:39
Speaker 3: in even though the trust owns them, whereas an irrevocable
42:43
Speaker 3: life insurance trust, the assets are out of your state
42:47
Speaker 3: because you have no control over those.
42:49
Speaker 2: So let's walk through some practical examples. So let's say
42:53
Speaker 2: you haven't done trust planning and you have a house
42:56
Speaker 2: that's owned by husband and wife. And in this example,
42:58
Speaker 2: a husband passed away. So if they own that joint
43:02
Speaker 2: with rights of survivorship, doesn't the wife own the whole thing,
43:04
Speaker 2: not the husband at.
43:06
Speaker 3: Death, but on the first death, at the moment of death,
43:10
Speaker 3: is what we care about, So always think of that.
43:12
Speaker 3: That's the way to look at it. Right at the
43:13
Speaker 3: moment someone dies, what did they own? Okay, oh well,
43:17
Speaker 3: yeah it was jointly owned.
43:19
Speaker 2: He owned half, so half of that house would be included.
43:23
Speaker 3: Would be included in the estate. The other half she
43:26
Speaker 3: didn't die, so not included.
43:28
Speaker 2: So even though included in his estate, if there's no
43:31
Speaker 2: trust planning done, she's going to get the whole house, right,
43:35
Speaker 2: sure is, So he's going to be taxed on it
43:37
Speaker 2: on his death. And then because it's going to her anyway,
43:41
Speaker 2: isn't she going to be taxed on it again when
43:42
Speaker 2: she dies?
43:43
Speaker 3: Exactly?
43:45
Speaker 2: That's no good.
43:45
Speaker 3: That's not good. That's exactly how it works. And I
43:48
Speaker 3: was doing a seminar the other day and I was
43:50
Speaker 3: explaining how to do the seven oh six, same idea.
43:53
Speaker 3: How do we know what is included in the estate,
43:56
Speaker 3: and how do we know what passes to a spouse?
43:58
Speaker 3: And how do we know what gets into trust when
44:00
Speaker 3: you die? Right, everything is different. So that would be
44:03
Speaker 3: a great example. Jointly owned assets and expand on it
44:07
Speaker 3: a little susan, So jointly owned homes, Yes, with a spouse,
44:12
Speaker 3: we'll focus on spouse. Jointly owned homes are jointly owned
44:16
Speaker 3: rental properties with a spouse, Yeah, jointly owned brokerage accounts
44:21
Speaker 3: with a spouse, bank accounts with a spouse. All things
44:26
Speaker 3: that are jointly owned with a spouse are half included.
44:30
Speaker 3: They're deemed under the law to be half included.
44:34
Speaker 2: Which is how most married couples that haven't done trust planning,
44:38
Speaker 2: that's how they own their assets.
44:39
Speaker 3: That's right.
44:40
Speaker 2: So even though it's going to be includable, all of
44:43
Speaker 2: those assets, half of all of those assets are included
44:47
Speaker 2: in the husband's state taxable estate. They're going to then
44:51
Speaker 2: go to the wife by rights of survivorship, and they're
44:54
Speaker 2: going to be taxed again when she dies.
44:56
Speaker 3: It's exactly right.
44:57
Speaker 2: Good comes of.
44:57
Speaker 3: That nothing, That's exactly why they the laws are set
45:01
Speaker 3: up that way, right, So not only at least it
45:04
Speaker 3: avoids probate so it gets to the spouse. Great, great,
45:09
Speaker 3: but you didn't get to utilize or shelter. You didn't
45:13
Speaker 3: get to utilize your exemption on the first death, and
45:16
Speaker 3: you didn't get to shelter any assets on the first death.
45:19
Speaker 3: That's the whole point of planning. Instead, as you said, Susan,
45:22
Speaker 3: everything just went to the spouse, and therefore the spouse
45:25
Speaker 3: is going to be loaded for bear when she dies
45:28
Speaker 3: right at a much higher amount of assets, therefore potentially
45:33
Speaker 3: creating a much larger estate tax. Folks. That's the kind
45:38
Speaker 3: of examples that are in this guide for this month.
45:41
Speaker 3: A Tale of Two objectives, how to reduce your estate
45:44
Speaker 3: taxes and if you want, protect assets from the nursing home.
45:48
Speaker 3: First example, like we just went through, explains how that
45:51
Speaker 3: marital share and remainder share in the revocable trust work
45:56
Speaker 3: to shelter those assets from taxation. On the second day,
46:00
Speaker 3: then there's a whole another section that has the irrevocable
46:04
Speaker 3: trusts and explains how those remainder shares and marital shares
46:08
Speaker 3: are created, although slightly different from the revocable, still accomplishing
46:13
Speaker 3: the sheltering of the assets from estate taxes while at
46:17
Speaker 3: the same time protecting them from the nursing home. Pick
46:20
Speaker 3: which one's right for you, folks. Either way, get the
46:23
Speaker 3: guide A Tale of Two objectives, Reducing estate taxes and
46:27
Speaker 3: protecting assets from the nursing home eight six six eight
46:31
Speaker 3: four eight five six nine nine or Legal Exchange Show
46:35
Speaker 3: dot Com again eight six six, eight four eight, five,
46:39
Speaker 3: six nine nine or legal Exchange show dot com.
46:43
Speaker 2: Okay, so anything that's owned jointly with someone else.
46:46
Speaker 3: With spouse, not someone else spouse. Okay, I just wanted
46:50
Speaker 3: to I wanted to cut you off there because I
46:52
Speaker 3: want to say just the spouse. Now, ask me about
46:54
Speaker 3: having a chicken.
46:56
Speaker 2: If the husband dies, yeah, and he owns an account
47:00
Speaker 2: with his kid.
47:02
Speaker 3: Or or if the husband died, everything went to the spouse,
47:05
Speaker 3: and then the spouse creates these accounts as a single
47:08
Speaker 3: person and says, oh, I'm going to put you know,
47:11
Speaker 3: my daughter's name on this account. I'm going to put
47:13
Speaker 3: my son's name on this account, and on we go. Right,
47:17
Speaker 3: different rules so when you die own of course there
47:22
Speaker 3: are right. In fact, there's two separate categories on the
47:25
Speaker 3: seven oh six estate tax return that describes this. These
47:29
Speaker 3: are what they call non qualified joint owners. Qualified is
47:34
Speaker 3: with a spouse. Non qualified is with a kid. So,
47:38
Speaker 3: for example, I put Billy or the spouse puts Billy
47:43
Speaker 3: on three accounts. Never mind that it's going to disinherit
47:47
Speaker 3: the other kids, because it's going to go directly to
47:49
Speaker 3: that one kid. And that's a problem in and of itself.
47:52
Speaker 3: But what about from a tax perspective, what's inclusion was
47:55
Speaker 3: your question, Todd, what's included in the estate of the
48:00
Speaker 3: person who dies? Well, jointly owned property or jointly owned
48:06
Speaker 3: accounts with a non spouse are deemed one hundred percent
48:12
Speaker 3: includable in the estate of the joint owner that died,
48:18
Speaker 3: whoever died first. Yep, it's deemed one hundred percent includable
48:22
Speaker 3: instead of half unless the surviving joint owner can show
48:30
Speaker 3: or prove contribution.
48:32
Speaker 2: Which you know they can't. They did their parents just
48:34
Speaker 2: threw their names on something.
48:35
Speaker 3: Well, you're generally right, Susan, that's generally a right comment.
48:39
Speaker 3: But let me explain to you what we do see
48:41
Speaker 3: all the time. So let's say, uh, John Public dies
48:47
Speaker 3: mm hmm, but he had a bank account jointly owned
48:53
Speaker 3: with aunt Emma. Yeah, and aunt Emma says, why did
48:56
Speaker 3: my nephew die out of order? Nephews aren't supposed to
49:00
Speaker 3: die before ants, right, Yeah, And if then you do
49:03
Speaker 3: what it's called an affidavit of contribution that says she
49:07
Speaker 3: signs it because she's alive, saying, look it was in
49:10
Speaker 3: my social Security number, money, my social Security checks get
49:14
Speaker 3: deposited in there. It's you know, reported on my tax return.
49:18
Speaker 3: He didn't contribute anything, right, it's all mine. He was
49:23
Speaker 3: on only for convenience. So then you list it and
49:26
Speaker 3: it goes magically from being one hundred percent includable to
49:31
Speaker 3: not includable at all. Right, so very different rules. But
49:35
Speaker 3: I think that's a great question that you ask, you know,
49:37
Speaker 3: how that works.
49:38
Speaker 2: And then how about things like retirement accounts, whether it's
49:42
Speaker 2: a four oh one K or a traditional IRA or
49:44
Speaker 2: even a roth iry, that's that's contribuing. Yeah, that's tax free,
49:48
Speaker 2: should be counted.
49:49
Speaker 3: Yeah, And that's really the great questions I think people
49:51
Speaker 3: confuse it to. So four oh one k's iras absolutely includable.
49:56
Speaker 3: You died, you own it. It's in your name alone.
49:58
Speaker 3: It has to be so it's going to be included
50:02
Speaker 3: a wroth, same thing. It has to be in your name.
50:06
Speaker 3: It's going to be included in your estate when you die.
50:09
Speaker 3: Now to your point, yeah, it's income tax free when
50:13
Speaker 3: the people take it out of the wroth, But when
50:17
Speaker 3: you die owning it it is an asset, yeah, that
50:20
Speaker 3: you will be subject to death tax on. So folks,
50:24
Speaker 3: that helps you understand what's included. Get the guide and
50:27
Speaker 3: learn how to set up the trust so that you
50:29
Speaker 3: can shelter these assets that are now included in your
50:33
Speaker 3: estate from the state taxes and protect them from the
50:35
Speaker 3: nursing home if you wish eight six six eight four
50:39
Speaker 3: eight five six ninety nine or Legal Exchange show dot com.
50:44
Speaker 2: Todd Lutsky from the law firm of Cushing in Dolan,
50:46
Speaker 2: thank you so much.
50:47
Speaker 3: Thank you, Susan, always a pleasure.
50:49
Speaker 2: I'm Susan Power as a financial advisor with the Armstrong
50:52
Speaker 2: Advisory Group. We thank you for joining us and we'll
50:55
Speaker 2: be back again next week on the Legal Exchange with
50:58
Speaker 2: Todd Lutsky.
51:00
Speaker 1: If you're retired or nearing retirement and haven't done your
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Speaker 1: The proceeding was paid for in The views expressed are
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53:00
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