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Ask Todd: Another reason to avoid probate · The Financial Exchange Show

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  Speaker 1: This is Ask Todd on the Financial Exchange Radio network.
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  Speaker 1: If you have an existing estate plan or in the
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  Speaker 1: market for one, Todd Letsky is here to answer your
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  Speaker 1: questions and help you plan for a later life. Ask
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  Speaker 1: Todd is presented by Cushing and Dolan, serving Massachusetts and
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  Speaker 1: New England for more than thirty five years, helping families
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  Speaker 1: with a state and tax planning, medicaid planning, and probate law.
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  Speaker 1: Visit Cushingdolan dot com. Now here's Todd Lutsky.
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  Speaker 2: As promised, we are now joined by Todd Lutsky from
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  Speaker 2: the law firm of Cushing and Dolan. Segment is Asked Todd.
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  Speaker 2: We got the phone lines open because you get to
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  Speaker 2: ask Todd your state planning questions live on air right now.
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  Speaker 2: Phone numbers eight eight eight two zero five two two
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  Speaker 2: sixty three. A reminder, we only get to maybe two
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  Speaker 2: or three calls each time, and so that gives you
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  Speaker 2: a pretty strong incentive to call early to make sure
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  Speaker 2: we get to answer your question again. Eight eight eight
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  Speaker 2: two zero five two two sixty three is the number
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  Speaker 2: to ask Todd l your estate planning questions live on
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  Speaker 2: air right now. That number again is eight eight eight
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  Speaker 2: two zero five two two six three. Mister Lutsky, how
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  Speaker 2: are you doing today? I am never better?
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  Speaker 1: You?
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  Speaker 2: UH got a little bit annoyed uh earlier this morning.
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  Speaker 3: Yeah, I'm always afraid to ask you this question.
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  Speaker 2: My phone keeps calling me, surely for some reason. Really well,
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  Speaker 2: I realized though that I left in an airplane mode. Okay, yeah, Todd,
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  Speaker 2: I want to talk to you a little bit about trusts,
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  Speaker 2: and specifically, so you go to an estate planning attorney
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  Speaker 2: and you pay them a bunch of money to go
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  Speaker 2: do some legal work for you, trust wills, the whole bit.
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  Speaker 3: Yeah, got it.
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  Speaker 2: How does one know if their trust is actually funded
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  Speaker 2: with assets or if you just paid a bunch of
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  Speaker 2: money for an expensive piece of paper?
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  Speaker 3: And you know, I think the comment the way you
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  Speaker 3: phrase that is accurate because if you don't fund the trust,
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  Speaker 3: arguably it's not really doing anything for you. And that's important.
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  Speaker 3: That's when when Chuck says it's it's an expensive piece
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  Speaker 3: of paper, it could be. So a couple of things. One,
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  Speaker 3: if we're talking about a revocable trust, and then I'll
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  Speaker 3: tell you a little bit about an irrevocable trust and
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  Speaker 3: the differences by having them not funded but the funding.
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  Speaker 3: To determine whether either is funded is really the same.
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  Speaker 3: I would say, take a look at your brokerage statement,
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  Speaker 3: not your IRA statement from the broker, but your non IRA,
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  Speaker 3: non retirement qualified money brokerage statement. Take a look at,
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  Speaker 3: perhaps if it's a revocable trust, even your bank statements,
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  Speaker 3: and see if the name on the statement is your
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  Speaker 3: name or your name and your wife's name alone, or
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  Speaker 3: if it's perhaps if it's revocable, your name trustee of
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  Speaker 3: the trust. So if it shows up as trustee of
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  Speaker 3: the trust, then you know that everything in that account
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  Speaker 3: is in the trust. If it shows up in your name,
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  Speaker 3: then everything in that account is not in your trust,
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  Speaker 3: and it is avoiding the trust, probably because it's jointly
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  Speaker 3: owned and would just pass to the survivor on the
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  Speaker 3: first death. Same idea with the irrevocable trust, see if
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  Speaker 3: the trust.
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  Speaker 2: Name's on there.
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  Speaker 3: Real Estate's another big issue. Real estate needs to be
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  Speaker 3: put in the trust. Vacation homes and primary residents and
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  Speaker 3: the like. So with a vacation home or your primary residence,
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  Speaker 3: make sure that the tax bill, the real estate tax bill,
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  Speaker 3: comes in the name of the trust and not in
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  Speaker 3: your name personally. Remember Just because you see the name
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  Speaker 3: of the trustee there doesn't mean that's who owns it.
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  Speaker 3: Because when we talk about an irrevocable trust, you might
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  Speaker 3: see not your name on the real estate tax bill,
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  Speaker 3: but maybe a child's name trustee of the trust. And
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  Speaker 3: so I get calls all the time saying, oh, we
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  Speaker 3: didn't give the house to our daughter. No you didn't,
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  Speaker 3: it's trustee. So but people see the name and they
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  Speaker 3: think that that person owns it.
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  Speaker 2: No trust owns it. Talk with Todd Lutsky from the
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  Speaker 2: law firm of Cushing and Dolan. If you've got a
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  Speaker 2: question that you want to ask Todd about your estate
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  Speaker 2: plan this is the chance to do so. Eight eight
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  Speaker 2: eight to zero five two two sixty three is the
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  Speaker 2: phone number. Still got a little bit of room on
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  Speaker 2: the phone line, so this is your chance to speak
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  Speaker 2: with Todd again. Eight eight eight to zero five two
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  Speaker 2: two sixty three is the number to call uh to
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  Speaker 2: ask Todd your estate planning questions. Again. That number is
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  Speaker 2: eight eight eight to zero five two two six three.
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  Speaker 2: We're gonna take a quick break now, but when we
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  Speaker 2: come back, we're gonna get your questions with Todd Lutsky again.
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  Speaker 2: That phone number is eight eight eight two zero five
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  Speaker 2: two two sixty three.
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  Speaker 1: Ask Todd with Todd Lutsky every Wednesday at ten thirty
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  Speaker 1: only here on the Financial Exchange Radio Network. You're listening
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  Speaker 1: to Ask Todd with Todd Lutsky on the Financial Exchange
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  Speaker 1: Radio Network.
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  Speaker 2: All right, we got you all. Cue up here with Todd.
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  Speaker 2: Let's get right to your calls. First up, we got
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  Speaker 2: Philip on the Cape. Philip, what's your question for Todd Lutsky?
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  Speaker 4: Yes, my question is, Todd, did an irrevocable trust for me?
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  Speaker 4: Coming up on seven years ago?
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  Speaker 5: When should?
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  Speaker 4: I mean? Do I have to redo it again? In
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  Speaker 4: how many years?
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  Speaker 2: So great question.
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  Speaker 3: It's always good idea to follow up and figure out
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  Speaker 3: after every five, six, seven years you call in to
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  Speaker 3: check in. I mean, if your estate hasn't grown significantly
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  Speaker 3: and you you know, I don't know what your total
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  Speaker 3: net worth is? But did we do one just for you?
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  Speaker 3: Are you married? I just can't recall.
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  Speaker 4: Yeah, no, for both myself and my wife. And yes
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  Speaker 4: we have several properties involved in it and.
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  Speaker 5: That type of thing.
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  Speaker 2: Good good.
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  Speaker 3: And would the total value of your estate be over
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  Speaker 3: four million?
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  Speaker 4: I'm gonna say no, but you never know it today's crisis.
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  Speaker 3: And are the trusts irrevocable or revocable irrevocable? So you know,
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  Speaker 3: if you're somewhere around that four million dollar mark, Let's say,
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  Speaker 3: and we've got the assets funded, as Chuck was asking earlier,
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  Speaker 3: they're already in the trust, I'm saying, and they're irrevocable,
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  Speaker 3: and you've gotten past the five year rule. No, there's
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  Speaker 3: been no law change that should affect you. You should
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  Speaker 3: not need to change your estate plan. I think based
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  Speaker 3: on those factors, your state plan still doing what we
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  Speaker 3: want it to do. It's avoiding probate, it's sheltering estate taxes,
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  Speaker 3: and it's protecting assets from the nursing home. The only
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  Speaker 3: thing that might change is if you've decided that you
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  Speaker 3: want to leave your assets to your family differently than
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  Speaker 3: the way we put it in there. Short of that,
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  Speaker 3: if that's the same, I think you're in pretty good shape.
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  Speaker 3: So great call, Phil, and I think a lot of
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  Speaker 3: people should take point or take note from Phillips call
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  Speaker 3: because it's a good idea to check in with your
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  Speaker 3: estate planning lawyer. You know, every five years or depending
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  Speaker 3: on how big your plan is. Larger estates check in
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  Speaker 3: more frequently. But the point on that is that that's
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  Speaker 3: exactly what our guide is that we're giving away this
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  Speaker 3: month is avoiding potholes. And some of them is, Hey,
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  Speaker 3: I got divorced, I'm changing residency. You know, I've got
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  Speaker 3: a second marriage situation. These are things that make you say, hey,
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  Speaker 3: I better check into my estate plan. It's been five years,
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  Speaker 3: it's been ten years, and maybe I want to check in.
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  Speaker 3: These are some potholes. And for folks that haven't done
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  Speaker 3: their planning, you know, maybe they say, I don't I'm
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  Speaker 3: going to rely on my will or I'm going to
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  Speaker 3: rely on a nominee realty trust. You know, these are
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  Speaker 3: not I don't need to do planning because I'm not
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  Speaker 3: worth enough or I'm I'm single. No, folks, there's all
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  Speaker 3: kinds of potholes that you can run into. So if
• 8:13
  Speaker 3: you haven't done your estate plan, get the guide before
• 8:16
  Speaker 3: you do it so you can learn what not to do.
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  Speaker 3: And if you've done your plan, it might give you
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  Speaker 3: some ideas about how you might want to change it
• 8:23
  Speaker 3: or what you might need to do to tweak it.
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  Speaker 3: So it's a guide for everyone eight six six, eight
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  Speaker 3: four eight five six nine nine or legal Exchange Show
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  Speaker 3: dot com, Estate planning potholes to avoid eight six six
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  Speaker 3: eight four eight five six nine nine or legal exchange
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  Speaker 3: Show dot Com.
• 8:43
  Speaker 2: Next up, we got Jen in Worcester. Jen, you are
• 8:46
  Speaker 2: on with Todd Lutsky. Jen, are you there? This is Ken, Ken, Ken, Ken,
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  Speaker 2: You're on with Todd Lutsky.
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  Speaker 5: Okay, great.
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  Speaker 6: You know I've heard you say many times the advantage
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  Speaker 6: of putting your assets in a trust system avoid probate.
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  Speaker 6: I'm just wondering, if a will does go to probate
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  Speaker 6: and it's opened to public inspection, can you just show
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  Speaker 6: up at the city clerk at city Hall to say
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  Speaker 6: I want to see John Smith's will, Or do you
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  Speaker 6: have to show cars and tell out a farm or
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  Speaker 6: how would that work?
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  Speaker 3: No, you're absolutely right. You could just show up at
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  Speaker 3: the probate court and say I'd like to pull this
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  Speaker 3: file and take a look at it. It is public record.
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  Speaker 3: So there is all the more reasons in the world
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  Speaker 3: that you want to avoid probate. We've mentioned many of
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  Speaker 3: them over the years. Privacy, of course, is one of them.
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  Speaker 3: If you don't want your neighbor swinging by to see
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  Speaker 3: what you own, because if it's in probate, there's lots
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  Speaker 3: of You got to file an inventory and so not
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  Speaker 3: only do you put the will there, but you have
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  Speaker 3: to list all of your assets and how much they're
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  Speaker 3: worth when you pass, So there's a lot of information there.
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  Speaker 3: So avoiding probate is a big reason, not the only
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  Speaker 3: reason to do a trust of some kind, revocable or irrevocable,
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  Speaker 3: but certainly putting assets in the trust will be avoiding probates,
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  Speaker 3: so you don't have to have that that privacy problem.
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  Speaker 3: So yeah, great, great question.
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  Speaker 7: Ken.
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  Speaker 2: Let's go over to Bob in Paxton. Bob, what is
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  Speaker 2: your question for? Tom Lotsky?
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  Speaker 5: Hello, Todd, thank you for taking my call. Sure, my
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  Speaker 5: question is this, My wife and I fortunately have approximately
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  Speaker 5: one point nine million dollars in a four oh one
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  Speaker 5: K and we own our own home. We do have
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  Speaker 5: a will, but should I get it? Should we get
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  Speaker 5: a trust? And if so we kind you? So, how recommend?
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  Speaker 3: How old are you and your wife?
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  Speaker 5: Sixty eight?
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  Speaker 3: And how much is the house worth?
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  Speaker 5: Six hundred and are.
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  Speaker 3: There other investments outside of a four oh one K? No, sir,
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  Speaker 3: so you're looking at you know, about two point five
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  Speaker 3: in value. So some of the things we look at
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  Speaker 3: when we determine a question like this is basically Todd,
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  Speaker 3: what kind of a state plan you know, what would
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  Speaker 3: be right for me? Well, I look at sixty eight,
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  Speaker 3: I look at you know two point five in assets,
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  Speaker 3: and I suggest that, well, we want to make sure
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  Speaker 3: we have no death tax, so we need a trust
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  Speaker 3: to double your exemption to four million. That trust could
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  Speaker 3: be revocable, certainly. And then the other question is do
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  Speaker 3: we want to protect from the nursing home. Well, the
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  Speaker 3: only item we can protect from the nursing home currently
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  Speaker 3: is the house, which is fine, but it's also somewhat
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  Speaker 3: protected for each other with no planning. So we would
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  Speaker 3: have to get together and really iron out whether we
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  Speaker 3: do the irrevocable trust to try to protect assets from
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  Speaker 3: the nursing home, or whether we just do a revocable trust.
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  Speaker 3: But certainly one of those trusts is going to be
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  Speaker 3: right for you. But the type of assets you have
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  Speaker 3: acquire a further discussion, one that we can't do on
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  Speaker 3: the radio. But you're absolutely right the state planning at
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  Speaker 3: sixty eight is perfect timing. Again I didn't ask, but
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  Speaker 3: assuming he has children, another reason to do the plan.
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  Speaker 3: So you're right on point there, Bob. I think planning
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  Speaker 3: would be right for you. We just don't know exactly
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  Speaker 3: which trust yet, Todd.
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  Speaker 2: We got one more for you. We're going to try
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  Speaker 2: to go four for four here. Gene in Maine is
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  Speaker 2: on the line. Jean, We've only got a couple of minutes,
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  Speaker 2: so you got to be quick. But what's your question
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  Speaker 2: for Todd?
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  Speaker 7: Well, I was going to ask you about a trust,
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  Speaker 7: and your previous answer question answered half of what I
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  Speaker 7: wanted to know. Okay, I have about five million dollars
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  Speaker 7: in net net and it's all kinds of VERSI diversified
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  Speaker 7: and YouTube fun cod CD's land home. I want to
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  Speaker 7: put a trust with a reversible trust, but I want
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  Speaker 7: to have my two adult children on it also. Is
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  Speaker 7: that possible?
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  Speaker 3: So the type of trust you said, you said reversible,
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  Speaker 3: I don't know if you meant revocable or irrevocable.
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  Speaker 2: Which one did you mean?
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  Speaker 7: Well, I was asking you the question as to I
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  Speaker 7: don't have one and I mean to set one up.
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  Speaker 2: So how old are you?
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  Speaker 7: I'm eighty one years old and my wife is seventy one.
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  Speaker 3: So yes, I would say with two million dollars in assets,
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  Speaker 3: the type of planning would be just make sure we
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  Speaker 3: don't pay any death taxes.
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  Speaker 2: You're right on the bubble.
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  Speaker 3: And as a married couple, we certainly with a trust
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  Speaker 3: could double that exemption to four million, so you won't
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  Speaker 3: owe any estate taxes. So that's an easy fix. We
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  Speaker 3: can help you avoid probate when you pass away. That'll
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  Speaker 3: be an easy fix. By funding the trust. Your age
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  Speaker 3: would then trigger me to say, assuming the two million
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  Speaker 3: that you're worth includes, as you said, a home, it
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  Speaker 3: includes you know, let's say, investment accounts that are not
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  Speaker 3: retirement qualified plan accounts. So just for fun, I'll say,
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  Speaker 3: you know, a million dollar home, five hundred thousand dollars
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  Speaker 3: of investments, and five hundred thousand dollars of retirement accounts.
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  Speaker 3: If the breakdown is like that, I would say, do
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  Speaker 3: you want to protect assets from the nursing home? And
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  Speaker 3: if the answer to that is yes, then we would
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  Speaker 3: sit down and we would explore how an irrevocable trust
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  Speaker 3: would work, and yes, you could put both your children
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  Speaker 3: on as trustee of that irrevocable trust. We would put
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  Speaker 3: the assets in to get them protected from the nursing home,
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  Speaker 3: avoid taxes, and avoid probate, and you can retain the
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  Speaker 3: control over removing and replacing those kids as trustees, and
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  Speaker 3: certainly upon your passing you would have the kids listed
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  Speaker 3: as beneficiaries. I assume that's what you meant when you
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  Speaker 3: said put them on. So you're on the right track.
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  Speaker 3: I think you just need to, you know, get in
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  Speaker 3: get in front of the lawyer and learn how to
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  Speaker 3: do all these things. But yes, planning is certainly right
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  Speaker 3: for you folks.
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  Speaker 2: Mister Utski, thank you so much for joining us today.
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  Speaker 2: Always a pleasure.
• 15:07
  Speaker 1: This has been Aske Todd on the Financial Exchange Radio network.
• 15:11
  Speaker 1: Ask Todd with Todd Lutsky has been presented by Cushing
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  Speaker 1: and Dolan, serving Massachusetts and New England for more than
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  Speaker 1: thirty years, helping families with the state and tax planning,
• 15:19
  Speaker 1: Medicaid planning, and probate law. Call eight hundred three nine
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  Speaker 1: three four thousand and one or visit Cushingdolan dot com.
• 15:26
  Speaker 1: The views expressed in this segment are solely those of
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  Speaker 1: Cushing and Dolan. Armstrong Advisory does not provide any legal
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