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Caution to take when admitting someone to a nursing home · The Legal Exchange

0:01
Speaker 1: This is the Legal Exchange with Todd Lutsky from the
0:04
Speaker 1: law firm of Cushing and Dolan and Susan Powers of
0:07
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
0:31
Speaker 1: Here are your hosts, Todd Lutsky and Susan Powers.
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Speaker 2: Welcome into the Legal Exchange with Toddltsky. I'm Susan Powers,
0:42
Speaker 2: a financial advisor with the Armstrong Advisory Group, and I'm
0:45
Speaker 2: joined by Todd Lutsky, a partner with the law firm
0:48
Speaker 2: of Cushing and Dolan with a master's in taxation.
0:52
Speaker 3: Welcome Todd. How are you today?
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Speaker 4: I'm never better in you?
0:55
Speaker 3: Excellent? Thank you? What do you have for us this week.
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Speaker 4: As we approach the end of the month. Can you
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Speaker 4: believe it now? But I've got a couple of cases.
1:02
Speaker 4: A Kentucky Supreme Court case. We haven't talked about this
1:05
Speaker 4: in a while, but they do come up, and we've
1:07
Speaker 4: talked about them a lot in the past. How to
1:10
Speaker 4: sign an arbitration agreement when you enter I mean these cases.
1:13
Speaker 4: I know we've talked about them, but folks, we think
1:15
Speaker 4: the law is settled, and they keep coming up. And
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Speaker 4: this one I felt was important enough that I wanted
1:21
Speaker 4: to bring it up and mention how this works. How
1:25
Speaker 4: do you sign an arbitration agreement? Or maybe more importantly,
1:31
Speaker 4: do you even sign an arbitration agreement?
1:33
Speaker 1: Right?
1:33
Speaker 4: And why do you? Or why do you not? Why
1:36
Speaker 4: do you even have to? That's what I want to
1:38
Speaker 4: teach you here in this case, and that's what this
1:40
Speaker 4: whole Supreme Court of Kentucky case is about, because it's
1:44
Speaker 4: that important. By the way, arbitration agreements apply when you're
1:47
Speaker 4: admitting somebody to a nursing home. That's the situation going
1:50
Speaker 4: on in this case. We'll come back to that. Then
1:55
Speaker 4: we head over to Colorado and we've got an appellate
1:57
Speaker 4: court case there, kind of a case, but I think
2:00
Speaker 4: it works out. Okay. We've got an individual who is
2:05
Speaker 4: a veteran right suffered traumatic brain injury in nineteen eighty five.
2:09
Speaker 4: But then you know, he's got his house, he's paying
2:11
Speaker 4: his bills, and he's just about done, and he misses
2:13
Speaker 4: a payment on real estate taxes really through no fault
2:16
Speaker 4: of his own, and then the state files a claim
2:20
Speaker 4: and starts to take the house, the real estate house
2:22
Speaker 4: away from him. And you know, what is his recourse
2:24
Speaker 4: and what is his ability to get that house back.
2:29
Speaker 4: But that's not really why we're taking this case. We're
2:32
Speaker 4: going to take this case as to what he could
2:34
Speaker 4: have done better to stop this from happening. And I
2:37
Speaker 4: think this is going to be a really important case
2:40
Speaker 4: for planning, because planning is not just about taxes and probate,
2:44
Speaker 4: but it's how you can take care of a family,
2:46
Speaker 4: take care of yourself. And I think you're going to
2:48
Speaker 4: learn that from this case. And folks, we are at
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Speaker 4: the end of the month, so I want you to
2:52
Speaker 4: really think about this guide. Getting this guide. It's it's
2:55
Speaker 4: going to go away, but it's how to make your
2:58
Speaker 4: IRA the beneficiary of your estate and life insurance. It's
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Speaker 4: very important if you're trying to do both a state
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Speaker 4: tax planning and nursing home planning. At the same time,
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Speaker 4: because this guide will explain in conjunction with a testamentary trust,
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Speaker 4: which has also explained how doing this allows you to
3:17
Speaker 4: get not only a state tax planning benefits, nursing home
3:21
Speaker 4: protection benefits on an IRA, which is strange in and
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Speaker 4: of itself, all while not causing any adverse income tax
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Speaker 4: consequences because you have to deal with income taxes when
3:32
Speaker 4: you're dealing with an IRA. Lot of balls in the
3:35
Speaker 4: air in this guide, they're all addressed. Call and get
3:38
Speaker 4: it eight six six eight four eight five six nine
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Speaker 4: nine or Legal Exchange show dot com. You can download
3:46
Speaker 4: it there again eight sixty six eight four eight five
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Speaker 4: six nine nine or Legal Exchange Show dot com. Over
3:55
Speaker 4: to Kentucky Supreme Court case dealing with arbitration. Can you
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Speaker 4: imagine this goes all the way to Supreme Court? Anyways?
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Speaker 4: Sondra is admitted. Sondra rather admitted her husband Ray, diagnosed
4:09
Speaker 4: with Alzheimer's, to Lantern nursing home, and as a condition
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Speaker 4: of accepting him, she was told she had to sign
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Speaker 4: this arbitration agreement.
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Speaker 3: Is that not illegal anymore?
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Speaker 5: I thought Obama pretty much pretty much Okay, Well, Sondra
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Speaker 5: did not designate with what capacity she signed the agreement.
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Speaker 4: She just signed it. So during his time in there
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Speaker 4: he managed to suffer multiple falls, bed sores, significant weight loss, etc.
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Speaker 4: And then he died in August of twenty twenty. Sondra
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Speaker 4: files a suit for negligence and wrongful death. Makes sense. Lantern, however,
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Speaker 4: files a motion to compel arbitration. We don't want to
4:59
Speaker 4: go to court. We want to go arbitrate this so
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Speaker 4: pursuing the Kentucky Living Will Directive Act. Apparently Sondra has
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Speaker 4: authority to make medical decisions, signing things, signing this agreement
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Speaker 4: to admit him in such as is such a such
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Speaker 4: a decision? The Circuit Court said, no, we denied Lantern's
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Speaker 4: motion to compel arbitration, stating that this is not a
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Speaker 4: health care decision, which makes sense.
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Speaker 3: We've talked about that in the past.
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Speaker 4: They appeal. The Appellate Court affirmed the lower court shocker.
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Speaker 4: They appealed to the Supreme Court. The Supreme Court elaborated
5:45
Speaker 4: the Kentucky Living Will Directive allows a person to consent
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Speaker 4: to medical procedures, treatments, and interventions for an incapacitated person,
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Speaker 4: and signing an arbitration agreement does not amount to any
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Speaker 4: of these medical decisions. Therefore, we affirm the lower court
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Speaker 4: the appellate court, and that's the end of it. We're
6:13
Speaker 4: not going to apply the rule of arbitration here, meaning
6:20
Speaker 4: you get to go to court, right and you get
6:22
Speaker 4: to have a jury decide your case.
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Speaker 2: I'm going to need you to look this case up
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Speaker 2: and see how much they had to.
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Speaker 3: Pay at the end of the day.
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Speaker 4: Another case that does.
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Speaker 3: Another hanging chad that you've left us with.
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Speaker 4: That's what happens with these appellate court cases sometimes. Well,
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Speaker 4: actually the decision was made that the whole court case
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Speaker 4: was about whether or not the No.
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Speaker 3: I know they have to go to court.
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Speaker 2: I want the I want the results because shame on
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Speaker 2: them for wasting everybody's time and money by taking this
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Speaker 2: all the way to the Supreme Court. I know, when
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Speaker 2: they shouldn't have made her sign it anyway.
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Speaker 4: Right, Well, you're jumping ahead, Susan, just because.
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Speaker 3: You're so knowledgeable, because I'm on my box right now.
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Speaker 4: So here's how it works. What are the tips and
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Speaker 4: lessons folks? When you're faced with nursing home care. I
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Speaker 4: get it, it's an emotional time. You're signing a bunch
7:10
Speaker 4: of documents. You don't Things are thrown in front of you,
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Speaker 4: and you don't really know you know what to sign
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Speaker 4: and what not to sign. You're not probably even thinking clearly. However,
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Speaker 4: I want you to try to remember this one rule.
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Speaker 4: Who should sign? And when should we sign? And should
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Speaker 4: we sign? Number one rule. If someone tells you it's
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Speaker 4: a condition of admittance, that's not true. They are not
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Speaker 4: allowed to deny you admission to a nursing home because
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Speaker 4: you didn't sign an arbitration agreement. And that sounds like bribery, right,
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Speaker 4: it's like extortion. Yeah, so you can't you can't do that.
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Speaker 4: So first and foremost you really can say, I just
7:56
Speaker 4: don't have to sign. And by the way, even now,
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Speaker 4: if you do sign, there are rules governing the procedures.
8:03
Speaker 4: There's a notice Act that came out that governs the
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Speaker 4: procedure that you need to go through when signing this. Like,
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Speaker 4: you know, they've got to give you the property. They
8:13
Speaker 4: got to tell you what it is. They got to
8:15
Speaker 4: make sure you understand it. They got to give you
8:17
Speaker 4: time to read it alone by yourself digest it. I mean,
8:21
Speaker 4: they got to have bold letters where it says arbitration agreements,
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Speaker 4: so you can't miss it. So I mean there's certain
8:26
Speaker 4: things that they that are in this Notice Act that
8:28
Speaker 4: you have to have even if you're going to sign it. Okay,
8:33
Speaker 4: And again up to you if you want to sign it,
8:36
Speaker 4: but it's not a condition of admission. Okay, So let's
8:42
Speaker 4: see you did sign it. Well, now is it going
8:46
Speaker 4: to be enforced again? You can look at the Notice
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Speaker 4: Act to see if they followed their rules in sort
8:52
Speaker 4: of educating you about what this document is you're signing.
8:57
Speaker 4: That might be an out, but there might be an
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Speaker 4: easy you're out. Never sign it personally, right, as a
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Speaker 4: responsible party, bad idea. Never sign it as a power
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Speaker 4: of attorney, right. Remember, a power of attorney could have
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Speaker 4: language in there granting you the power to sign agreements, right,
9:20
Speaker 4: or contracts.
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Speaker 3: Which would bind them to the arbitration right.
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Speaker 4: Right, it could if it's generally contracts and this isn't
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Speaker 4: a contract, you could fall in under that category. Some
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Speaker 4: of them might actually say you can sign an arbitration agreement.
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Speaker 4: So this be mindful. If you got power of attorney,
9:38
Speaker 4: do not put DPA after your name. Guardian. I've seen
9:43
Speaker 4: cases where if you're the guardian, you could bind somebody.
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Speaker 4: Perhaps Again, I don't know exactly. That's not going to
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Speaker 4: be a carte blanche answer, but I'd stay away from it.
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Speaker 4: Signing it as a spouse that doesn't necessarily give you
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Speaker 4: the power either, unless there's a parent authority that meaning
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Speaker 4: you obviously have the authority to do it. Always sign
10:04
Speaker 4: it as a healthcare proxy, as we learn from this case,
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Speaker 4: because that is not a medical decision. It won't bind you.
10:11
Speaker 4: You'll be okay. Folks. Learn about iras and how to
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Speaker 4: get them named to your state as the beneficiary. Get
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Speaker 2: You've been listening to Todd Lutsky, 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
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Speaker 2: more to cover when we return on the legal exchange
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Speaker 2: Welcome back into the legal exchange with Todd Latsky. I'm
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Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
14:02
Speaker 2: and I'm joined by Todd Lutsky, a partner with the
14:05
Speaker 2: law firm of Cushing A. Dolan with a master's in taxation.
14:09
Speaker 2: Where we headed now, Todd.
14:10
Speaker 4: We are going to go to Colorado, Okay, in appellate
14:16
Speaker 4: court case. They are dealing with a disabled individual and
14:19
Speaker 4: real estate. What's going on here? Air Force veteran suffered
14:25
Speaker 4: traumatic brain injury in nineteen eighty five serving as a
14:29
Speaker 4: military policeman one hundred percent service connected disability. I will
14:36
Speaker 4: hard stop. He should get whatever, absolutely whatever he needs. Okay.
14:43
Speaker 4: So then he purchases property in nineteen eighty eight, and
14:47
Speaker 4: he pays off the debt in twenty eighteen. Nice, did
14:52
Speaker 4: what you're supposed to do. Twenty seventeen. However, he missed
14:56
Speaker 4: a real estate tax payment because the loan provider stop
15:00
Speaker 4: opt collecting the funds for it for whatever reason. You know,
15:03
Speaker 4: the loan provider, can you can have it in your
15:05
Speaker 4: mortgage where it pays the real estate tax yeah, yeah,
15:08
Speaker 4: so it somehow didn't do that for one year. Okay,
15:15
Speaker 4: So what happens a lean by the state attaches in
15:20
Speaker 4: twenty eighteen, and then that they sold the lean in
15:25
Speaker 4: twenty eighteen to this LT income group at a public auction.
15:30
Speaker 4: So I guess the state can sell your lean. I
15:32
Speaker 4: didn't even know that. And it's it's in Colorado, so
15:35
Speaker 4: state specific, folks, please be mindful. In March of twenty
15:40
Speaker 4: twenty two, after David, he's still alive, right, So, after
15:45
Speaker 4: David failed to act within three years, there's a statutory
15:48
Speaker 4: right whenever the state takes your case again, state specific,
15:53
Speaker 4: a three year statutory right to redeem the property from
15:57
Speaker 4: el you know, if you want to. So he then
16:00
Speaker 4: brings an action of quiet title, saying, well, listen, you
16:03
Speaker 4: didn't act in three years, so David, you're going to
16:06
Speaker 4: lose your house. David argued, well, wait a minute, I'm
16:10
Speaker 4: disabled at the time. It says, you know, if you're
16:12
Speaker 4: disabled at the time, you then have nine years to
16:16
Speaker 4: redeem the property from the date of the transfer of
16:22
Speaker 4: the deed was recorded. So nine years from the date
16:25
Speaker 4: the transfer deed was recorded. Oh, the district court. So
16:30
Speaker 4: now we're in court. The district Court says David had
16:34
Speaker 4: shown by clear and convincing evidence that he was disabled
16:38
Speaker 4: one hundred percent possibility. I was pretty clear that he
16:42
Speaker 4: was disabled and lacked the capacity to act for himself
16:48
Speaker 4: and manage his affairs. Thus he's entitled to the nine
16:52
Speaker 4: year redemption statute statutory rule. So step back LT Income Inc. Well,
17:02
Speaker 4: they didn't. They appealed to the appelled court. The LT
17:07
Speaker 4: Income group argued that disability applies only to minors or
17:13
Speaker 4: mentally incapacitated or adjudicated incapacitated by the court, and then
17:18
Speaker 4: it goes on to say that the court affirmed the
17:22
Speaker 4: lower court. So lt Inc. You lose, stating that your
17:27
Speaker 4: narrow definition of disability is not consistent with case law
17:32
Speaker 4: and the statute. If they meant for it to apply
17:35
Speaker 4: only to folks that were already under a protective order,
17:38
Speaker 4: so to speak, they would have said that in the
17:40
Speaker 4: statue he is a loser.
17:42
Speaker 3: So I'm back on my soapbox here.
17:47
Speaker 4: So it turned out to be right that you know
17:50
Speaker 4: LT Inc is wrong and they and David in this
17:53
Speaker 4: case are disabled. Veteran has has nine years to file
17:57
Speaker 4: a claim to get redeem his property. So I just
17:59
Speaker 4: have to pay the back real estate taxes I'd imagine, yeah,
18:02
Speaker 4: and redeem his property an.
18:04
Speaker 2: He paid his mortgage. The mortgage companies stand out the
18:07
Speaker 2: ESCRO payments.
18:08
Speaker 4: It seems like there's really the mortgage company's fault. And
18:11
Speaker 4: again that's one issue. We're going to talk about what
18:14
Speaker 4: the lessons are. We can learn from that in a minute.
18:17
Speaker 4: But in reality, I think the bigger issue is we
18:20
Speaker 4: have other assets other than real estate to deal with
18:22
Speaker 4: in our lives. Many people have iras and life insurance
18:25
Speaker 4: and this is the end of the month, folks, it's
18:27
Speaker 4: the last chance to get this guide packed full of
18:30
Speaker 4: information on how naming your IRA a beneficiary of your
18:34
Speaker 4: estate and or life insurance depending on the type to
18:39
Speaker 4: your estate as the beneficiary can not only shelter it
18:43
Speaker 4: from future estate taxes, which are two big hurdles as well,
18:49
Speaker 4: it can protect them from the cost of nursing home
18:53
Speaker 4: care following the death of the participant in the IRA,
18:55
Speaker 4: or the life insurance owner for the surviving spouse from
18:59
Speaker 4: the nursing home with no waiting period. And it can
19:03
Speaker 4: get all done coupling it with a testamentary trust without
19:07
Speaker 4: causing any income or estate tax negative consequences. Folks, that's
19:13
Speaker 4: a lot of balls in the air, but it's worth
19:15
Speaker 4: it learn how this works because they're tricky assets eight
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19:33
Speaker 3: So how could he have avoided all of this nonsense?
19:36
Speaker 4: Yeah, I think a lot better planning probably would have
19:38
Speaker 4: been in order than doing nothing. I mean again, I mean,
19:41
Speaker 4: I get it. If you're disabled, Right, if you're disabled
19:44
Speaker 4: and you have a family and you want those families
19:47
Speaker 4: to you want your family members to get these assets,
19:50
Speaker 4: and you want them to go to them, then you
19:52
Speaker 4: know it's it's sort of a red flag for you. Right,
19:55
Speaker 4: planning does more than just avoid probate and p from
20:00
Speaker 4: the nursing home. Right, you need to think about this
20:03
Speaker 4: if you're doing it. So first, if the property were
20:07
Speaker 4: in a trust and you're disabled like he is, right,
20:11
Speaker 4: first of all, the fact that you're disabled tells me
20:15
Speaker 4: I need to do planning number one. Number two, I
20:18
Speaker 4: might be getting some kind of dis I might end
20:20
Speaker 4: up in a nursing home. Maybe the type of trust
20:23
Speaker 4: that I need to do should be irrevocable. So, I mean,
20:25
Speaker 4: those are kind of red flags that make me think
20:28
Speaker 4: irrevocable trust planning. But if we were to put the
20:31
Speaker 4: trust property into the trust and it's irrevocable and you're disabled,
20:36
Speaker 4: you know, likely there would be a trustee appointed, especially
20:40
Speaker 4: if it's an irrevocable trust, and the trustee then would
20:43
Speaker 4: be responsible for maintaining the property, yes, right, therefore paying
20:47
Speaker 4: the bills, the taxes right upkeep, et cetera. And so
20:53
Speaker 4: he would not have missed this payment. So if the
20:57
Speaker 4: real if there's a trustee involved, again, more than just
21:00
Speaker 4: probate in taxes, real income taxes or a state taxes,
21:05
Speaker 4: this is caring for the property. So I mean, I
21:08
Speaker 4: know when I serve as trustee, I have to pay
21:11
Speaker 4: the real estate taxes. So we do that. We make
21:14
Speaker 4: sure those payments are made, So I think that serves
21:17
Speaker 4: us some protection. Now back on the irrevocable side, right,
21:21
Speaker 4: So when you're doing this, you get the sense that
21:26
Speaker 4: you know he was. People say, when should I do
21:28
Speaker 4: an irrevocable trust? Right? How do I know? Well? I
21:31
Speaker 4: always say age is important sixty years and up, you know,
21:34
Speaker 4: because it takes five years to protect the assets from
21:37
Speaker 4: a nursing home. However, if you're disabled or you have
21:41
Speaker 4: early diagnosis of like MS or some other mobility impacting illness,
21:48
Speaker 4: right then really it doesn't really matter how old you are.
21:52
Speaker 4: Right at that point you say you ought to get
21:54
Speaker 4: this five year clock running right away. So, yes, a important,
22:00
Speaker 4: but I think disability is also important.
22:02
Speaker 3: Yeah, your health condition is certainly a factor can dictate
22:06
Speaker 3: what to do regardless of age.
22:09
Speaker 4: Yeah. So now once we get the trust in there,
22:12
Speaker 4: Remember trust could have a mortgage on it. This did,
22:15
Speaker 4: That's okay. You can still people say, can I put
22:18
Speaker 4: property in a trust with a mortgage on it? Well, again,
22:21
Speaker 4: older folks don't always have mortgages on it, but some
22:24
Speaker 4: of them still do. But if there's you know, if
22:27
Speaker 4: there's one or you or you want to you don't
22:30
Speaker 4: have a mortgage, but you want to keep the right
22:32
Speaker 4: to borrow against it like a helock, then you've got
22:35
Speaker 4: to get the helock set up before you put the
22:37
Speaker 4: asset in the trust. And so if there is a mortgage,
22:41
Speaker 4: I'm going to talk about what to do. And if
22:43
Speaker 4: you want to be able to borrow, you got to
22:46
Speaker 4: do this in advance, get that helock before you put
22:49
Speaker 4: it in. Transferring encumbered property into the trust will not
22:53
Speaker 4: trigger the dow on sale clause if you reserve a
22:56
Speaker 4: life estate in it. So by reserving that life estate,
22:59
Speaker 4: you won't have to tell the bank and they can't
23:01
Speaker 4: call the note. So you get to keep your existing mortgage.
23:05
Speaker 4: You just can't get a new one, Okay, but so
23:07
Speaker 4: what you at least have all the options available to
23:10
Speaker 4: you by doing this, so.
23:12
Speaker 3: People don't need it that stage when they're doing that.
23:14
Speaker 4: I just wanted people to realize that just because you
23:17
Speaker 4: have a mortgage, like in this case, you could still
23:19
Speaker 4: put it in the trust. That wouldn't have stopped David
23:22
Speaker 4: in this case from putting it in a trust. Folks.
23:25
Speaker 4: That's one idea for the irrevocable trust for life insurance.
23:28
Speaker 4: But these irrevocable trusts can be used as the beneficiary
23:31
Speaker 4: of your IRA and life insurance. Call and get the
23:34
Speaker 4: guide eight six six, eight four eight five six nine
23:38
Speaker 4: to nine.
23:39
Speaker 2: You've been listening to Todd Lutski, a partner with the
23:41
Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
23:44
Speaker 2: financial advisor with the Armstrong Advisory Group.
23:47
Speaker 3: And Todd will be.
23:48
Speaker 2: Answering your listener questions next on the Legal Exchange with
23:52
Speaker 2: Todd Lutsky.
23:53
Speaker 1: Every dollar you've saved in retirement accounts in life insurance
23:56
Speaker 1: tells a story, a story of hard work, smart Joe
24:00
Speaker 1: and the future you envision for your family. One way
24:03
Speaker 1: to help that story end well is to make a
24:05
Speaker 1: beneficiary choice that does more. This month's free guide from
24:08
Speaker 1: Cushing and Dolan IRA and Life Insurance Planning Estate tax
24:12
Speaker 1: Strategies in Nursing Home Protection explains how naming your estate
24:15
Speaker 1: is the beneficiary of your IRA or life insurance can
24:18
Speaker 1: at a layer of tax efficiency in nursing home protection
24:21
Speaker 1: while still allowing your spouse access when it matters. It's
24:24
Speaker 1: about keeping more of what you've built, working for your
24:27
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24:30
Speaker 1: your free copy today by calling eight sixty six eight
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Speaker 1: four eight five six nine nine. That's eight six six
24:36
Speaker 1: eight four eight five six nine nine, or you can
24:38
Speaker 1: request it online from our website Legal Exchange showed dot com.
24:42
Speaker 1: The proceeding was paid for and the views expressed are
24:44
Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan and
24:46
Speaker 1: Ormstrong Advisory may contact you offering legal or investment services.
24:49
Speaker 1: Cushing and Dolan and Armstrong Advisory do not endorse each
24:52
Speaker 1: other and are not affiliated.
24:53
Speaker 7: Mark Vonner is the CEO of Veterans Development Corporation. Mark
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Speaker 6: from the Armstrong Advisory Group. We're hosting two financial seminars
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Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
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Speaker 1: registered investment advisor. Nothing in the ad or in any
26:43
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
26:46
Speaker 1: your own financial tax into state planning advisors before making
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Speaker 1: any investment decisions. Armstrong may contact you to offer investment
26:52
Speaker 1: advisory services. You're listening to the Legal Exchange and it's
26:56
Speaker 1: time for Ask Todd, the segment where Tod will answer
27:00
Speaker 1: your questions about anything and everything that's included in the
27:03
Speaker 1: estate planning process. Once again, here's Todd Lutsky and Susan Powers.
27:10
Speaker 2: Welcome back. Tod, have a few questions from listeners for you.
27:13
Speaker 2: First question comes from Tony and Rockland Mass and Tony writes,
27:17
Speaker 2: years ago, I created a Nominee reality trust, listing one
27:21
Speaker 2: of my children as the trustee and all four of
27:23
Speaker 2: my children as beneficiaries, ought Rowe. After listening to a
27:27
Speaker 2: recent show, I didn't realize that my children technically own
27:31
Speaker 2: my home and vacation home. Now what can I do
27:35
Speaker 2: to fix this? I have a good relationship with three
27:37
Speaker 2: of my kids, but the relationship is strained.
27:40
Speaker 3: With the fourth. Yeah, so Thanksgiving's going to be awkward.
27:47
Speaker 4: Awkward. Yeah, so this is a problem with nomine realty trust, folks.
27:51
Speaker 4: I remember we've given out a guide in the past
27:53
Speaker 4: where we sort of demystify all the trust and this
27:56
Speaker 4: is the one that leads the page. If you will
27:58
Speaker 4: leave is the first topic of first trust I talk about. Yeah,
28:02
Speaker 4: the problem is it's not really a trust because you
28:05
Speaker 4: see that word nominee realty. Trust means provided the languages
28:10
Speaker 4: in there, that the trustees have no power to act
28:15
Speaker 4: over the trust assets. The beneficiaries do. They can only
28:20
Speaker 4: the trustee can only act at the direction of the beneficiaries.
28:24
Speaker 4: Well that's a problem, right, So that means that the
28:29
Speaker 4: four kids are really the owners of the property, right
28:32
Speaker 4: because they're the trust he can't do any trust.
28:35
Speaker 3: Even though it's beneficiary.
28:37
Speaker 4: He's not dead yet, right, But the language in the
28:39
Speaker 4: document says that the trustee cannot act unless directed by
28:43
Speaker 4: the beneficiaries, So that sort of shifts the ownership or
28:49
Speaker 4: the control to the beneficiaries. So because of that, like
28:55
Speaker 4: let's say, Tony says, well, geez, I don't really want
28:59
Speaker 4: my fourth kid to share in this because my relationship
29:03
Speaker 4: is strained with that child, so I don't really want
29:06
Speaker 4: to leave him this this asset. Yeah, well, you can't
29:11
Speaker 4: change it.
29:11
Speaker 3: The fourth child would have to agree to it.
29:13
Speaker 4: Right, likely it's going to say that it's requiring all
29:16
Speaker 4: beneficiaries to direct the trustees. So you know, you're probably
29:21
Speaker 4: stuck because I don't think you're going to get unanimous
29:24
Speaker 4: for kids to say, yeah, I'm happy to fix this. Remember,
29:28
Speaker 4: these trusts are amendable, they are revocable. They are changeable
29:33
Speaker 4: at the direction of the beneficiary if.
29:35
Speaker 3: You get the permission of your children.
29:38
Speaker 4: And so at this point, you know, if you had
29:41
Speaker 4: kids that were fine, you would say, look, let's just kids.
29:43
Speaker 4: Will authorize the creation of a new schedule of beneficiaries
29:47
Speaker 4: naming mom and dad. And then now mom and dad
29:50
Speaker 4: are the beneficiaries. And then we as trustees will transfer
29:53
Speaker 4: the property out to mom and dad and get rid
29:55
Speaker 4: of this realty trust. And then mom and dad can
29:57
Speaker 4: take that property and transfer it into their own estate
30:00
Speaker 4: planning documents, whether it be a revocable trust or whether
30:05
Speaker 4: it be an irrevocable trust. They're going to do their
30:08
Speaker 4: estate plan and it's not going to include this realty trust.
30:12
Speaker 2: And then they can exclude the fourth child if they
30:14
Speaker 2: wanted to. So, if everyone decides to guilt the fourth
30:18
Speaker 2: child into this and the fourth child does agree, it
30:20
Speaker 2: is possible to fix this.
30:23
Speaker 4: Okay, So if the fourth child agrees, then yes, it
30:27
Speaker 4: is possible to easily possible to fix this.
30:29
Speaker 2: You could easily hold over their head, we have all
30:32
Speaker 2: these other assets. But I'm sure your siblings will be
30:35
Speaker 2: happy to split your share.
30:37
Speaker 4: I think that's where they might have to go, right
30:40
Speaker 4: with this, because if this is just one asset and
30:43
Speaker 4: they and they in fact do have a lot of
30:45
Speaker 4: other wealth, yeah, that's that's available to still go four ways.
30:50
Speaker 4: You might want to dangle that little carrot out there.
30:53
Speaker 4: But if they don't, If they don't, it's going to
30:56
Speaker 4: be a lot harder. I mean, if the house is
30:57
Speaker 4: their whole estate and there's not a lot of other assets. No,
31:01
Speaker 4: but if they don't agree, they don't they do. If
31:03
Speaker 4: they don't agree, they don't own the house anymore. I
31:06
Speaker 4: mean the other siblings are gonna have to beat up
31:08
Speaker 4: their brother. Yeah, they come out in the recess, in
31:12
Speaker 4: the parking lot out back. I don't know, but I
31:14
Speaker 4: mean that's a problem, right, that's a problem.
31:16
Speaker 3: That's why you don't give your stuff away.
31:18
Speaker 4: Yeah, so it's it's problematic. But this is just one
31:23
Speaker 4: kind of trust, Folks that in the guide this month,
31:26
Speaker 4: we're talking about something strange. You don't hear about a
31:29
Speaker 4: lot of testamentary trust different than a nominee realty trust.
31:33
Speaker 4: It's a trust built into your will and it's a
31:35
Speaker 4: trust that you need in place if you want to
31:39
Speaker 4: learn how to protect your IRA and your life insurance
31:42
Speaker 4: from the cost of long term care and reduce the
31:45
Speaker 4: state taxes at the same time. That guide. This guide
31:49
Speaker 4: explains that trust, and it explains that you can do
31:52
Speaker 4: this with these two items and save income no adverse
31:56
Speaker 4: income tax consequence, shelter the assets for a state taxes,
32:01
Speaker 4: and protect them from the nursing home all at the
32:04
Speaker 4: same time. It's the end of the month. It's the
32:06
Speaker 4: last chance to get this guide. Folks, learn how these
32:09
Speaker 4: things work. There's a lot of information, a lot of
32:12
Speaker 4: stuff going on here eight six six eight four eight
32:16
Speaker 4: five six nine nine or Legal Exchange Show dot com
32:20
Speaker 4: and you can learn the rules on how to do
32:22
Speaker 4: this eight six six eight four eight five six ninety
32:26
Speaker 4: nine or Legal Exchange Show dot com.
32:30
Speaker 2: Our last question comes from Maryland in Newport, Rhode Island,
32:33
Speaker 2: and Maryland writes, I am remarried and together my husband
32:36
Speaker 2: and I have five children, including his adopted child. We
32:40
Speaker 2: have become estranged with his adopted child. I've been trying
32:44
Speaker 2: to get my husband to do some estate planning, but
32:46
Speaker 2: it keeps putting it off. If something happens to us
32:50
Speaker 2: both without a trust in place, how will our assets
32:53
Speaker 2: be divided? Will his adopted child be included? What is
32:58
Speaker 2: the best way to handle this from a lead perspective?
33:02
Speaker 4: Yeah, so no planning. The best way to handle it
33:05
Speaker 4: is to plan. So you're right on, Susan. I think
33:07
Speaker 4: we need to focus on the planning first. That's really
33:11
Speaker 4: the best to go. Now they're saying what happens when
33:14
Speaker 4: they're both dead?
33:15
Speaker 3: Yep, again, something happens to both of them at the
33:18
Speaker 3: same time. I don't know.
33:20
Speaker 2: She doesn't specify what kind of trauma's coming down the pipe.
33:23
Speaker 4: And so I think if we're going to answer this
33:24
Speaker 4: for folks, the reality of life is that no, they're
33:28
Speaker 4: both not going to die at the same at the
33:29
Speaker 4: same time. So I think we have to think of
33:31
Speaker 4: the bigger picture here. As one dies and the other
33:34
Speaker 4: one dies, So what's going to happen here? If there's
33:37
Speaker 4: no planning and they're married and one dies, you have
33:41
Speaker 4: to look at how the assets are owned. So if
33:44
Speaker 4: there's no will, no estate planning, then you simply look
33:48
Speaker 4: at asset ownership. Example, the home, Oh it was joint
33:51
Speaker 4: with the spouse. Oh, okay, then it passes automatically to
33:56
Speaker 4: the spouse.
33:57
Speaker 3: So if she dies, everything's going to him.
33:59
Speaker 4: If it's joint, everything would go to him, which means
34:02
Speaker 4: you want me to have her die first.
34:04
Speaker 3: Have her die for us.
34:04
Speaker 2: You can play out the string of what happens to
34:07
Speaker 2: his kids ian her kids, because they're not they don't
34:10
Speaker 2: have any shared children.
34:12
Speaker 4: That's right. So let's say she dies first. If it's joint,
34:14
Speaker 4: the house goes to him. If they have joint bank accounts,
34:17
Speaker 4: the joint bank account goes to him, The joint investment
34:19
Speaker 4: account goes to him. Perhaps an IRA has a designated
34:23
Speaker 4: beneficiary him. Yeah, well we avoided probate because of the
34:28
Speaker 4: ownership arrangement. The joint ownership arrangement avoided probate. The designated
34:33
Speaker 4: beneficiary on the IRA avoided probate. There's no estate tax planning.
34:38
Speaker 4: So if they're worth more than let's go they're in
34:41
Speaker 4: Rhode Island, I forget the exemption. Rhode Island's like seventeen
34:44
Speaker 4: one point seven million, one point eight million, something like that. Yeah,
34:47
Speaker 4: something like that, close to one point nine. You know,
34:50
Speaker 4: if they're worth more than that, when the survivor dies,
34:52
Speaker 4: there will be a state taxes do not federal but state.
34:56
Speaker 4: So we've avoided probate on the first death. We've done
34:59
Speaker 4: no estate planning, so there could be a state taxes
35:01
Speaker 4: on the second death. But more importantly, I think wife
35:06
Speaker 4: odds are pretty good that if he doesn't have any
35:08
Speaker 4: planning in place and dies when you're here, he's not
35:11
Speaker 4: going to have it when he's alone. And then when
35:14
Speaker 4: he dies, it's going to be who owns the assets.
35:18
Speaker 4: So now, since your kid's wife are not his kids,
35:22
Speaker 4: even if he dies with no will, the intestate succession
35:27
Speaker 4: statute will push those assets to his next closest next
35:32
Speaker 4: of kin.
35:32
Speaker 3: Would that include his adopted child?
35:35
Speaker 4: I don't know the statute in Rhode Island, but I
35:38
Speaker 4: think you know adoption usually means that they're your child,
35:42
Speaker 4: So yeah, the adopted child could get it, and more importantly,
35:45
Speaker 4: his kids would get it, and there not enough her
35:48
Speaker 4: kids would get it because they're not his kids. Those
35:52
Speaker 4: are step kids to him, and step kids are not
35:56
Speaker 4: legal beneficiaries.
35:58
Speaker 2: And if he dies, she could do planning, but then
36:00
Speaker 2: his kids could be out.
36:02
Speaker 4: Yeah, if you flip it around the other way, everything
36:04
Speaker 4: would go to her and the exact same thing would result.
36:07
Speaker 4: But in the opposite direction, so his adopted child and
36:12
Speaker 4: his kids would be gone.
36:13
Speaker 3: Yeah, he needs to understand the reality of this.
36:16
Speaker 4: He does. I mean unless they want to sit down
36:17
Speaker 4: and do the right thing. So, folks, that's part of planning.
36:21
Speaker 4: By not planning, it's a disaster. Learn how. Get this
36:25
Speaker 4: guide and learn how to plan, especially for two assets,
36:28
Speaker 4: IRA's and life insurance eight six six eight four eight
36:33
Speaker 4: five six nine nine or Legal Exchange Show dot com.
36:37
Speaker 4: It is the end of the month, folks, so call
36:39
Speaker 4: and get it.
36:39
Speaker 2: If you have a question you would like to ask Todd,
36:42
Speaker 2: visit his website Legal Exchange Show dot com and click
36:45
Speaker 2: on the ass Tod tab. Maybe I'll be able to
36:48
Speaker 2: read his question on your question on the air, and
36:50
Speaker 2: hopefully his answer will stop you from becoming one of
36:53
Speaker 2: his next real life stories. You've been listening to Todd Letski,
36:58
Speaker 2: a partner with a law firm of Sheian Dolan. I'm
37:01
Speaker 2: Susan Powers, a financial advice for the Armstrong Advisory Group.
37:05
Speaker 2: We'll be back with more after this quick break on
37:07
Speaker 2: the Legal Exchange with Todd Lutsky.
37:10
Speaker 1: Every dollar you've saved in retirement accounts and life insurance
37:13
Speaker 1: tells a story a story of hard work, smart choices,
37:17
Speaker 1: and the future you envision for your family. One way
37:20
Speaker 1: to help that story end well is to make a
37:22
Speaker 1: beneficiary choice that does more. This month's free guide from
37:25
Speaker 1: cushingon Dolan, IRA and Life insurance Planning Estate tax Strategies
37:29
Speaker 1: in Nursing Home Protection explains how naming your estate is
37:32
Speaker 1: the beneficiary of your IRA or life insurance can at
37:35
Speaker 1: a layer of tax efficiency in nursing home protection while
37:38
Speaker 1: still allowing your spouse access when it matters. It's about
37:41
Speaker 1: keeping more of what you've built working for your loved
37:44
Speaker 1: ones now and in the years to come. Get your
37:46
Speaker 1: free copy today by calling eight six six eight four
37:50
Speaker 1: eight five six nine nine. That's eight six six eight
37:53
Speaker 1: four eight five six nine nine, or you can request
37:55
Speaker 1: it online from our website legal exchange show dot com.
37:59
Speaker 1: The proceeding s paid for in the views expressed are
38:01
Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan d
38:03
Speaker 1: Ormstrong Advisory may contact you offering legal or investment services.
38:06
Speaker 1: Cushing and Dolan and Armstrong Advisory do not endorse each
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39:28
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39:30
Speaker 8: Join us at Margaritaville Resort, Cape cod on October ninth,
39:34
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39:36
Speaker 8: October sixteenth. Call eight hundred three nine three four zero
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Speaker 8: zero one to reserve your seat. We'll talk about how
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Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
40:00
Speaker 1: registered investment advisor. Nothing in the ad or in any
40:02
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
40:05
Speaker 1: your own financial, tax into state planning advisors before making
40:07
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
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40:11
Speaker 9: This is Michael Valila, adjudent of the Disabled American Veterans
40:14
Speaker 9: Department of Massachusetts. We focus on the people returning from service,
40:18
Speaker 9: not their specific illness or injury. Our number one goal
40:21
Speaker 9: is to make sure our veterans have the necessary services
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Speaker 9: they need, be it physical, emotional, or financial, so that
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Speaker 9: their transition can be seamless. You can help our great
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40:35
Speaker 9: visiting dav five k dot Boston. That's dav five k
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40:41
Speaker 1: Your tune to the Legal Exchange with Todd Lutsky. If
40:44
Speaker 1: you are a loved one needs a nursing homestay, call
40:47
Speaker 1: Todd right now at eight sixty six eight four eight
40:49
Speaker 1: five six ninet nine and let him make sure your
40:51
Speaker 1: assets are protected. That's eight six six eight for eight
40:54
Speaker 1: five six nine nine, or visit him online at Legal
40:58
Speaker 1: Exchange show dot com.
41:01
Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
41:04
Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
41:08
Speaker 2: and I'm joined, of course by Todd Lutsky, a partner
41:11
Speaker 2: with the law firm of Cushing and Dolan with a
41:14
Speaker 2: master's in taxation. So, Todd, I have another real life
41:18
Speaker 2: story of my own, and this is not one of
41:22
Speaker 2: your clients. It's one of my clients. So, married couple
41:27
Speaker 2: seventy five and seventy four. The wife was recently diagnosed
41:31
Speaker 2: with pancreatic cancer. Kind of a grim prognosis, as is
41:36
Speaker 2: with that kind of a diagnosed.
41:37
Speaker 4: Yeah, for sure.
41:38
Speaker 2: So they have around two million in assets, with a
41:42
Speaker 2: million in real estate, in around two hundred thousand each
41:45
Speaker 2: in iras, and then six hundred or so in other
41:48
Speaker 2: investments in bank accounts. They created and funded revocable trusts
41:54
Speaker 2: years ago, one for each of them. What is it
41:58
Speaker 2: they should be thinking about now now that it's likely
42:02
Speaker 2: that the wife does not have long to live, what
42:05
Speaker 2: should they be doing?
42:06
Speaker 4: So this is actually a really interesting case and a
42:11
Speaker 4: good one, and I think one that might involve a
42:15
Speaker 4: lot of people, a lot of listeners that have done
42:18
Speaker 4: their estate planning years ago and never got around to
42:23
Speaker 4: just calling and saying I'd like to check in with
42:25
Speaker 4: my estate planning attorney and find out, you know, do
42:28
Speaker 4: I need to update? And by the way, I got
42:30
Speaker 4: to tell you, I get a lot of clients, a
42:31
Speaker 4: lot of you folks that are my clients listening out there.
42:34
Speaker 4: You do call and you do say I'm checking in,
42:37
Speaker 4: So I do know I get those calls and maybe
42:41
Speaker 4: this person, just this group hasn't gotten around to checking up.
42:46
Speaker 4: Maybe they did their plan fifteen years ago. They were
42:48
Speaker 4: much younger, like sixty years old, and that's why they
42:51
Speaker 4: did revocable trust planning, and now they need irrevocable trust planning.
42:57
Speaker 4: Maybe we can ask them if they do, what do
43:01
Speaker 4: we do? Well, we have a really big opportunity here.
43:05
Speaker 4: I don't want to make light of the fact that
43:07
Speaker 4: her prognosis is grim, but that kind of a prognosis
43:11
Speaker 4: does lead to planning opportunities for people who didn't plan before.
43:17
Speaker 4: What do I mean Usually pancreatic cancer doesn't mean she's
43:22
Speaker 4: not competent.
43:23
Speaker 3: No, she's definitely still competent.
43:25
Speaker 4: Yeah, So it's just as the mental part is completely fine.
43:29
Speaker 4: So what I would do is bring them in. They
43:31
Speaker 4: would need to learn now how we're going to change
43:34
Speaker 4: to irrevocable trust planning, Okay, And I would probably suggest
43:39
Speaker 4: that is it a million dollars? So they have two
43:42
Speaker 4: million in assets. One million is in the home. So
43:46
Speaker 4: I definitely want to put the home into the wife's right.
43:52
Speaker 4: The wife's name, she's the one in the pancreatic cancer. Yes,
43:55
Speaker 4: put it in her name one hundred percent. We're going
43:57
Speaker 4: to get there, so one hundred percent to wife. Then
44:02
Speaker 4: I would probably say that two million in assets, so
44:06
Speaker 4: six hundred thousand of non IRA, I'd probably put that
44:11
Speaker 4: in wife's name. So now wife has one point six
44:15
Speaker 4: and she's got a two hundred thousand dollars IRA. Yes,
44:18
Speaker 4: so wife has one point eight The IRA has to
44:21
Speaker 4: stay in her name, but the other items need to
44:25
Speaker 4: be retitled one hundred percent to the wife, which there's
44:30
Speaker 4: no gift tax there because they're married individually, her name individually,
44:33
Speaker 4: no trust, her name individually. And then the IRA we
44:39
Speaker 4: have to change the beneficiary to be the estate of her. Okay,
44:46
Speaker 4: So now we've got a total of one point eight
44:49
Speaker 4: million that's going to be included when she dies for
44:53
Speaker 4: estate tax purposes, and it will be sheltered for a
44:57
Speaker 4: state tax purposes. But there's a whole lot of other
45:00
Speaker 4: benefits and only one negative that comes from this, and
45:03
Speaker 4: I'm gonna explain that in just a minute, but I
45:05
Speaker 4: want to mention it's the end of the month, folks,
45:07
Speaker 4: it's the last chance to get this guide learn how
45:10
Speaker 4: to deal with like we are going to learn here
45:13
Speaker 4: how to deal with her IRA. His IRA and any
45:16
Speaker 4: life insurance when you're trying to do both estate tax
45:19
Speaker 4: planning nursing home protection at the same time. By getting this,
45:24
Speaker 4: it's going to understand help you understand the testamentary trust
45:28
Speaker 4: and how that works with these two items, and all
45:32
Speaker 4: the while will reduce your estate taxes and not cause
45:37
Speaker 4: any adverse income tax consequences. So a lot of issues
45:42
Speaker 4: going on with this guide, but it's super helpful in
45:44
Speaker 4: your planning. Call and get it. End of the Month
45:47
Speaker 4: eight six six eight four eight five six nine nine
45:51
Speaker 4: or Legal Exchange Show dot com again eight six six
45:55
Speaker 4: eight four eight five six nine nine or Legal Exchange
45:59
Speaker 4: Show dot com. It is the end of the month, folks.
46:02
Speaker 2: I forgot to mention Todd when you when I was
46:04
Speaker 2: laying out this case for you. They she also has
46:07
Speaker 2: some life insurance. It's not a big amount, I want
46:08
Speaker 2: to say, it's like one seventy five.
46:11
Speaker 3: It's definitely less than two hundred.
46:12
Speaker 4: Thousand, and that's fine. What we can address that in there.
46:16
Speaker 4: So that's going to bring her a pretty darn close
46:17
Speaker 4: to the two million dollars store in her estate. Let's
46:20
Speaker 4: just call it, you know, one fifty. That puts her
46:22
Speaker 4: at one million, nine fifty.
46:23
Speaker 3: Yeah.
46:24
Speaker 4: So so now what I would by the way that
46:28
Speaker 4: life insurance, we would also have to change the designated
46:30
Speaker 4: beneficiary to be the estate of her. Okay, so now
46:34
Speaker 4: I've got two items, the IRA and the life insurance
46:37
Speaker 4: designated beneficiary estate of Be mindful folks when we're when
46:42
Speaker 4: you're thinking about doing this. The life insurance, no problem,
46:47
Speaker 4: doesn't matter, any age, doesn't matter, any nothing. You can
46:50
Speaker 4: just name the estate the beneficiary. However, the IRA, you
46:54
Speaker 4: do need to look at their age before you do this,
46:59
Speaker 4: and in this case, you have to be at least
47:02
Speaker 4: seventy three years of age, which is the required beginning
47:05
Speaker 4: day to take minimum withdrawals. If you are, then it's
47:09
Speaker 4: okay to name the estate the beneficiary. Here we can
47:13
Speaker 4: we're above seventy five and seventy four. Mindful that if
47:17
Speaker 4: you don't, if you're not at that age and I
47:23
Speaker 4: before reaching that age, then the minimum distributions coming out
47:28
Speaker 4: will be over five years.
47:31
Speaker 3: Yeah, so you're gonna be really careful with that you do.
47:33
Speaker 4: But also I'm gonna throw another caveat out there. There's
47:37
Speaker 4: only a two hundred thousand dollars IRA here, So two
47:39
Speaker 4: hundred thousand over five years is not really going to
47:42
Speaker 4: cause a huge income tax problem.
47:44
Speaker 3: But if you have a million dollar IRI or a
47:46
Speaker 3: two million dollar IRA, I'm.
47:48
Speaker 4: Going to add that caveat to this. I say, you
47:50
Speaker 4: should at least be seventy three years of age before
47:52
Speaker 4: you do this. But if your IRA is not too
47:55
Speaker 4: large and the five year payout is not going to
47:58
Speaker 4: cause a huge income tax problem, well then you can
48:01
Speaker 4: do it at any age. Yeah, So keep that in mind.
48:05
Speaker 4: And there's probably a lot of people that have, you know,
48:08
Speaker 4: five hundred thousand or less, four hundred thousand or less
48:10
Speaker 4: in their IRA, and it might not be such a
48:13
Speaker 4: big deal if you're pulling that out over five years.
48:16
Speaker 4: All right, So now we got this all set up
48:18
Speaker 4: the way we want it. Now you're saying, okay, Todd,
48:20
Speaker 4: I understand the IRA piece and the life insurance piece.
48:23
Speaker 4: By putting it in there, it's going to go to probate.
48:26
Speaker 4: And by the way, everything here is going to go
48:28
Speaker 4: to probate.
48:29
Speaker 3: Well that doesn't sound enjoyable, right.
48:31
Speaker 4: Normally it's just the IRA and life insurance, very simple,
48:34
Speaker 4: it's one item. But I'm thinking about putting everything in
48:37
Speaker 4: here for a purpose. So yes, I'm going to have
48:40
Speaker 4: a probate issue, but I'm going to shelter these assets.
48:45
Speaker 4: So remember the assets are now going to go where
48:48
Speaker 4: all the assets, not just the IRA, but the home
48:51
Speaker 4: in the six hundred thousand, are going to flow into
48:53
Speaker 4: this testamentary trust, which we're creating because she's competent. We
48:57
Speaker 4: created a new will after we move everything into her name,
49:01
Speaker 4: and the new will has a testamentary trust built in
49:04
Speaker 4: with a marital share and a remainder share to take
49:06
Speaker 4: care of the spouse and shelter the assets for state
49:09
Speaker 4: tax purposes. Okay, Todd, that's great. You're gonna have one
49:12
Speaker 4: point nine million dollars. It's going to flow into probate,
49:15
Speaker 4: it's going to flow into this testamentary trust, and it's
49:17
Speaker 4: going to end up in the what remainder share of
49:21
Speaker 4: this testamentary trust because we're allowed to shelter up to
49:24
Speaker 4: two million dollars for a state taxes, So it's going
49:27
Speaker 4: to sit in the remainder share subject to a state
49:29
Speaker 4: tax on the first death under two million, no tax
49:33
Speaker 4: do and never to be estate taxed again when the
49:37
Speaker 4: survivor dies. So now we've completely eliminated a state taxes
49:42
Speaker 4: federal and state. Yeah, we got a little probate issue.
49:45
Speaker 4: What else do we have, Well, we have all these
49:47
Speaker 4: assets sitting in a trust better than the regular member.
49:51
Speaker 4: Our income only medicaid trust that you do in advance.
49:53
Speaker 4: You can only get income, not principle. Now all of
49:59
Speaker 4: this is available to the surviving spouse, both income and principle.
50:05
Speaker 4: So you have the surviving spouse has now more access
50:08
Speaker 4: to the asset than they had before. It's sheltered for
50:11
Speaker 4: a state taxes. And if the surviving spouse who's now
50:15
Speaker 4: seventy five gets sick the next day, no five year
50:19
Speaker 4: waiting period. Everything in there is protected from the nursing home.
50:22
Speaker 4: And that's better than starting a seventy five year old
50:25
Speaker 4: off with a five year waiting period. Excellent, folks. I'm
50:27
Speaker 4: going to do probate every day if I get all
50:29
Speaker 4: those benefits. Learn how at least to deal with IRA
50:33
Speaker 4: and life insurance in a similar way by getting the guide.
50:36
Speaker 4: It's the end of the month, folks eight six six
50:38
Speaker 4: eight four eight five six nine to nine or Legal
50:42
Speaker 4: Exchange show dot com.
50:44
Speaker 2: Todd Lutski from the law firm of Cushing and Dolan,
50:46
Speaker 2: thank you so much.
50:47
Speaker 4: Always a pleasure. Susan thank you.
50:49
Speaker 2: I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
50:53
Speaker 2: We thank you for joining us today and we'll be
50:55
Speaker 2: back again next week on the Legal Exchange with Todd Lutski.
51:00
Speaker 1: Every dollar you've saved in retirement accounts and life insurance
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Speaker 1: tells a story, a story of hard work, smart choices
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Speaker 1: dot com. The proceeding was paid for and The views
51:50
Speaker 1: expressed are solely those of Cushing and Dolan. Cushing and
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Speaker 1: Dolan and Ormstrong Advisory may contact you offering legal or
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Speaker 8: This is Mike Armstrong from the Armstrong Advisory Group. One
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Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
52:50
Speaker 1: registered investment advisor. Nothing in the ad or in any
52:52
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
52:54
Speaker 1: your own financial, tax into state planning advisors before making
52:56
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