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Ask Todd: First steps when planning for nursing home care · 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: And we've got Todd Lotski here in studio to help
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  Speaker 2: answer your estate planning questions. Phone lines are open eight
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  Speaker 2: eight eight to zero five two two sixty three. That
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  Speaker 2: is the number to call to ask Todd your estate
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  Speaker 2: planning questions. A reminder, we do have limited space on
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  Speaker 2: those lines, so get calling early and often if you
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  Speaker 2: want to get some time with Todd again. Eight eight
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  Speaker 2: eight two zero five two two six three is the
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  Speaker 2: number to call to ask your state planning questions. Live
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  Speaker 2: on air, right now, one last time. That is eight
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  Speaker 2: eight eight two zero five two two six three. Mister Lutsky,
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  Speaker 2: how are you doing today?
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  Speaker 3: Never better? Chuck? How you doing? I'm good?
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  Speaker 4: Uh?
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  Speaker 2: I was at a bar the other night a bar,
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  Speaker 2: this cowboy walked in. Oh yeah, he had a paper
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  Speaker 2: towel he was using as a bandana. Okay, that's when
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  Speaker 2: the bartender goes, hey, you can't come in here. You
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  Speaker 2: got a bounty on your head. That's that's good, and
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  Speaker 2: he left. He left, Todd, I want to talk to
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  Speaker 2: you about last minute planning to try to qualify for Medicaid. Obviously,
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  Speaker 2: I know it's preferred by you and probably most of
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  Speaker 2: the state planning attorneys to plan ahead, but listen, we're human.
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  Speaker 2: Sometimes we don't plan ahead.
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  Speaker 3: Or things just happen correct, accidents happen unexpected expected.
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  Speaker 2: If someone you know or you has a situation with
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  Speaker 2: long term care that is imminent, either you're.
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  Speaker 3: Already going through it or you're going to in the next.
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  Speaker 2: Couple of weeks, yeah, what are the tools available at
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  Speaker 2: this point to help deal with that?
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  Speaker 3: So I'm going to start off by saying, please just
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  Speaker 3: call an elder law attorney, because that's the first step. Really,
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  Speaker 3: it seems silly, but it is because so many people
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  Speaker 3: will just think on their own that there's nothing I
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  Speaker 3: can do, and the nursing home will certainly tell you
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  Speaker 3: that you know it costs fifteen sixteen thousand a month,
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  Speaker 3: and can you please just write the check? And lots
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  Speaker 3: of times people unaware that there's things that can be done,
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  Speaker 3: we'll just, you know, just comply because remember that's a
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  Speaker 3: really emotional time right then. You know, you're dealing with
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  Speaker 3: some real heavy emotional situation, so they'll just comply. So
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  Speaker 3: first step is don't do that. Second, once you get
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  Speaker 3: a hold of somebody who knows there are things that
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  Speaker 3: you can do. There's you know, are you married, if
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  Speaker 3: you have a spouse at home, you have a lot
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  Speaker 3: more options perhaps than you do if you're single. Doesn't
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  Speaker 3: mean if you're single you don't have any there are
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  Speaker 3: you know, assets that you're going to have to look at.
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  Speaker 3: You're going to have to look at your your whole
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  Speaker 3: asset list and say, well, I've got a home, I've
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  Speaker 3: got a rental property, and I've got an investment portfolio.
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  Speaker 3: You know, well, assets, the kind of assets you have
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  Speaker 3: are treated differently from what we call a countable versus
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  Speaker 3: a non countable status. So there are some assets that,
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  Speaker 3: believe it or not, when you're going into the nursing
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  Speaker 3: home are non countable. And the one that most people
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  Speaker 3: have is a home, and most people have that home
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  Speaker 3: as their most valuable asset, and so good news. Single
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  Speaker 3: or married, the house at least is non countable. Now
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  Speaker 3: if you're married, and again different treatment of assets for
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  Speaker 3: different situations. If you're married, it's not only non countable,
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  Speaker 3: there's no value limitation, and it's non leanable. It's just
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  Speaker 3: not available. Beautiful. It's not the way to go though,
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  Speaker 3: but at least it'll help save the asset. If you're single,
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  Speaker 3: you have to check a box that says I intend
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  Speaker 3: to return home on the application and it'll be non
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  Speaker 3: countable but leanable, but you'll be on medicaid, which is
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  Speaker 3: better than not being on medicaid. And lastly, there is
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  Speaker 3: a value limitation. With a single person, the house can't
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  Speaker 3: be worth more than Actually that's changing. You heard about
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  Speaker 3: you heard about the BBBA. So for single people used
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  Speaker 3: to be here in Massachusetts it was like a million.
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  Speaker 3: One I'm going to say right around that value. If
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  Speaker 3: it was more than that, you were just annied medicaid.
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  Speaker 3: Now across the country it's going to level out at
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  Speaker 3: one million for everybody. So I unfortunately, I think it's
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  Speaker 3: still some things that need to be cleared up in
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  Speaker 3: this bill, but the way it reads is that's going
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  Speaker 3: to fall back. So in Massachusetts we actually have to
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  Speaker 3: go back to a million dollar valuation limitation on a house.
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  Speaker 3: But things can be done now.
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  Speaker 2: Talking with Todd Lotsky from Cushiing and Dolan, we've still
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  Speaker 2: got room on the phone lines. If you have a
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  Speaker 2: state planning questions to ask him, this is your chance.
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  Speaker 2: Todd's gonna be answering questions live on air right now.
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  Speaker 2: Phone numbers eight eight eight to zero five two two
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  Speaker 2: six three. We do still have a little bit of
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  Speaker 2: room on those lines, so again eight eight eight to
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  Speaker 2: zero five two two sixty three, But call quickly just
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  Speaker 2: because again there's only so many people that we can
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  Speaker 2: get to. We're going to take a quick break now.
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  Speaker 2: When we're back right to your calls with Todd. That
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  Speaker 2: number again is eight eight eight to zero five two
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  Speaker 2: 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 2: All right, right to your questions with mister Lotski. First up,
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  Speaker 2: we've got Donna in Mashpeede. Donna, you are on with
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  Speaker 2: Todd Lutsky.
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  Speaker 4: Hi, good morning, Thank you.
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  Speaker 3: Go ahead.
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  Speaker 4: I'll try to keep this uncomplicated as it is for
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  Speaker 4: a year now. I have set up I have a
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  Speaker 4: credit shelter trust and a state tax plant with tax
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  Speaker 4: planning provisions. So it's split my husband and I. All
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  Speaker 4: assets are fifty to fifty. The house is fifty to fifty.
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  Speaker 4: Our assets for fifty to fifty.
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  Speaker 3: So you have a husband and wife trust and they're revocable.
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  Speaker 4: Correct, they're revocable. That's right for now till the first passes.
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  Speaker 3: Correct.
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  Speaker 4: When the first passes, that is split into an exempt.
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  Speaker 3: And there it all correct. It's a marital share and
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  Speaker 3: a remainder share. Got it.
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  Speaker 4: But my question, and it's funded up to two million,
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  Speaker 4: there will not be two million in that. And I'm
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  Speaker 4: wondering if the text tails wagging the dog, and if
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  Speaker 4: there's no two million in the first, why can't we
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  Speaker 4: just wait until the second passes? The first passes, a
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  Speaker 4: second makes those decisions. And the other part is I
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  Speaker 4: have two trusts for each daughter. One is special needs
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  Speaker 4: and the other is a just a credit shelter for her,
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  Speaker 4: and when the first dies, both of those girls plans
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  Speaker 4: are irrevocable. And we're feeling like our hands are tied
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  Speaker 4: right now with those dicis.
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  Speaker 5: Let me let me ask you a year ago.
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  Speaker 3: Let me ask you a couple of questions first, because
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  Speaker 3: this is not so.
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  Speaker 2: So.
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  Speaker 3: These two trusts that you talk about for the kids,
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  Speaker 3: those shouldn't come into play until you're both dead. Is
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  Speaker 3: that correct those No, that's not the way it's written.
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  Speaker 4: It's written when the first spouse passes, those trusts become revocable.
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  Speaker 3: Okay. No, I'm asking a separate question. So I know
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  Speaker 3: you have a husband trust. I know you have a
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  Speaker 3: wife trust. And then you said there's trust for your kids.
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  Speaker 3: Are those separate documents right now? Or or do those trusts? Okay? So,
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  Speaker 3: first of all, those should be empty, and I don't
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  Speaker 3: think you need separate trust documents for your kids. That's
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  Speaker 3: first and foremost. Something's wrong there.
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  Speaker 4: Special needs different No, No, I.
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  Speaker 3: Get the special needs. I'm gonna and I'm still gonna
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  Speaker 3: stick with my comment unless you want to put money
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  Speaker 3: into that special needs trust for your kid right now,
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  Speaker 3: which I don't think you need to do because you
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  Speaker 3: could take care of your child, I would think on
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  Speaker 3: your own and and so I would I would not
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  Speaker 3: have that. The only time you have a special needs
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  Speaker 3: trust set up when you're both alive for your for
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  Speaker 3: your child is if you have other family members who
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  Speaker 3: might want to contribute to your child's well being. Now,
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  Speaker 3: other than that, the special needs language should be built
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  Speaker 3: into your husband and wife family trusts that get funded
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  Speaker 3: when you both die. Okay, now, before I address your
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  Speaker 3: husband and wife family trusts, are you guys worth more
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  Speaker 3: than four million dollars.
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  Speaker 4: With total with house, iris, everything, everything, quot It's just close.
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  Speaker 4: It's probably three point five good.
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  Speaker 3: So if your trust is let's call it three five
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  Speaker 3: perfect answer. If your trusts, if you have two revocable
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  Speaker 3: trusts in place right now, first of all with three
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  Speaker 3: point five million, depending on how old you are, I
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  Speaker 3: would be asking you know, are you concerned about protecting
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  Speaker 3: assets from the nursing home. Is that a concern of yours?
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  Speaker 4: Well, we were told if we put the house in
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  Speaker 4: irrevocable that'd be protected, but we don't want even want
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  Speaker 4: our hands tied with that.
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  Speaker 3: Well, I'm just asking the question, deep writ is it
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  Speaker 3: important to you to protect from the nursing home if
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  Speaker 3: you could.
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  Speaker 4: No, I don't think so, because we want the freedom
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  Speaker 4: of having our money.
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  Speaker 3: I understand that. But these revocable trusts, if explained right,
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  Speaker 3: you can get a lot of control and protection. But
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  Speaker 3: leave that, leave that off for now. So then with
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  Speaker 3: revocable trusts, and I get it. You already have two
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  Speaker 3: trusts and you shouldn't. You should have one. You need
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  Speaker 3: a revocable joint trust. So that to your point. Your
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  Speaker 3: main point is that two million dollar bucket going into
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  Speaker 3: the remainder share, and you were right, Todd. What if
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  Speaker 3: we don't have two million to shelter because we split
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  Speaker 3: the assets between the two trusts. So I have, you know,
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  Speaker 3: one point seventy five in each bucket, Well, that's not
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  Speaker 3: going to help or depending on how much your IRA is.
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  Speaker 3: But what you do with a joint revocable trust is
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  Speaker 3: you put everything in and now, on the first death,
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  Speaker 3: everything that's in that trust will be able to be
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  Speaker 3: transferred between the remainder share and the marital share. And
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  Speaker 3: the reason you cannot wait is because on the first death,
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  Speaker 3: I want to be able to shelter whatever amount we can.
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  Speaker 3: If it's two million, great, if it's a million, five great,
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  Speaker 3: why because on the second death, if you don't shelter
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  Speaker 3: on the first death, the survivor will be worth more
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  Speaker 3: than the estate tax exemption, and you will pay taxes, example, quickly,
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  Speaker 3: if you're worth three point five and you do what
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  Speaker 3: you were asking, Well, why can't I just let everything
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  Speaker 3: go to me and then I'll make the decisions when
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  Speaker 3: I die because three point five is bigger than the
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  Speaker 3: Massachusetts two million dollar exemption, and now your kids will
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  Speaker 3: unnecessarily pay a state tax on the amount over two million.
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  Speaker 3: But if I can shelter something on the first death
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  Speaker 3: in a remainder share, Now let's say I sheltered even
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  Speaker 3: a million five, while on the surviving spouse's death there
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  Speaker 3: won't be any tax to because I'll be less than
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  Speaker 3: two million. So lots to think about here. I think
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  Speaker 3: you might need a second opinion. Not excited about the
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  Speaker 3: way you your plan is necessarily set up. But you
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  Speaker 3: know what, folks, that's exactly why you call to learn
• 11:58
  Speaker 3: about these things, and that's why you get that guide
• 12:00
  Speaker 3: we're giving away this month, which is last minute Medicaid
• 12:03
  Speaker 3: eligibility planning. It is a guide that tells you last
• 12:07
  Speaker 3: minute what you can do now. Great Donna is trying
• 12:10
  Speaker 3: to do planning in advance, which I love, but there
• 12:12
  Speaker 3: are people who end up facing these situations last minute.
• 12:16
  Speaker 3: Don't write the check. Get the guide. Learn about how
• 12:19
  Speaker 3: countable and non countable assets are treated. Learn how things
• 12:23
  Speaker 3: are treated. Learn even how you can avoid the five
• 12:25
  Speaker 3: year waiting period sometimes last minute. Get the guide eight
• 12:32
  Speaker 3: six six eight four eight five six nine nine or
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  Speaker 3: Legal Exchange Show dot com again eight six six eight
• 12:41
  Speaker 3: four eight five six nine nine or Legal Exchange Show
• 12:45
  Speaker 3: dot com.
• 12:46
  Speaker 2: Todd, I got another one q'ed up for you here.
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  Speaker 2: Let's go to Steve in East Bridgewater. Steve, what's your
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  Speaker 2: question for Todd?
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  Speaker 5: Yeah, thanks for taking my question. For sure, our vehicles,
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  Speaker 5: I have a trust. Is it worth a vehicle like
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  Speaker 5: a car, truck, whatever, personal into the trust?
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  Speaker 3: Is your trust revocable? No irrevocable, So either way, I
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  Speaker 3: just asked that to clarify for everybody else either way. No,
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  Speaker 3: we almost never do that. So there's really no reason
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  Speaker 3: to be putting a car in a trust that's a
• 13:20
  Speaker 3: depreciating asset. It it just doesn't really doesn't really do
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  Speaker 3: much and it's very easily transferred at the registry. They
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  Speaker 3: have forms on that, so I would I would say
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  Speaker 3: no on that, Todd.
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  Speaker 2: We got one more for you here, let's see if
• 13:32
  Speaker 2: we can get through. We got another Steve, this one
• 13:34
  Speaker 2: Stephen and Franklin. Steven, you got about a minute or so.
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  Speaker 2: What's your question for Todd?
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  Speaker 6: Hi, Todd, just kind a quick question. It's kind of
• 13:42
  Speaker 6: a general thing. I've never trusted a will. I'm looking
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  Speaker 6: to be to do a will my wife. That's a
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  Speaker 6: couple of businesses, we have a second house. So I'm
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  Speaker 6: just trying to maybe meet with someone and babe, just
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  Speaker 6: establish all this.
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  Speaker 3: So whenever I hear people say they want a will,
• 13:59
  Speaker 3: to me, that's the lay person saying I want an
• 14:02
  Speaker 3: estate plan because a will. Although we do them and
• 14:05
  Speaker 3: there are a part of your overall quote estate plan,
• 14:08
  Speaker 3: they're really the least important document in the estate planning file,
• 14:12
  Speaker 3: all right. I want very little to be addressed by
• 14:15
  Speaker 3: the will because it goes to probate if it's addressed
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  Speaker 3: by a will. So for you, a trust would be
• 14:21
  Speaker 3: the bigger piece of the estate planning pie. And as
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  Speaker 3: you said, there's a couple of businesses. You own a
• 14:27
  Speaker 3: second house, which leads me to believe you must own
• 14:29
  Speaker 3: a first house and you start adding up everything again,
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  Speaker 3: Like I asked the other caller, are all your assets
• 14:35
  Speaker 3: when you add them together north of four million or under?
• 14:38
  Speaker 3: Which is the mass exemption?
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  Speaker 6: Probably around there?
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  Speaker 3: And how old are you?
• 14:45
  Speaker 6: I'm yeah, so.
• 14:47
  Speaker 3: I would say I would say you're in the right
• 14:49
  Speaker 3: category to do basic estate planning. I don't think you
• 14:52
  Speaker 3: need a lot more than that, but I do think
• 14:54
  Speaker 3: you should sit down with someone and learn how these
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  Speaker 3: probably either revocable or irrevocable trust works, probably revocable trust
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  Speaker 3: in your situation, how they work to avoid probate and
• 15:04
  Speaker 3: reduce the estate taxes and take care of the family.
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  Speaker 3: So hope that helps, mister Lutsky. Thank you so much
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  Speaker 3: for joining us today. Always a pleasure.
• 15:13
  Speaker 1: This has been Asked Odd on the Financial Exchange Radio network.
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