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Ask Todd: Estate Planning Mistakes · 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 Lutsky is here to answer your
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  Speaker 1: questions and help you plan for later life. Ask Todd
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  Speaker 1: is presented by Cushing and Dolan, serving Massachusetts and New
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  Speaker 1: England for more than thirty five years, helping families with
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  Speaker 1: 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: It is Wednesday, which means we are joined by Todd
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  Speaker 2: Lusky from Cushion Dolan to answer any of your questions
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  Speaker 2: in the estate planning realm. If you have questions on gifting,
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  Speaker 2: estate taxes or trust, give our studio line a call
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  Speaker 2: at eight eight eight two zero five two two sixty three. Again,
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  Speaker 2: any of your questions in the estate planning realm for
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  Speaker 2: Todd Lutsky, give our studio line a call at eighty
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  Speaker 2: eight two zero five two two six'. Three, todd thanks
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  Speaker 2: so much for joining. Us punctual as, usual always a.
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  Speaker 3: Pleasure are you making fun of? Me let me get
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  Speaker 3: my microphone set? Up do you THINK i wasn't?
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  Speaker 2: Ready you're always ready to, Go, Todd and a question
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  Speaker 2: THAT i have for, You i'll be the first person
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  Speaker 2: here to ask you a question is on leaving assets to.
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  Speaker 2: Children in, particular SOMETIMES i bump into with clients concerns
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  Speaker 2: about what their children would do upon receiving a significant.
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  Speaker 2: Inheritance there's concerns that perhaps they might spend it. Foolishly
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  Speaker 2: there could be some other concerns about addiction and drugs
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  Speaker 2: and things of that. Nature what are some of the
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  Speaker 2: provisions that you can put in to some of your
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  Speaker 2: estate planning work that can help buffer against concerns that
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  Speaker 2: a parents may have on their children inheriting assets from.
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  Speaker 3: Them so a couple of. Things you, know when you
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  Speaker 3: talk about leaving assets to, Children as you, said there's
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  Speaker 3: so many different problems you could have with a, child
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  Speaker 3: and all of those things could impact a way in
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  Speaker 3: which you leave assets to. Children so maybe we just
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  Speaker 3: run through a couple of examples might be the best
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  Speaker 3: way to. GO i, MEAN i think the first thing
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  Speaker 3: people don't think about is how many how many people
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  Speaker 3: actually have a special needs. Child it's. AMAZING i can't tell.
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  Speaker 3: YOU i talk about. IT i ask families all the
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  Speaker 3: time just to make sure and when they have special needs,
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  Speaker 3: children they oftentimes think that they need to disinherit that
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  Speaker 3: child just because they're special needs and they might be
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  Speaker 3: getting governmental. Benefits and if they're getting governmental, benefits then
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  Speaker 3: they're going to lose their governmental benefits if you leave
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  Speaker 3: them assets we got disinherit, them, right horrible, idea. Folks
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  Speaker 3: you do not need to do. That in, fact inside your.
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  Speaker 3: Trust and this applies to whether you have a revocable
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  Speaker 3: trust and irrevocable. TRUST i don't care if it's a
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  Speaker 3: lifetime giving trust and irrevocable life insurance. Trust remember when
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  Speaker 3: we talk about how to leave assets to, children the
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  Speaker 3: type of trust you have when you start it is.
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  Speaker 3: Irrelevant it is when you. Die all trusts are, created created,
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  Speaker 3: equal so you can do anything you want after you.
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  Speaker 3: Pass so in this, case inside your, trust you might
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  Speaker 3: break it down into three. Buckets if you have three,
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  Speaker 3: kids if one happens to be special, needs you're just
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  Speaker 3: simply going to have special language and that share so
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  Speaker 3: that child doesn't own. It if that child doesn't own,
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  Speaker 3: it meaning they can enjoy, It i'll explain the. Language
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  Speaker 3: but if they don't own, it, well then they don't
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  Speaker 3: lose their governmental, benefits and they can continue to get,
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  Speaker 3: that but we can enhance their life by having a,
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  Speaker 3: child such as a, sibling serve as trustee when you're
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  Speaker 3: gone to make distributions out of that bucket for that
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  Speaker 3: child's benefit and don't usually need to tie it to any,
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  Speaker 3: standard simply say in the trustee's sole. Discretion that way
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  Speaker 3: you can help this child have a better life without
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  Speaker 3: losing governmental. Benefits so easy to, do a.
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  Speaker 2: Lot of great information. There really really appreciate. That we're
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  Speaker 2: gonna go to the phones. Here we've Got david from
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  Speaker 2: The cape you're on With Todd.
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  Speaker 4: Lutsky, Hi, todd good to talk to. You.
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  Speaker 5: Todd my mother as a irrevocable medicaid. Trust i'm the
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  Speaker 5: trustee and my siblings are. Beneficiaries my mother asked me
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  Speaker 5: to give some money from the trust one of my.
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  Speaker 5: Brothers is that considered a gift to resent because he's a.
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  Speaker 5: Beneficiary it's not a gift as far as IRUs is, Concerned.
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  Speaker 3: So so money in This if it's an irrevocable medicaid
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  Speaker 3: trust like the ones THAT i, prepare, AGAIN i haven't
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  Speaker 3: read this, trust SO i don't. Know but if it's
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  Speaker 3: one That cushing And dolan prepares we would have language in. There, Again,
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  Speaker 3: again the beneficiaries don't own the property, yet they don't
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  Speaker 3: own the. Money they don't own any of the, assets
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  Speaker 3: and the, trust the trust owns. It so that's very.
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  Speaker 3: Important and since it's a Grand tour, trust at least
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  Speaker 3: ours are it's still technically taxed for income and perhaps
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  Speaker 3: gift tax purposes on your mom's. Return, okay so if a,
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  Speaker 3: trance if you distribute money, out let's say we took
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  Speaker 3: one hundred thousand, Dollars i'm assuming it's more than. Nineteen
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  Speaker 3: if it's less than nineteen thousand, dollars then there's no gift,
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  Speaker 3: tax no, filing no requirements to do. Anything but if
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  Speaker 3: it's if we decide this child needs like fifty, grand
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  Speaker 3: and you take fifty grand and distribute it out of
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  Speaker 3: the trust to the. Child, again assuming there's a paragraph
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  Speaker 3: in the, document And i'm sure there should be that
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  Speaker 3: allows discretionary distributions to be paid out to the donors'.
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  Speaker 3: Children so here we distribute out fifty grand to the.
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  Speaker 3: Child technically it's a gift from mom to the. Child
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  Speaker 3: and then we go, forward but the child doesn't have
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  Speaker 3: to file. Anything the child doesn't pay any gift tax.
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  Speaker 3: Returns it's the giver that has to. File so technically
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  Speaker 3: your mom would file a seven h nine gift tax.
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  Speaker 3: RETURN i, know no good deed goes, unpunished, right so
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  Speaker 3: the giver files and the giver would not have to
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  Speaker 3: pay any tax in this case because your, mom me,
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  Speaker 3: you everybody has the ability to gift fifteen million dollars
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  Speaker 3: once in a lifetime without paying a gift. Tax so
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  Speaker 3: hopefully that that answers the.
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  Speaker 2: Question we're talking here With Todd lutsky From Cushian. Dolan
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  Speaker 2: if you have any questions in the estate planning realm
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  Speaker 2: on gifting, taxes, trust give our studio line and call
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  Speaker 2: it eight eight eight two zero five two to two sixty.
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  Speaker 2: Three again that studio line for any of your questions
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  Speaker 2: For Todd lutsky Of Cushian. Dolan eight eight eight to
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  Speaker 2: zero five two to two six. Three we're gonna take
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  Speaker 2: a quick break, here but when we come, back your
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  Speaker 2: questions With todd right after this.
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  Speaker 1: Break Ask todd With Todd lutsky Every wednesday at ten
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  Speaker 1: thirty only here on The Financial Exchange Radio. Network you're
• 6:47
  Speaker 1: listening To Ask todd With Todd lutsky on The Financial
• 6:50
  Speaker 1: Exchange Radio.
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  Speaker 2: Network we are back here With Todd lusky From Cushion.
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  Speaker 2: Dolan if you have any questions For Todd lutsky in
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  Speaker 2: the estate planning realm regarding trusts or, gifting give our
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  Speaker 2: STUDIO i call it eight eight eight two zero five
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  Speaker 2: two two sixty. Three anything, again questions that you have
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  Speaker 2: in the estate planning realm eight eight eight two zero
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  Speaker 2: five two to two sixty. Three we're gonna hit the
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  Speaker 2: phones right. Now we've Got kevin In. Needham, kevin you're
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  Speaker 2: on With Todd.
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  Speaker 4: Lusky, Yes, Hello first of, all thank you for having the.
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  Speaker 4: SHOW i love.
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  Speaker 3: It thank.
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  Speaker 4: You So i'm trying to find out if there's a
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  Speaker 4: way to gift stock that's highly, Appreciated say like if
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  Speaker 4: you Bought apple fifteen years ago and now it's mostly,
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  Speaker 4: profit but you don't want to have to take the
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  Speaker 4: profit to give the money. Away is there a way
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  Speaker 4: to do, that said you wanted to give it to
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  Speaker 4: a grandchild.
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  Speaker 3: Or, well there there, is But i'm not sure you're
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  Speaker 3: you're saving. Anything and that's that's the. Problem. Right so,
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  Speaker 3: one you are allowed to make a gift of anything you,
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  Speaker 3: want including highly appreciated. Stock you don't have to sell,
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  Speaker 3: it so you can gift the shares in kind to your.
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  Speaker 3: GRANDCHILD i, mean you might have to set up some
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  Speaker 3: kind of an. ACCOUNT i don't think your grandchild unless
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  Speaker 3: they're old, enough can have an. Account but let's say
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  Speaker 3: they're over, eighteen you can set up an, account or
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  Speaker 3: he can or she, can and you just transfer the
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  Speaker 3: stock over. There so let's just, say for, example that
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  Speaker 3: you have you, know five, HUNDRED i don't, know should
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  Speaker 3: we use a number just to make an. Example so
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  Speaker 3: let's say you've got a million dollars of apple. Stock
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  Speaker 3: but let's say you bought it long time, ago and
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  Speaker 3: let's say you only paid one hundred thousand dollars for,
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  Speaker 3: it so your gain built into that stock is nine hundred.
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  Speaker 3: Thousand that's kind of what you're driving, at. Right you
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  Speaker 3: got this built in, gain so they call it built in.
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  Speaker 3: Gain and if you gift this, away you are making
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  Speaker 3: a taxable. Gift forget the nineteen thousand dollars present interest exclusion.
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  Speaker 3: Amount i'm just going to ignore that for. Now you're
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  Speaker 3: making a taxable. Gift you are because you're the. Giver
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  Speaker 3: you're making a taxable. Gift of one million dollars and
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  Speaker 3: the recipient doesn't have to have any income tax from that.
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  Speaker 3: Gift and the recipient doesn't have to pay a gift,
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  Speaker 3: tax but the giver. Does so now you get to
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  Speaker 3: file a gift tax return A form seven oh, nine
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  Speaker 3: and you get to file it and Say i've made
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  Speaker 3: a million dollar taxable. Gift, however there's a deduction line
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  Speaker 3: on the seven oh nine gift tax, return and that
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  Speaker 3: deduction line, SAYS i get to use up one million
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  Speaker 3: dollars of my fifteen million dollars once in a lifetime
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  Speaker 3: gift tax exclusion that everybody. Has, okay so one million
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  Speaker 3: minus my one million dollar, exemption you pay zero. Tax
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  Speaker 3: but now you only have the ability to shelter fourteen
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  Speaker 3: million dollars of other assets from federal estate tax. Purposes
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  Speaker 3: NOW i don't know, you and you're probably, saying, well that's,
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  Speaker 3: great that's not a problem for. Me you're not going
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  Speaker 3: to be an, issue and you're probably, Right but what
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  Speaker 3: have you really. Accomplished you've now given your grandchild a
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  Speaker 3: nine hundred thousand dollars built in. Gain so when your
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  Speaker 3: grandchild sells, it that capital gain is still going to be.
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  Speaker 3: Taxed at twenty eight point eight percent federal, state plus
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  Speaker 3: if you're in mash you get the bonus of that
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  Speaker 3: four percent millionaire as tax on top of. That So
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  Speaker 3: i'm not sure we really saved. Anything so depending on your,
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  Speaker 3: estate you might want to just do an estate plan
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  Speaker 3: where we can also pay no estate tax when you
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  Speaker 3: die at the death tax level and allow your grandchild
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  Speaker 3: to inherit it when you. Die if that's the, case
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  Speaker 3: we save on the estate tax. Front we don't pay
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  Speaker 3: any federal or state death tax depending on the size
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  Speaker 3: of your, estate and when your grandchild gets, it let's
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  Speaker 3: say then it's worth a million five that, child that
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  Speaker 3: grandchild's basis will be a million. Five now the grandchild
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  Speaker 3: can liquidate the apple stock and pay zero capital gains,
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  Speaker 3: Tax so you're, saving you, know on nine hundred thousand.
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  Speaker 3: Dollars if you hit that at thirty, percent, right that's
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  Speaker 3: two hundred and seventy thousand dollars in capital gains. Tax.
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  Speaker 3: Right so just saying there's a lot to be done,
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  Speaker 3: there SO i would not just jump at the idea
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  Speaker 3: of making a, gift is my is my. Point do
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  Speaker 3: some planning, anyways. Folks hope that, Helps but you know
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  Speaker 3: some of the things we think. About and this is
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  Speaker 3: a great question From kevin because it's how do you
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  Speaker 3: leave your assets to your? Family which is exactly what
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  Speaker 3: the new guide is this. Month, folks how do you
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  Speaker 3: leave your assets to your? Family not so much worried,
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  Speaker 3: about you, know the estate tax and the, probate BUT
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  Speaker 3: i care about the family behind the estate. Plan what
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  Speaker 3: IF i wanted to go to a grandchild Like kevin.
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  Speaker 3: Does what IF i want to do generation skipping planning
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  Speaker 3: WHERE i can have children and grandchildren enjoy the, assets
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  Speaker 3: but not have a tax that every. Generation what IF
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  Speaker 3: i want to protect assets from future, creditors. Divorces what
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  Speaker 3: IF i have a child who's got spendthrift, problems Or
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  Speaker 3: i've got a special needs child AND i want to
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  Speaker 3: care for that. Child there's so many ways to think about.
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  Speaker 3: It in the last, kick or what if you've got
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  Speaker 3: a second. Marriage oh my, goodness we really got to
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  Speaker 3: figure out how to leave, assets. Folks get the Guide
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  Speaker 3: how do You leave assets to your? Beneficiaries brand new
• 12:19
  Speaker 3: for the, month packed with information eight six six eight
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  Speaker 3: four eight five six nine nine Or Legal Exchange show
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  Speaker 3: Dot com again eight six six eight four eight five
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  Speaker 3: six nine nine Or Legal exchange, show dot com tud.
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  Speaker 2: What are some of the pros and? CONS i think
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  Speaker 2: Oftentimes i'll talk with clients and they may have been
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  Speaker 2: added on as a co owner on a bank account
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  Speaker 2: for an elderly, parent and there are some some pros to.
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  Speaker 2: That from an ease of use, PERSPECTIVE i would, imagine
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  Speaker 2: what are some pros and cons to that, approach because
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  Speaker 2: there also can be some negative effects that can come
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  Speaker 2: from adding a kid on as a co owner on.
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  Speaker 3: Assets so let's say joint bank account, maybe or a
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  Speaker 3: joint and brokerage, account, right something like, That and AGAIN
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  Speaker 3: i THINK i think that's. Critical and again this guide
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  Speaker 3: actually has that in there. Too it talks about the
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  Speaker 3: easy way, out and this is what this, Is. Paul
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  Speaker 3: the easy way out is a, joint joint account or
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  Speaker 3: or maybe even add a designated beneficiary on the. Account
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  Speaker 3: so if you put a designated beneficiary on an account
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  Speaker 3: to a child or a joint account to one, child, why,
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  Speaker 3: oh because they're, local because they're you, know. Convenient it's
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  Speaker 3: it's convenient to help out paying a, bill accessing an,
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  Speaker 3: account et. Cetera you do, that and if you, die
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  Speaker 3: it goes to that person and avoids. Probate but If
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  Speaker 3: i've got three other, KIDS i accidentally disinherited all those other.
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  Speaker 3: Kids why BECAUSE i listed one child as the designated.
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  Speaker 3: Beneficiary SO i think you need to be mindful of
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  Speaker 3: of that now to fix that if you if you
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  Speaker 3: still want to HAVE i guess you have that with
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  Speaker 3: a joint with the designated. Beneficiary but you have the
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  Speaker 3: same problem with a joint. Account, now with a joint,
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  Speaker 3: account you might run around and put again one child
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  Speaker 3: on as a joint owner when that person when you,
• 14:10
  Speaker 3: die the surviving joint owner automatically gets the. Asset, yeah
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  Speaker 3: avoids probate doesn't do much from an estate planning standpoint at,
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  Speaker 3: All and again you run the risk of disinheriting other.
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  Speaker 3: Children if that's what you're, doing at least make sure
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  Speaker 3: in your will that there's language that, says you, Know
• 14:29
  Speaker 3: i'm going to disregard the joint ownership and have it
• 14:33
  Speaker 3: go to probate, anyway so that the will would grab
• 14:36
  Speaker 3: it and pour it over into your. Trust so you'd
• 14:38
  Speaker 3: have a poor overwill connection there to, say Now i've
• 14:41
  Speaker 3: prevented the accidental disinheritance of my. Children but at least
• 14:46
  Speaker 3: during life there was the convenience of accessing the account
• 14:49
  Speaker 3: and paying a. Bill SO i think it's very important
• 14:52
  Speaker 3: to learn how better to leave your assets to your
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  Speaker 3: children or your. Family THEN i join bank account or
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  Speaker 3: a designated. BENEFICIARY i don't want either of. THOSE i,
• 15:05
  Speaker 3: think get the guide and learn how there are so
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  Speaker 3: many better ways through trusts to leave.
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  Speaker 2: Assets, yeah you think it's, easy but it's not the
• 15:13
  Speaker 2: best way always from that, Standpoint from that, Approach, todd
• 15:16
  Speaker 2: thanks so much for joining us this. Week really appreciate.
• 15:18
  Speaker 3: It always. Pleasure thank.
• 15:20
  Speaker 1: You this has been Asked odd on The Financial Exchange radio.
• 15:23
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• 15:26
  Speaker 1: cushing And, dolan Serving massachusetts And New england for more
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  Speaker 1: than thirty, years helping families with the state and tax,
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  Speaker 1: Planning medicaid, planning and probate. Law call eight hundred three
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  Speaker 1: Com the views expressed in this segment are solely those
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  Speaker 1: Of cushing And Dolan Armstrong. Advisory he does not provide
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  Speaker 1: any legal or tax. Advice please consult with your illegal
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