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Benefits of irrevocable trusts · The Legal Exchange

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Speaker 1: This is the Legal Exchange with Todd Lutsky from the
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Speaker 1: law firm of Cushing and Dolan and Susan Powers of
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Speaker 1: the Armstrong Advisory Group. Each week, Todd and Susan will
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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
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Speaker 1: question about another issue that may affect your future, call
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Speaker 1: eight six six eight four eight five six ninety nine
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Speaker 1: to make an appointment. That's eight sixty six eight four
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Speaker 1: eight five six ninety nine. Operators are standing by. Now
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Speaker 1: Here are your hosts, Todd Lutsky and Susan Powers.
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Speaker 2: Welcome into the Legal Exchange with Todd Lutsky. I'm Susan Powers,
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Speaker 2: a financial advisor with the Armstrong Advisory Group, and I'm
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Speaker 2: joined by Todd Lutsky, a partner with the law firm
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Speaker 2: of Cushing and Dolan with a master's in taxation. Welcome Todd.
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Speaker 2: How are you today?
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Speaker 3: I am never better in you?
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Speaker 2: I am great? Thank you. What do you have for
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Speaker 2: us this week?
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Speaker 3: Couple of things a Mississippi Appellate Court case and then
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Speaker 3: we're going to head over to Missouri, so kind of
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Speaker 3: like the Midwest South area. So this first one is
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Speaker 3: interesting because it's all about drafting share and share alike
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Speaker 3: versus per stirpies. Right, you wouldn't think there's a big difference,
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Speaker 3: but there is, folks. So how you draft things matters
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Speaker 3: as to who gets it. Does it go down to
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Speaker 3: grandkids or does it stay at the generation that you're
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Speaker 3: at per capita per head? Right, So very important that
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Speaker 3: you know the difference because in this case, it turns
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Speaker 3: out that one of the kids that was supposed to
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Speaker 3: be all treated equally died before mom and dad and
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Speaker 3: then was out. The grandkids were out or were they
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Speaker 3: based on the language. So stay tuned and we're going
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Speaker 3: to help you with drafting and understanding drafting because that's
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Speaker 3: the key to a state planning. Next, Missouri is a will.
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Speaker 3: Basically I always say a will's a one, but in
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Speaker 3: this case, a will is better than nothing. And you're
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Speaker 3: going to find out how having your intent written down
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Speaker 3: at least gives you an opportunity to pursue the donor's
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Speaker 3: wishes because there were in fact wishes with a will,
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Speaker 3: even though the will was never probated, and can you
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Speaker 3: just decide not to probate a will and then say
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Speaker 3: the will's no good. Very interesting case. This document exactly
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Speaker 3: how how did this personal representative get away with this?
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Speaker 3: But or did they so? Stay tuned. It's all about drafting, folks.
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Speaker 3: These cases are both will oriented, but they lack so
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Speaker 3: much of the estate planning that needs to be done.
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Speaker 3: But in our guide this month, it's unlocking the power
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Speaker 3: of Medicaid irrevocable trust folks. This is going to help
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Speaker 3: you understand how to get how to whether or not
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Speaker 3: you need an irrevocable trust. This will help you finally
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Speaker 3: come to that conclusion because it's drafted in a question
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Speaker 3: and answer format. Can I sell my house? Can I
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Speaker 3: live in my house? Can I buy a new house?
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Speaker 3: What are the taxes if I sell my house? What
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Speaker 3: do I put in my trust? How does it operate
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Speaker 3: day to day? I mean it is question and answer,
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Speaker 3: question and answer for you folks on exactly how they work,
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Speaker 3: from taxes to control to operations. Learn how these Medicaid
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Speaker 3: trusts work. Get the guide eight six six eight four
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Speaker 3: eight five six nine nine or Legal Exchange Show dot
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Speaker 3: Com again eight six six eight four eight five six
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Speaker 3: nine nine or Legal Exchange show dot Com Unlocking the
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Speaker 3: power of Medicaid irrevocable trusts. Where we headed First, we
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Speaker 3: are headed to Mississippi. First, Sharon share like versus pers Therpy.
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Speaker 3: Is you ready? Here's what happened. Richard and Martha had
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Speaker 3: four kids, jan Mark, Lisa, and Amy.
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Speaker 1: Well.
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Speaker 3: Martha died in twenty oh three and Richard lived alone,
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Speaker 3: and he executed a will he named Amy as personal
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Speaker 3: repries and in the will actually you know, devised certain
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Speaker 3: pieces of real estate to Mark and jan if living
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Speaker 3: otherwise to their descendants per sturpes Well. Other real estate
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Speaker 3: was allocated to his four kids share and share alike,
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Speaker 3: and it had a residuary clause to his four kids
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Speaker 3: share and share alike. So yeah, two kids are sort
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Speaker 3: of getting a certain something and everything else is share
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Speaker 3: and share alike. Well, in twenty fifteen, twenty fourteen, she
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Speaker 3: had some decline or he had some declining health and
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Speaker 3: cognitive issues. So Amy took his dad to a bank
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Speaker 3: at his request and added her name to a joint
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Speaker 3: account in CDs and then transferred the entire amer Prize
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Speaker 3: account where her friend Amy worked as a financial advisor,
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Speaker 3: to this same account Mark in twenty fifteen, died unexpectedly.
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Speaker 3: He's one of the children children, yeah, right, survived by
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Speaker 3: three kids. Richard now died in twenty nineteen, and of
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Speaker 3: course Mark's kids sued to have Amy removed for undue influence,
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Speaker 3: right adding her name to that joint account and remove
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Speaker 3: her as executor. Well, actually she never filed the will.
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Speaker 3: The trial court did find undue influence. Clearly she took
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Speaker 3: him to the you know, to the bank and changed
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Speaker 3: the accounts and put her name on it, and so
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Speaker 3: certainly there was undue influence. And also said that that
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Speaker 3: residuary clause said Sharon share alike means just like persturpies,
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Speaker 3: the three grandkids are in they get to share the
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Speaker 3: money that that went into the that all that money
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Speaker 3: that she took that went into the will and and
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Speaker 3: got to be share and share alike. Well, the appellate
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Speaker 3: court agreed that there was definitely undue influence here. You
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Speaker 3: can't just do that. However, the appellate court reversed on
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Speaker 3: the drafting language and said the word Sharon share alike
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Speaker 3: mean equal per capita, and Richard knew the difference because
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Speaker 3: he gave two pieces of property to two kids per stirpis.
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Speaker 2: Which means if they die, their kids would.
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Speaker 3: Which means their grandkids get it, got it and knew
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Speaker 3: the difference. And then later on in the same document
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Speaker 3: he used the word sharon share alike.
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Speaker 2: So, which is the per capita side of the equation.
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Speaker 3: Exactly? Okay, that's the per capita side of the equation.
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Speaker 3: So the appellate court said, because the don or or
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Speaker 3: because the richard the decedent did his will and knew
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Speaker 3: the difference because he used the words differently for different dispositions,
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Speaker 3: they have different meanings. Yeah, make sure you know that.
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Speaker 3: And so they reversed the appellate court or the trial
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Speaker 3: court on that and said that the grandkids are out
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Speaker 3: for the extra money that was taken that got dumped
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Speaker 3: into the residuary clause. Right, they would, they would be out. Wow,
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Speaker 3: I think they got they got it right. I think
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Speaker 3: the thing you need to remember is, you know, drafting
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Speaker 3: is so darn important folks, Right. You know, a will,
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Speaker 3: as I always say, is a won't to begin with.
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Speaker 3: It won't avoid probate. And and you know there's really
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Speaker 3: no planning done here. On the first death. They had
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Speaker 3: all this real estate. I mean they wasted the exemption
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Speaker 3: on the first death because they just had a will,
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Speaker 3: everything went to the surviving spouse. They probably had higher
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Speaker 3: estate taxes due on the second death. I mean, all
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Speaker 3: of this is not These are tips i'm giving you
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Speaker 3: that I'm that weren't addressed in the case. But from
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Speaker 3: a planning point of view, folks, doing just a will
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Speaker 3: wasted all that. I know that wasn't part of the case,
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Speaker 3: but we need to learn from this case. And also
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Speaker 3: when you start adding joint names to accounts, remember, yes,
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Speaker 3: there was definitely undue influence here and they you know,
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Speaker 3: they did disinherit the grandkids. But remember these joint accounts
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Speaker 3: are are you end up disinheriting other people when you
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Speaker 3: accidentally do this, even if you didn't mean to right. Plus,
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Speaker 3: don't don't think somehow it does anything for you. It doesn't.
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Speaker 3: It doesn't protect it from the kid's creditors. They're one
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Speaker 3: half on the hook if they get something happens to
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Speaker 3: the kid. It doesn't protect half from the nursing home.
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Speaker 3: You always think, oh, I put my kid's name on
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Speaker 3: it protected half from the nursing home. It's not. I mean,
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Speaker 3: there's so many other things to think about in this case, yes,
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Speaker 3: joint accounts disinherited other people, but there's other things that
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Speaker 3: don't do joint accounts.
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Speaker 2: But you guys are Cushing and Dolan, you have kind
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Speaker 2: of a safety net built in when there are joint accounts, correct.
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Speaker 3: Yeah, that's a great point. We put language in if
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Speaker 3: it's a joint account that it's treated as done for
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Speaker 3: convenience and to be ignored for probate avoidance, meaning it's
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Speaker 3: going to go to probate. We're not missing out on probate.
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Speaker 3: We want the will to get it and then the
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Speaker 3: will will give it to the people or pour it
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Speaker 3: into the trust or whatever we have. In this case,
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Speaker 3: the will didn't help because they drafted it badly. But
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Speaker 3: always remember to draft it correctly, so very important if
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Speaker 3: you need to if you want your grandchildren to get it,
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Speaker 3: you need to be clear about it. Like in trust,
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Speaker 3: we're very clear that it goes to grandkids, and sometimes
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Speaker 3: we have it set up where it's held in trust
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Speaker 3: and it can even get to another generation below grand
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Speaker 3: kids to great grandkids.
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Speaker 1: Right.
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Speaker 3: That's called generation skipping tax planning, and it's usually done
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Speaker 3: in conjunction with you know, credit or protecting it and
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Speaker 3: divorce proofing it for the other kids. So in short
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Speaker 3: of all that, folks, I know there these joint accounts
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Speaker 3: can be set up for convenience purposes use the power
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Speaker 3: of attorney.
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Speaker 2: Yeah, you can accomplish the same thing.
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Speaker 3: Same thing. They're allowed to pay bills, access the accounts.
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Speaker 3: And at the same time they might not have language
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Speaker 3: in there that allows self dealing. Right in this case
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Speaker 3: she added accounts with the power of attorney. Well, in
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Speaker 3: that case, you know, maybe you've got a self dealing
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Speaker 3: clause in there. You don't want that, right, don't allow
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Speaker 3: them to do so. All things to think about, folks.
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Speaker 3: In this case, I think a will was helpful. At
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Speaker 3: least they had it, but it wasn't drafted right. Understand
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Speaker 3: plan than just a will eight six six eight four
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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 come when we return to the Legal Exchange
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Speaker 2: with Todd Lutsky.
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Speaker 1: You're listening to the Legal Exchange with Todd Lusky, an
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Speaker 1: That's eight sixty six eight four eight five six ninety nine.
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Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
14:29
Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
14:33
Speaker 2: and I'm joined by Todd Lutsky, a partner with the
14:36
Speaker 2: law firm of Cushing and Dolan with a masters in taxation.
14:40
Speaker 2: Where are we headed now, Todd?
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Speaker 3: We are headed over to Missouri where we have a will.
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Speaker 3: And I say a will is a won't but a
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Speaker 3: will is better than nothing at all. Yep. So if
14:50
Speaker 3: you're gonna at least do nothing, If you're gonna do nothing,
14:53
Speaker 3: at least do a will. Why, Here's what happened. It
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Speaker 3: allows intent to be pursued. The deceased's intent is critical.
15:03
Speaker 3: We've seen it not only with wills, but interpreting trust language.
15:08
Speaker 3: What did the decedent want? And we want that to happen,
15:14
Speaker 3: And that's how you can get to court. So again,
15:17
Speaker 3: do I think you need more than a will? I
15:19
Speaker 3: sure do, But let's run through this. So missus broy died.
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Speaker 3: I'm sorry. I did a will, a valid will. And
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Speaker 3: she had three kids, all treated equally, Diane, David, and Lisa.
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Speaker 3: All three of them cared for her during her declining health,
15:39
Speaker 3: But unbeknownst to David and Lisa, Diane took over the
15:43
Speaker 3: finances for mom in July of twenty fifteen, and then
15:49
Speaker 3: later in July, she was appointed durable power of attorney. Oh, okay. Well,
15:55
Speaker 3: in twenty sixteen September, Diane took Mom to a commercial
15:59
Speaker 3: to a and opened up an account in Diane's name
16:04
Speaker 3: as the primary owner. Kind of strange, and then they
16:08
Speaker 3: deposited eighty three thousand dollars into it, which was some
16:11
Speaker 3: inheritance that Mom got. Okay, So over the next two years,
16:16
Speaker 3: Diane moved about one hundred and forty thousand dollars into
16:18
Speaker 3: that account and took money out and put it into
16:22
Speaker 3: her own account over time. Well, as you might imagine.
16:28
Speaker 3: In October of twenty seventeen, missus broy died and Diane
16:33
Speaker 3: said she would equalize everything. She did not. You know,
16:38
Speaker 3: she said, don't worry, I'm going to take care of
16:40
Speaker 3: all you people. We're going to equalize everyone. She did not,
16:44
Speaker 3: So Lisa filed suit for breach of fiduciary duty, which
16:47
Speaker 3: makes sense self dealing. Obviously, she took money, and I
16:51
Speaker 3: don't know if she took it with the power of attorney.
16:53
Speaker 3: I assumed she did. And failure to maintain an estate plan.
16:58
Speaker 3: Why because she never filed the will that was validly drafted.
17:02
Speaker 3: I remember earlier I talked about the will that was
17:04
Speaker 3: validly bractic. She never filed it. Well, the trial court decided, yeah,
17:10
Speaker 3: you know. Diane claimed during the trial court arguments that hey,
17:15
Speaker 3: that money that I was reimbursing myself for expenses and
17:18
Speaker 3: care that I provided for mom. Of course, she produced
17:22
Speaker 3: no evidence that she provided such care. Right, so the
17:25
Speaker 3: trial court did say, yeah, self dealing, breach of fiduciary
17:28
Speaker 3: duty and failure to maintain an estate plan, you lose, Diane.
17:35
Speaker 3: Diane appealed, doesn't seem like a great thing to do.
17:39
Speaker 3: On appeal, she added some other arguments, Hey, an unprobated will, Well,
17:43
Speaker 3: that's not an estate plan at all. There's no intent
17:46
Speaker 3: here to have an estate plan. There's no force or
17:49
Speaker 3: full force and effect of this will. It like it
17:51
Speaker 3: doesn't exist. The donors intent doesn't matter. Well, the appellate
17:57
Speaker 3: court didn't see it that way. In fact, they said
17:59
Speaker 3: the donor intent is paramount, and simply ignoring a will
18:03
Speaker 3: would not allow. If you did that, everyone would just
18:06
Speaker 3: allow anybody to ignore a will, which would be the
18:08
Speaker 3: wishes of the decedent. You can't just decide not to
18:11
Speaker 3: file a will and ignore the intent. So, you know,
18:16
Speaker 3: in this case, they wanted the will was there, the
18:19
Speaker 3: intent was to treat the kids equally, and therefore they
18:22
Speaker 3: affirmed the trial court decision saying, yeah, you've reached your duty.
18:26
Speaker 3: You self dealed and allowed the kids to pursue damages
18:30
Speaker 3: for breach of fiduciary duty. That is why you do
18:34
Speaker 3: a plan, folks. You do a plan because you want
18:37
Speaker 3: to make sure your wishes and your intent is satisfied.
18:40
Speaker 3: Quite frankly, I think you can find and I'll show
18:43
Speaker 3: you in a minute the tips that we can learn
18:45
Speaker 3: from this why a trust would have been way better
18:48
Speaker 3: than just dealing with a power of attorney and a
18:50
Speaker 3: will here, not that they're not important, as I said that,
18:53
Speaker 3: but folks, learn how a trust can work for you
18:56
Speaker 3: a medicaid This this particular guide we're doing is dealing
18:59
Speaker 3: only with the irrevocable medicaid trust, unlocking the powers of them.
19:03
Speaker 3: It explains in a question and answer format with an example,
19:09
Speaker 3: all the things you can do and can't do with
19:10
Speaker 3: these trusts. I mean, can I put money in? Can
19:13
Speaker 3: I take money out? Can I invest the money? How
19:16
Speaker 3: is the income taxed? How if I have a house,
19:19
Speaker 3: can I live there? Can I sell it? What is
19:21
Speaker 3: the tax on selling it is there a gift when
19:24
Speaker 3: I create the trust, Folks, everything you need to know
19:26
Speaker 3: about how they work is in here. If you're not
19:29
Speaker 3: sure you ever needed one, this will help you decide
19:33
Speaker 3: whether you need one or not. Call and get the
19:35
Speaker 3: guide eight six six eight four eight five six nine
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Speaker 3: nine or Legal Exchange Show dot com again eight six
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Speaker 3: six eight four eight five six nine nine or Legal
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Speaker 3: Exchange Show dot com. And for once and once and
19:51
Speaker 3: for all, you'll know whether or not a medicaid trust
19:54
Speaker 3: is right for you. Okay, what else do I learn
19:59
Speaker 3: from this? I'm saying a will is a won't like
20:02
Speaker 3: I always say it is, But it's better than nothing
20:04
Speaker 3: because here, remember, at least we had the donor's intent
20:09
Speaker 3: to pursue their wishes, to say, hey, what did this
20:12
Speaker 3: person want and let's make sure that happens right now.
20:17
Speaker 3: Remember that's important. But it doesn't avoid probate. So many
20:22
Speaker 3: people still think having a will is my estate plan
20:25
Speaker 3: and avoids probate. It doesn't. It doesn't reduce the state taxes.
20:30
Speaker 3: I don't know if she was single at this point
20:31
Speaker 3: or if you're married. Of course you want to take
20:34
Speaker 3: advantage of both the state tax exemptions when you die,
20:38
Speaker 3: and a will that leaves all the assets to one
20:40
Speaker 3: spouse doesn't accomplish that, and it certainly doesn't protect assets
20:45
Speaker 3: from the nursing home. Now, I don't know if that
20:48
Speaker 3: was part of her desire here, but certainly all the
20:50
Speaker 3: assets she had would not have been protected.
20:53
Speaker 2: And she was in declining health she was.
20:56
Speaker 3: Yeah, So I mean, these are all things that you
20:59
Speaker 3: need to think about. As I said earlier, the trust
21:01
Speaker 3: does all this. The Medicaid trust would do all of
21:03
Speaker 3: this and keep you in very much control. It would
21:07
Speaker 3: avoid probate, it would protect assets from the nursing home.
21:10
Speaker 3: Now also, remember there's other protections that are going on here. Right.
21:15
Speaker 3: I agree, I want to avoid probate, I want to
21:17
Speaker 3: protect assets. That's all good, But what else can this
21:20
Speaker 3: trust do? Well, when you have a trust, right, you
21:23
Speaker 3: could have took all this money that she's under the
21:26
Speaker 3: power of attorney, she's transferring it, she's opening up accounts, right,
21:30
Speaker 3: you could have had all that money put into an
21:33
Speaker 3: account in the name of the irrevocable trust, and you
21:37
Speaker 3: could have had more than one trustee serving on it.
21:39
Speaker 3: So now with it in there, the money doesn't move
21:43
Speaker 3: so easily. Right now, you have some checks and balances
21:47
Speaker 3: over how that money is accessed and how it gets
21:49
Speaker 3: moved around. No longer is the power of attorney doing that. Now, remember, folks,
21:55
Speaker 3: it's so important to know that. Yes, powers of attorney
21:58
Speaker 3: are important, but they only allow you to act on
22:01
Speaker 3: behalf of.
22:02
Speaker 2: The individual, not as trustee.
22:05
Speaker 3: Right. They don't allow you to act on behalf of
22:08
Speaker 3: the trustee. And in this case, the trustee wasn't even
22:12
Speaker 3: the same person as the donor. Right, So it would
22:15
Speaker 3: have taken that off the table and allowed you know,
22:20
Speaker 3: a little more family protection. Not that's why we do
22:23
Speaker 3: our estate plan, but it's it is an added bonus
22:26
Speaker 3: when you have it.
22:27
Speaker 2: You know, when you have that complicated dynamic though amongst
22:30
Speaker 2: your children.
22:31
Speaker 3: I think you're right. Yeah, I think you're right, Susan so.
22:34
Speaker 3: And the other thing to think about with the power
22:35
Speaker 3: of attorney is remember you need to decide when you're
22:38
Speaker 3: drafting it what powers you give the attorney in fact? Right,
22:43
Speaker 3: you have to list the powers as to what you
22:46
Speaker 3: give that attorney in fact. And in this case, a
22:48
Speaker 3: lot of our powers of attorney can limit self dealing. Right.
22:53
Speaker 3: You could say, yeah, you could make gifts, that's okay,
22:57
Speaker 3: but you can't gift to yourself, or you can't make
22:59
Speaker 3: transfer out of an account to yourself. You can completely
23:02
Speaker 3: prohibit self dealing with the attorney. In fact, that may
23:07
Speaker 3: have helped here because I know when you're dealing with
23:10
Speaker 3: the power of attorney, you know the financial institution needs
23:13
Speaker 3: a copy, and when they have a copy, they would see, Oh,
23:16
Speaker 3: you're taking money out for yourself. Yep, you know you're
23:19
Speaker 3: not allowed to do that, So you could limit that
23:22
Speaker 3: and limit the time kind of gifting that you do.
23:25
Speaker 3: But to me, folks, and a state plan, you know,
23:28
Speaker 3: is way more than a will and a trust. While
23:32
Speaker 3: it does way more than a will, it also kind
23:35
Speaker 3: of adds a little bit of protection from bad family acts.
23:40
Speaker 3: Can you stop everything? No, families will be what families are,
23:44
Speaker 3: But at least do your planning so you have wishes,
23:47
Speaker 3: so you do more than a will offers. And this trust,
23:51
Speaker 3: this irrevocable trust, might be right for you, but to
23:55
Speaker 3: learn about it, you need to get the guide and
23:57
Speaker 3: understand how it works. This guide will tell you eight
24:00
Speaker 3: six six eight four eight five six nine nine, or
24:04
Speaker 3: our website Legal exchange show dot com and download it.
24:08
Speaker 1: There.
24:09
Speaker 2: You've been listening to Todd Lutsky, a partner with the
24:12
Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
24:15
Speaker 2: financial advisor with the Armstrong Advisory Group, and Todd will
24:19
Speaker 2: be answering your listener questions when we return to the
24:22
Speaker 2: legal exchange with Todd Lutsky.
24:25
Speaker 1: Elder life planning can be overwhelming, so make sure you're
24:29
Speaker 1: prepared or you could make costly mistakes that affect your
24:32
Speaker 1: overall plan. Irrevocable trusts are the most common type of
24:35
Speaker 1: trust that folks use for financial protection, and while they
24:38
Speaker 1: can be complicated to create, they help keep your assets
24:41
Speaker 1: safe because they contain specific protections that many of us need,
24:45
Speaker 1: like the possibility of eliminating your estate taxes. Cushing and
24:48
Speaker 1: Dolan are experts in elder lawn taxation and they can
24:51
Speaker 1: devise a plan that covers you in every area where
24:54
Speaker 1: issues can rise. Their new guide is called Unlocking the
24:57
Speaker 1: Power of Irrevocable Medicaid Trusts. Learn more about how these
25:00
Speaker 1: trusts can benefit your family by calling eight sixty six
25:04
Speaker 1: eight four eight five six nine nine right now. That's
25:07
Speaker 1: eight six six eight four eight five six nine nine,
25:10
Speaker 1: or you can request the guide right now by visiting
25:12
Speaker 1: Legal Exchange show dot com. The proceeding was paid for
25:15
Speaker 1: and the views expressed are solely those of Cushingan Dolan.
25:17
Speaker 1: Cushingan Dolan and or Armstrong Advisory may contact you offering
25:20
Speaker 1: legal or investment services. Cushingan Dolan and Armstrong Advisory do
25:23
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26:26
Speaker 6: Recent reports suggest that a record four point one million
26:29
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26:32
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26:34
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26:37
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26:40
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26:43
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26:46
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26:49
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26:52
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26:54
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26:57
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27:13
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
27:15
Speaker 1: registered investment advisor. Nothing in the ad or in any
27:17
Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
27:20
Speaker 1: your own financial, tax, intestate planning advisors before making any
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27:26
Speaker 1: You're listening to the Legal Exchange and it's time for
27:30
Speaker 1: Ask Todd, the segment where Todd will answer your questions
27:33
Speaker 1: about anything and everything that's included in the estate planning process.
27:37
Speaker 1: Once again, here's Todd, Lutsky and Susan Powers.
27:43
Speaker 2: Welcome back, Todd. We have a few questions from listeners.
27:46
Speaker 2: First question comes from Donna and Pembroke Mass and Donna writes,
27:50
Speaker 2: I have a special needs son that is highly functioning
27:52
Speaker 2: but not good with money. If I leave my estate
27:55
Speaker 2: all to my daughter, is there a way I can
27:58
Speaker 2: limit what she spends the funds on so there is
28:00
Speaker 2: money left for my son if needed. He's receiving benefits
28:04
Speaker 2: now and I don't want to make him ineligible if
28:06
Speaker 2: he receives an inheritance, and I don't want him to
28:09
Speaker 2: spend through that inheritance.
28:12
Speaker 3: Yes, so again another reason to do more than a will. Right.
28:15
Speaker 3: These trusts are designed to do just this, but it's
28:21
Speaker 3: all about how you draft them right and what can
28:23
Speaker 3: we do. I always tell people we can do pretty
28:26
Speaker 3: much anything you want. We just have to make the
28:30
Speaker 3: legal language work for you. So let's think about this
28:33
Speaker 3: for a minute. So if we've got a highly functioning
28:36
Speaker 3: special needs child, now I don't.
28:38
Speaker 2: He's receiving benefits.
28:40
Speaker 3: Right, So if they're receiving benefits, there's a couple of
28:42
Speaker 3: things to think about. What kind of trust would I do?
28:45
Speaker 3: Before I even worry about how I draft it right,
28:49
Speaker 3: I would first say to Donna, you know, I might
28:52
Speaker 3: want to protect my assets, so there's something left for
28:56
Speaker 3: this special needs child.
28:58
Speaker 6: Ye.
28:59
Speaker 3: If that's your attitude when you're creating your estate plan,
29:03
Speaker 3: then the irrevocable, perhaps irrevocable medicaid trust that we're talking
29:07
Speaker 3: about this month would be right for you. Again, depending
29:11
Speaker 3: on how much you're worth and the size of your
29:13
Speaker 3: estate and whatnot. So let's assume it is. So now
29:17
Speaker 3: we know the kind of trust we need, which is
29:19
Speaker 3: irrevocable for the protection. So there is money for this
29:23
Speaker 3: special needs child. Next, we don't want to, as she said,
29:28
Speaker 3: have it say, upon our death, the assets go to
29:33
Speaker 3: this child, free and clear of trust. We don't want that.
29:36
Speaker 3: If you did not, only would he blow it because
29:39
Speaker 3: he's bad with money, it would boot him off off
29:42
Speaker 3: of his governmental benefits. Yeah, most likely, assuming his governmental
29:46
Speaker 3: benefits are asset based and most are. Okay, Now what, well,
29:52
Speaker 3: what kind of language can we put in there? Well,
29:54
Speaker 3: we need a trustee, probably not him. So maybe there's
29:58
Speaker 3: a child that's serving as.
29:59
Speaker 2: Trust so his sister could be the trustee for him.
30:02
Speaker 3: Perfect, And again, don't give it to the sister and
30:06
Speaker 3: let the sister do it. That's bad. That exposes it
30:10
Speaker 3: to the sisters creditors. Every time the sister makes a transfer,
30:13
Speaker 3: it's a gift. There could be gift text, it's not
30:16
Speaker 3: worth it. Have it held in trust, a special needs
30:20
Speaker 3: trust share built into this irrevocable trust that we're talking about. Sisters. Now,
30:25
Speaker 3: the trustee and the language you put in there, so
30:28
Speaker 3: that the special needs child is not considered the owner. Right,
30:33
Speaker 3: The special needs language you put in is the trustee
30:37
Speaker 3: sister can make discretionary distributions in the trustee's sole discretion
30:43
Speaker 3: to this child, this sibling. You don't put standards on
30:49
Speaker 3: that way for whatever the need might be, which we
30:52
Speaker 3: won't know as life goes on. Yep, this trustee can
30:56
Speaker 3: make distributions to better that and so.
31:00
Speaker 2: So she could pay his rent, give him, you know,
31:02
Speaker 2: just regular walking around money and he wouldn't.
31:05
Speaker 3: Travel money risky exactly. You never know what there might
31:09
Speaker 3: be right that comes up. So this is a great
31:13
Speaker 3: way of allowing. This is a great way of providing
31:17
Speaker 3: protection for the money ultimately, so it's there when you die.
31:21
Speaker 3: Then it's available, but not owned by that special needs child.
31:27
Speaker 3: That child stays on governmental benefits. You have a sibling
31:30
Speaker 3: trustee who knows the siblings' needs, making discretionary distributions to
31:35
Speaker 3: better the life of that person. And then when that
31:37
Speaker 3: special needs person dies, don't stop there. The language can say,
31:41
Speaker 3: if there was children for that child, not knowing what
31:45
Speaker 3: the level of functionality is, it would go there. If not,
31:50
Speaker 3: it would come back to the other siblings. So, folks,
31:53
Speaker 3: it really can do what it needs to do. No
31:57
Speaker 3: need to disinherit and folks, this trust unlocking the power
32:02
Speaker 3: of medicaid irrevocable trust would have been the one probably
32:06
Speaker 3: for this this person. You need to understand if these
32:10
Speaker 3: are right for you. If you've been afraid of them
32:11
Speaker 3: in the past, you thought they're too restrictive, you thought
32:14
Speaker 3: that they are not right for you. Get this guide
32:17
Speaker 3: because in a very easy to read question answer format,
32:21
Speaker 3: it walks you through the day to day things that
32:24
Speaker 3: you can do and what you can't do in a
32:27
Speaker 3: question and answer format okay, and it explains the income tax,
32:32
Speaker 3: gift tax associated with it, and the estate tax benefits
32:36
Speaker 3: of doing it, all while explaining what you can and
32:39
Speaker 3: cannot do. Folks, this is for you. Unlocking the power
32:43
Speaker 3: of Medicaid irrevocable trusts eight sixty six eight four eight
32:47
Speaker 3: five six nine nine or Legal Exchange Show dot com
32:51
Speaker 3: again eight sixty six eight four eight five six nine
32:55
Speaker 3: nine or Legal Exchange Show dot com.
32:59
Speaker 2: Our last question from Tom and Falmouth, Mass and Tom writes,
33:04
Speaker 2: I am sixty eight and live with my longtime girlfriend.
33:07
Speaker 2: We are thinking about getting married, but are wondering if
33:10
Speaker 2: this is a smart move if one of us ends
33:12
Speaker 2: up in a nursing home. What are your thoughts?
33:16
Speaker 3: Wow, Well, you want to ruin a good thing? By
33:20
Speaker 3: getting married. So I would say, in this case, you
33:26
Speaker 3: really you're gonna have to. There's pros and cons with
33:28
Speaker 3: being married in general, but certainly there's pros and cons
33:31
Speaker 3: with being married. From attacks and a medicaid standpoint, they're
33:34
Speaker 3: different and they are different. So here it says, you know,
33:38
Speaker 3: I am sixty eight and live with this is my concern,
33:41
Speaker 3: live with my longtime girlfriend. So I'm assuming the girlfriend
33:46
Speaker 3: owns the house.
33:49
Speaker 2: I don't know if i'd interpret it that way. Okay,
33:52
Speaker 2: so maybe they own it together.
33:54
Speaker 3: Okay, so certainly if they, let's assume they own it jointly.
33:57
Speaker 3: I live with her, so we own this one item jointly,
34:00
Speaker 3: but everything else we probably keep separate. And to the
34:04
Speaker 3: extent you are not married, if one gets sick and
34:06
Speaker 3: goes in a nursing home, your assets are not exposed
34:10
Speaker 3: to the assets of the person who's sick. Because you're
34:13
Speaker 3: not married. You're not treated as a unit where we
34:16
Speaker 3: dump all of our empty all of our pockets on
34:18
Speaker 3: the table and put a big stack there and say,
34:20
Speaker 3: you know, let's decide what's at risk for a nursing home.
34:24
Speaker 3: So by not being married, you will protect your individual
34:29
Speaker 3: dollars problem I have is this house. If the house
34:34
Speaker 3: is jointly owned and your longtime girlfriend goes into a facility,
34:43
Speaker 3: they're going to say that the house is at risk
34:45
Speaker 3: because there's no spouse living there. You're not a spouse.
34:50
Speaker 2: It would be half, that's.
34:52
Speaker 3: Right, So now you're right, Susan to bring up only
34:54
Speaker 3: half would be at risk. But that really doesn't help
34:57
Speaker 3: for the person who's living there, because you can't live
34:59
Speaker 3: in half a ho So what would happen is if
35:03
Speaker 3: they're you know, smart enough to hire an attorney when
35:07
Speaker 3: they're applying for medicaid, at least the the Tom in
35:11
Speaker 3: this case, can you dodge the bullet where if they
35:16
Speaker 3: check a box that she intends to return home, then
35:20
Speaker 3: at least the house would be non countable for the moment,
35:24
Speaker 3: and she perhaps could get on medicaid depending on what
35:27
Speaker 3: her other assets are. But at least the house would
35:32
Speaker 3: be off the table for the moment, so Tom can
35:35
Speaker 3: wipe his brow and still live there temporarily. But they're
35:38
Speaker 3: going to put a lien on it, so when the
35:41
Speaker 3: longtime girlfriend dies, there'll be a lean on that house
35:46
Speaker 3: up to the amount of benefits received on behalf of
35:48
Speaker 3: the longtime girlfriend At that point, Tom, you're going to
35:52
Speaker 3: have to either buy out the house and then pay
35:57
Speaker 3: off the debt the mortgage, or you're going to have
36:00
Speaker 3: to sell the house, take your half and the other
36:03
Speaker 3: half will go to longtime girlfriend who's deceased, to state
36:07
Speaker 3: and they will pay off the nursing or the state
36:10
Speaker 3: and then life will go on. It doesn't seem like
36:14
Speaker 3: a good result for you.
36:16
Speaker 2: No, how do they avoid all that nonsense if you
36:19
Speaker 2: got married.
36:20
Speaker 3: If you got married, then you're now a spouse living
36:23
Speaker 3: in the house. It's automatically protected, non leanable, so now
36:27
Speaker 3: you don't have to worry and it's not leanable. So
36:29
Speaker 3: all very good things to be doing. But also all
36:35
Speaker 3: of your money is now at risk for the nursing
36:38
Speaker 3: home if you get sick. So if you're going to
36:40
Speaker 3: get married, I think it's it's a good idea as
36:42
Speaker 3: terms how to protect the house. But if you're going
36:44
Speaker 3: to get married, do an entire estate plan, set up
36:47
Speaker 3: one of these irrevocable trusts.
36:49
Speaker 2: Can they do separate plans if they get married.
36:52
Speaker 3: They can do separate plans. If they don't get married,
36:53
Speaker 3: set up two separate irrevocable trusts and treat you as
36:56
Speaker 3: single people take care of it. Folks, planning is the
36:59
Speaker 3: way to go. Get the guide eight six six eight
37:02
Speaker 3: four eight five six nine nine or Legal Exchange Show
37:06
Speaker 3: dot com and learn about the powers of Medicaid irrevocable trusts.
37:10
Speaker 2: If you have a question you would like to ask Todd,
37:13
Speaker 2: visit his website Legal Exchange Show dot com and click
37:16
Speaker 2: on the ask Tod tab. Maybe I'll be able to
37:19
Speaker 2: read your question on the air, and hopefully his answer
37:22
Speaker 2: will stop you from becoming one of his next real
37:25
Speaker 2: life stories. You've been listening to Todd Lutsky, a partner
37:28
Speaker 2: with the law firm of Cushing and Dolan. I'm Susan Powers,
37:32
Speaker 2: a financial advisor with the Armstrong Advisory Group. We'll be
37:36
Speaker 2: back with more after this quick break on the Legal
37:39
Speaker 2: Exchange with Todd Lutski.
37:41
Speaker 1: Elder life planning can be overwhelming, so make sure you're
37:44
Speaker 1: prepared or you can make costly mistakes that affect your
37:47
Speaker 1: overall plan. I Irrevocable trusts are the most common type
37:50
Speaker 1: of trust that folks use for financial protection, and while
37:53
Speaker 1: they can be complicated to create, they help keep your
37:56
Speaker 1: assets safe because they contain specific protections that many of
37:59
Speaker 1: us need. Like the possibility of eliminating your estate taxes.
38:03
Speaker 1: Cushing and Dolan are experts in elder lawn taxation and
38:06
Speaker 1: they can devise a plane that covers you in every
38:09
Speaker 1: area where issues can rise. Their new guide is called
38:12
Speaker 1: Unlocking the Power of Irrevocable Medicaid Trusts. Learn more about
38:15
Speaker 1: how these trusts can benefit your family by calling eight
38:18
Speaker 1: sixty six eight four eight five six ninety nine right now.
38:22
Speaker 1: That's eight six six eight four eight five six nine nine.
38:25
Speaker 1: Or you can request the guide right now by visiting
38:28
Speaker 1: Legal exchange show dot com. The proceeding was paid for
38:31
Speaker 1: and the views expressed are solely those of Cushing and Dolan.
38:33
Speaker 1: Cushing and Dolan and or Armstrong Advisory may contact you
38:35
Speaker 1: offering legal or investment services. Cushing and Dolan and Armstrong
38:38
Speaker 1: Advisory do not endorse each other and are not affiliated.
38:41
Speaker 4: When you stop working, you stop earning a paycheck, and
38:44
Speaker 4: if you don't have a good sense of what your
38:46
Speaker 4: plans are in retirement, you may be faced with some
38:48
Speaker 4: financial challenges. Hi this is Chuck Zada from the Armstrong
38:51
Speaker 4: Advisory Group. In order to retire comfortably without that financial strain,
38:55
Speaker 4: you can either reduce your expenses or find ways to
38:58
Speaker 4: replace your pre retirement in so that you can determine
39:01
Speaker 4: the kind of retirement lifestyle you can afford. Our new
39:04
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39:06
Speaker 4: of a Retiree, and you can get it right now
39:08
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39:12
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39:14
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39:17
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39:20
Speaker 4: calling eight hundred three nine three for zero zero one.
39:23
Speaker 4: That's eight hundred three nine three for zero zero one.
39:27
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
39:29
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39:32
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40:42
Speaker 1: Your tune to the Legal Exchange with Todd Lutsky. If
40:45
Speaker 1: you are a loved one needs a nursing homestay, call
40:47
Speaker 1: time right now at eight six six eight four eight
40:49
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40:52
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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 of course I'm joined by Todd Lutsky, a partner
41:11
Speaker 2: with the law firm of Cushing and Dolan with a
41:13
Speaker 2: master's in taxation. So, Todd, we're talking about these irrevocable
41:18
Speaker 2: medicaid trusts this month. Who should consider using one?
41:23
Speaker 3: Well, I think it's probably driven by a couple of factors.
41:27
Speaker 3: One size of the estate, right, I mean, if you
41:31
Speaker 3: have I don't even know what number to put on it,
41:33
Speaker 3: because it's sometimes based on the type of assets that
41:36
Speaker 3: you have. Like if you have a whole bunch of
41:38
Speaker 3: money tied up in a qualified plan account that you
41:39
Speaker 3: can't protect.
41:40
Speaker 2: Anybody retirement plan.
41:41
Speaker 3: Yeah, well that's a problem. Right. So I don't want
41:44
Speaker 3: to just say the size of the estate. But you know,
41:47
Speaker 3: I'm thinking if you're four million five million in up,
41:51
Speaker 3: you might start becoming more self insured. Right. But again,
41:55
Speaker 3: if I'm worth four million but my house is two million,
41:59
Speaker 3: well now I have different assets, not as much money perhaps,
42:03
Speaker 3: or maybe I got another rental property and so I'm
42:05
Speaker 3: tied up in real estate and not a lot of money. Well,
42:08
Speaker 3: so it really it really matters not only the size
42:11
Speaker 3: of the estate, but what makes upsets the estate. That's
42:15
Speaker 3: number one. Once you determined that yes, Medicaid planning is right,
42:18
Speaker 3: I got to do some protection for myself and my family.
42:22
Speaker 3: Then how old am I? Well, I mean I don't know.
42:26
Speaker 3: I use it just a rule of thumb, sixty sixty
42:29
Speaker 3: five and up. I'm going to ask the questions. You
42:32
Speaker 3: come in at fifty five and you have Parkinson's, Well, yeah,
42:34
Speaker 3: I mean I probably need to consider it. But I
42:37
Speaker 3: mean other than that, because you know, you figure fifty
42:40
Speaker 3: to fifty five, you know, in that area you still
42:43
Speaker 3: might have kids that are not that old yet, and
42:46
Speaker 3: and you know you're not ready to get into the
42:48
Speaker 3: irrevocable trust arena. It just not. But sixty sixty five
42:54
Speaker 3: it takes five years to protect it. So why wouldn't
42:57
Speaker 3: I at sixty five have it in my rear view
42:59
Speaker 3: mirror when.
43:01
Speaker 2: So protected from the nursing home specifically, correct.
43:04
Speaker 3: Yeah, I mean that's what when I'm thinking about the
43:06
Speaker 3: Medicaid trust. That's one of the driving forces behind medicaid,
43:11
Speaker 3: you know, behind using an irrevocable medicaid trust.
43:14
Speaker 2: Okay, So I know in the past you've mentioned because
43:17
Speaker 2: that word airyvocable is scary for a lot of folks.
43:20
Speaker 2: But you've also mentioned the past that the donor, the
43:22
Speaker 2: person creating the trust cannot be their own trustee. Why
43:27
Speaker 2: is that? And let's take away some of the frightening
43:30
Speaker 2: aspect of that.
43:31
Speaker 3: Sure Now, over the years, many of you are listening saying, oh, Todd,
43:34
Speaker 3: you did my trust and we did make you trustee.
43:36
Speaker 3: And that's true. Over the years we have had people
43:39
Speaker 3: be trustees of their trust. It's not the end all
43:42
Speaker 3: be all that there's a problem. It's just something I'm
43:45
Speaker 3: going to have to deal with when and if you
43:47
Speaker 3: apply for Medicaid. I've overcome the individual serving as trustee
43:52
Speaker 3: having to explain to them how as if I do
43:55
Speaker 3: share you, they still can't give to themselves even though
43:57
Speaker 3: they're the trustee and you know income beneficiary, they can't
44:02
Speaker 3: give principle because the trustee doesn't allow it. So I mean,
44:06
Speaker 3: so you can get past it. But I've decided over
44:10
Speaker 3: the years, why fight that battle, right, just no need
44:14
Speaker 3: to do it. And again, it's all about developing an
44:16
Speaker 3: estate plan over thirty years of practice to make it better.
44:21
Speaker 3: In this case, you don't have to feel bad that
44:23
Speaker 3: you're not the trustee because I give you the power
44:26
Speaker 3: to remove and replace the trustee. Why that's important is
44:29
Speaker 3: not only great for you because you can kick out
44:32
Speaker 3: the trustee anytime you want, but because you're really directing
44:35
Speaker 3: the trust now, you're really the one calling the shots
44:39
Speaker 3: right to a large degree. And then of course the trustee,
44:43
Speaker 3: with or without cause, you're allowed to just remove them
44:46
Speaker 3: at will and replace but not replace with you.
44:50
Speaker 2: You know, it's interesting because we have I can think
44:53
Speaker 2: of three off the top of my head mutual clients
44:56
Speaker 2: that did their trust with you years ago. They were
44:59
Speaker 2: their own true trustees, and for all three of those
45:02
Speaker 2: we have subsequently they have had their children step in
45:06
Speaker 2: and trustee and they've stepped out because they just don't
45:08
Speaker 2: want to do anything with it anymore.
45:10
Speaker 3: Yeah, lots of times they get tired of it. I
45:12
Speaker 3: don't need to be trust ee.
45:13
Speaker 2: They're realizing the cognitive decline and it doesn't matter for them.
45:17
Speaker 3: They don't they realize that they're not really losing anything
45:19
Speaker 3: by not being trustee. So, folks, this is just some
45:24
Speaker 3: of the things to think about with a medicaida of
45:26
Speaker 3: vocable trust And in this guide that's discussed who should
45:30
Speaker 3: be the trustee, who's the don oor right? Can I
45:33
Speaker 3: live in my house? Can I sell my house? Can
45:35
Speaker 3: I put a rental property in there? Can I get
45:37
Speaker 3: my rent when I put the rental property in there?
45:40
Speaker 3: What are the income tax ramifications of this? Is there
45:43
Speaker 3: a gift tax when I set it up? Folks? All
45:46
Speaker 3: of this is designed to explain to you the flexibility
45:50
Speaker 3: that you have in these medicaida of vocable trusts. Call
45:53
Speaker 3: and get the guide eight six six eight four eight
45:57
Speaker 3: five six nine to nine or legally change show dot
46:01
Speaker 3: com again eight six six eight four eight five six
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Speaker 3: nine to nine or legal Exchange show dot com.
46:08
Speaker 2: So Dodd, let me ask you this. If you're doing
46:11
Speaker 2: the irrevocable trust, it's primarily for that nursing home protection benefit.
46:18
Speaker 2: What happens if you don't go into a nursing home?
46:20
Speaker 2: Is it all for not?
46:21
Speaker 3: Yeah? And I think this is important because a lot
46:23
Speaker 3: of people, even when I'm explaining it, I'll get done saying, Look,
46:27
Speaker 3: the trust helps you avoid probate, the help the trust
46:30
Speaker 3: helps you reduce your estate taxes. If you're married. Remember,
46:33
Speaker 3: I've got marital shares and remainder shares built into these
46:37
Speaker 3: irovocable trusts to eliminate a state taxes or significantly reduce them,
46:41
Speaker 3: as the case may be. And so it also provides
46:45
Speaker 3: a bloodline plan for the family. And then I tell
46:47
Speaker 3: them it'll protect it from the nursing home in five years.
46:50
Speaker 3: And inevitably, Susan, they will say, just what you said.
46:53
Speaker 3: Oh so if I die before five years, this is
46:57
Speaker 3: a problem. I got to hang on for five more years. No, no, folks,
47:01
Speaker 3: I always say, dying is not the problem. Right, you
47:04
Speaker 3: can die right after you set this up. It's only
47:07
Speaker 3: the nursing home that takes five years, right. Everything else
47:12
Speaker 3: happens immediately. So you're asking me, what are the other
47:14
Speaker 3: benefits those everybody dies, not everybody goes to the nursing home.
47:19
Speaker 3: So by having the trust in place, you know that
47:23
Speaker 3: you are reducing a state taxes, you are avoiding probate,
47:27
Speaker 3: you are providing a bloodline plan to your family. Those
47:30
Speaker 3: things are happening right away and stepping up your cost basis.
47:34
Speaker 3: All of this is happening if you set the plan
47:37
Speaker 3: up today and die tomorrow.
47:38
Speaker 2: Okay, So that starts right away.
47:40
Speaker 3: Right away. It's funding the trust that creates the five
47:44
Speaker 3: year waiting period, and it's only if you enter a
47:47
Speaker 3: nursing home. Yeah. Yeah, but everybody thinks it's for everything.
47:50
Speaker 3: It's not.
47:51
Speaker 2: So you mentioned that you could fire your trustee if
47:54
Speaker 2: you wanted to replace them with someone else. What about
47:57
Speaker 2: how you're leaving your assets? Is it cast in stone
48:00
Speaker 2: that you know? This is how I set it up,
48:03
Speaker 2: and I can't never change my mind about how I'm
48:06
Speaker 2: leaving my stuff.
48:08
Speaker 3: So answer is no, it's not cast in stone. And
48:12
Speaker 3: I think that is probably one of the biggest reasons
48:16
Speaker 3: you're going to get this guide to learn about and
48:17
Speaker 3: I haven't even mentioned that right to learn about. The flexibility,
48:22
Speaker 3: the control, the changeability. How about that when you wouldn't
48:26
Speaker 3: think you'd hear the word changeability in connection with irrevocable trusts,
48:31
Speaker 3: but it exists now. It is a limited changeability. It's
48:35
Speaker 3: called a limited power of appointment. But it works like this.
48:40
Speaker 3: Once you set it up, you define the class of
48:43
Speaker 3: people that you want to get these assets when you die.
48:46
Speaker 3: Usually it could include children of all generations. It might
48:50
Speaker 3: say nieces and nephews, it might say siblings, depending on
48:53
Speaker 3: what you have in your family. So let's say it
48:57
Speaker 3: says children of all generations. So now I know I
49:02
Speaker 3: can change my trust during my life amongst that group.
49:07
Speaker 3: So I set it up two or three years later.
49:10
Speaker 3: I don't want to say five, because it doesn't matter
49:12
Speaker 3: for five. It could be any time you come back
49:15
Speaker 3: in and say, geez, Todd, we didn't have grandchildren. Always
49:18
Speaker 3: set this up. We now have two grandkids, and I
49:20
Speaker 3: would really like to leave ten percent of my estate
49:23
Speaker 3: to my.
49:23
Speaker 2: Grandkids because I like them a little better, a lot better.
49:26
Speaker 3: So yeah, come in and we can make that change.
49:30
Speaker 3: You don't have to be trustee to make that change.
49:32
Speaker 3: It is not a trustee issue. It's your choice as
49:36
Speaker 3: the creator of the trust. So you exercise this limited
49:40
Speaker 3: power of appointment to make that change. You could say
49:43
Speaker 3: one kid is struggling more than another, I need to
49:45
Speaker 3: give one a little more another one make the change.
49:50
Speaker 3: Flexibility is huge. Now, when I say limited, I mean
49:55
Speaker 3: there are limitations. Right. You can't come back in a
49:58
Speaker 3: year and say, I've been hanging out with cousin Vinnie.
50:02
Speaker 3: I'd like to give him ten percent.
50:04
Speaker 2: He's not in the group unless you name the cousins.
50:07
Speaker 3: Right, Unless you name the cousins. But in my example,
50:10
Speaker 3: I said children of all generations, so he wouldn't be
50:13
Speaker 3: in the group. You'd have to take care of him
50:15
Speaker 3: with some assets outside the estate. So, folks, flexibility does
50:19
Speaker 3: exist with these irrevocable trusts, among a lot of other
50:23
Speaker 3: things that you wouldn't have thought of, unlocking the power
50:26
Speaker 3: of Medicaid irrevocable trusts. Get the guide. It will teach
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Speaker 3: once and for all eight six six eight four eight
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Speaker 3: five six ninety nine or Legal Exchange show dot com.
50:43
Speaker 2: Todd Lutsky from the law firm of Cushing in Dolan,
50:46
Speaker 2: thank you so much.
50:47
Speaker 3: Thank you, Susan, always a pleasure.
50:49
Speaker 2: I'm Susan Power as a financial advisor with the Armstrong
50:52
Speaker 2: Advisory Group. We thank you for listening and we'll be
50:55
Speaker 2: back again next week on the Legal Exchange with Todd Lutsky.
51:00
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