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Estate planning for business owners · The Legal Exchange

0:01
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
0:07
Speaker 1: the Armstrong Advisory Group. Each week, Todd and Susan will
0:10
Speaker 1: discuss many topics, including estate planning, how to avoid probate,
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Speaker 1: and protecting your money from a nursing home. If you
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Speaker 1: need assistance in any of these areas, or have a
0:18
Speaker 1: question about another issue that may affect your future, call
0:21
Speaker 1: eight six six eight four eight five six ninety nine
0:24
Speaker 1: to make an appointment. That's eight sixty six eight four
0:27
Speaker 1: eight five six ninety nine. Operators are standing by. Now
0:31
Speaker 1: Here are your hosts, Tod Lutsky and Susan Powers.
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Speaker 2: Welcome into the Legal Exchange with Todd Lutsky. I'm Susan Powers,
0:41
Speaker 2: a financial advisor the Armstrong Advisory Group, and I'm joined
0:45
Speaker 2: by Todd Lutsky, a partner with the law firm of
0:47
Speaker 2: Cushing and Dolan with a master's in taxation. Welcome Todd.
0:51
Speaker 2: How are you today?
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Speaker 3: I am never better in you.
0:54
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: I tell you this week I've got two real life
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Speaker 3: stories which are to me sometimes better than cases because
1:02
Speaker 3: these are things that I've experienced firsthand. So here's the situation.
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Speaker 3: The first one is really about full planning with a family,
1:10
Speaker 3: things you don't think about. And this is a full
1:12
Speaker 3: plan plus multiple LLCs with businesses, rental properties, and we're
1:18
Speaker 3: going to learn about by sell agreements. We're going to
1:20
Speaker 3: learn about holding companies. We're going to learn about family
1:23
Speaker 3: planning and how important it is, especially when one of
1:26
Speaker 3: the partners in this case is not a family member.
1:28
Speaker 3: It's just a third party, so fifty to fifty, but
1:31
Speaker 3: you've got to take care of you both sides of
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Speaker 3: the family and the businesses, so it becomes really important
1:36
Speaker 3: to understand how the planning works. And then another one
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Speaker 3: was a second marriage situation which was kind of interesting
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Speaker 3: with one special needs child from the prior marriage and
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Speaker 3: the mother of the well not the mother, but the
1:51
Speaker 3: second wife in this case, not the mother. Yes, stepmom
1:55
Speaker 3: is not overly comfortable with this or good relationship, i
2:01
Speaker 3: should say, with this special needs child of the other.
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Speaker 3: So there's some gifting ideas in advance. How do we
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Speaker 3: take care of everybody, How do we do the planning
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Speaker 3: so that you know, we can care for the child
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Speaker 3: and the you know, second wife. So lots to think
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Speaker 3: about in this case. But folks, not all the time
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Speaker 3: does everybody have the ability to plan, And lots of
2:23
Speaker 3: times they'll find themselves faced with perhaps a nursing home
2:26
Speaker 3: situation and don't know what to do. Please don't write
2:30
Speaker 3: the check. Instead, call and get this guide Last minute
2:32
Speaker 3: Medicaid eligibility planning. It's going to help you understand what's
2:36
Speaker 3: countable and what's not. And every asset is different, a house,
2:40
Speaker 3: a vacation home, even jointly owned accounts with a spouse
2:44
Speaker 3: versus jointly owned accounts with individuals. What about life insurance?
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Speaker 3: Four to oh one ks, Folks, there are things that
2:51
Speaker 3: can be done to protect these assets last minute. Some
2:55
Speaker 3: are even not countable, some are accountable, different for married
2:58
Speaker 3: couple versus a single person. Call get the guide learn
3:02
Speaker 3: how to protect assets last minute from the Nursing Home
3:06
Speaker 3: eight six six eight four eight five six nine nine
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Speaker 3: or Legal Exchange Show dot com again eight six six
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Speaker 3: eight four eight five six nine nine or Legal Exchange
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Speaker 3: Show dot Com. Okay, folks, this is an interesting case.
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Speaker 3: We have husband and wife. They needed full plan. They
3:26
Speaker 3: have two kids, three grandkids. They also have a construction
3:29
Speaker 3: company in about six LLCs generally own rental properties, and
3:34
Speaker 3: of course they build rentals, and they build property and
3:37
Speaker 3: then sell it, and some they keep a lot of
3:39
Speaker 3: moving parts, a lot of moving parts here. The other
3:42
Speaker 3: moving part is that not only is it commercial and
3:44
Speaker 3: residential rental, but it's a fifty percent. The client owns
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Speaker 3: fifty percent and some third party owns fifty percent who
3:52
Speaker 3: actually handed up bringing into the meeting to help at
3:55
Speaker 3: a second meeting to do a stay planning for So
3:57
Speaker 3: everybody needs to take care of everybody here. And so
4:02
Speaker 3: with this we have to figure out they're worth about
4:05
Speaker 3: fifteen million, this one client, and they want to do
4:09
Speaker 3: a state plan. They obviously want to reduce their estate tax,
4:11
Speaker 3: they want to avoid probate, They want to provide for
4:14
Speaker 3: the kids, They want to divorce proof the assets for
4:16
Speaker 3: the kids. They want a generation skip for the kids,
4:20
Speaker 3: you know, save taxes that way. And of course finally
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Speaker 3: they need to make a plan for the business to
4:27
Speaker 3: take care of the surviving partner, to make sure the
4:30
Speaker 3: assets go to the surviving partner. But we don't disinherit
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Speaker 3: the family of the decendent. And interestingly enough, as you
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Speaker 3: might imagine in this particular case. I shouldn't say it's
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Speaker 3: all the time, but in this particular case, both spouses
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Speaker 3: are not involved in the business.
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Speaker 2: So it's could be a nightmare if you don't have
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Speaker 2: your proper planning in place.
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Speaker 3: Right, So they really want to make sure you take
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Speaker 3: care of you know, if owner one dies, owner one
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Speaker 3: spouse does not want to run or be involved with owner.
5:02
Speaker 2: She wants to get bought out.
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Speaker 3: Yeah, and that's really what's important here. So let's take
5:06
Speaker 3: a peek at tall order, but certainly handle you can
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Speaker 3: handle this right, So state planning side right. First thing is,
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Speaker 3: you know, we need to set up the basic estate
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Speaker 3: planning for the family. In this case, they still are
5:19
Speaker 3: of the size that a one joint revocable trust would work.
5:23
Speaker 3: We can put all the assets in. Most importantly, as
5:26
Speaker 3: I say fund the trust, I have so many clients
5:29
Speaker 3: that come in that even say, I listened to you
5:30
Speaker 3: on the radio and you say fund the trust. We're
5:32
Speaker 3: going to make sure we fund the trust. So apparently
5:34
Speaker 3: I'm saying it.
5:35
Speaker 2: Learn lessons from other's mistakes.
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Speaker 3: And so we would deed the house to the trust.
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Speaker 3: We would change the homeowner's insurance, we would add investment
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Speaker 3: property to the trust, retitle all the assets to the trust,
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Speaker 3: and we use their social Security numbers, so no need
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Speaker 3: to understand or worry about filing an income tax return
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Speaker 3: for this trust. Then, of course the LLC shares, we
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Speaker 3: have to take those and transfer them to the trust.
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Speaker 3: Got to put the shares of the LLC in. From
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Speaker 3: an estate tax standpoint, of course, we're simply going to
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Speaker 3: have the remainder share in the marital share set up.
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Speaker 3: And with this joint trust on a fifteen million dollar estate,
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Speaker 3: we're going to really be able to cram down the
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Speaker 3: whole thirteen point nine to nine million, which is the
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Speaker 3: current exemption. Although the BBB just passed, so we've got
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Speaker 3: new estate tax exemptions to talk about. And so in
6:24
Speaker 3: this case, you know you're gonna put eleven point nine
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Speaker 3: million in the q TIP share, two million in the
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Speaker 3: remainder share. There's your thirteen point nine million sheltered for
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Speaker 3: federal tax and only one point one million goes in
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Speaker 3: the general marital share to be taxed later when the
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Speaker 3: spouse dies. So federally, when the spouse dies, she's worth
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Speaker 3: one point one wow wow.
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Speaker 2: Because if they didn't do planning, they would have huge
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Speaker 2: estate taxes on the federal.
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Speaker 3: Level, big problems. So and then from Massachusetts we would
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Speaker 3: just make an election for the eleven nine. Now, of
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Speaker 3: course we're going to treat the kids equally. We're going
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Speaker 3: to divorce proof the language in there where it's going
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Speaker 3: to be generation skipping. That's the basic part, folks. We
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Speaker 3: talk about that a lot. But I want to save
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Speaker 3: a little time for the corporate side here.
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Speaker 2: And that works regardless of the size of your estate
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Speaker 2: if you have that, right.
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Speaker 3: Yeah, it does. The basic plan, The basic plan is
7:12
Speaker 3: going to work you small or larger. If you get
7:14
Speaker 3: too large, I would probably go to two trusts. Yeah,
7:17
Speaker 3: but under general Yeah, today we got the almost fourteen
7:21
Speaker 3: million each, so you could shelter twenty eight million. Now,
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Speaker 3: corporate side very important, right, So what I suggested was
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Speaker 3: I had all these LLCs, all these single these these
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Speaker 3: LLCs which were two owners, right, two separate owners. And
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Speaker 3: so what I suggested is, why don't we set up
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Speaker 3: a holding company and put all of these sub all
7:43
Speaker 3: these LLCs as subllc's.
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Speaker 2: And what's the benefit of doing that time?
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Speaker 3: So, now the six LLC's underneath are owned one hundred
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Speaker 3: percent by a holding company. So they're now all single member.
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Speaker 2: LLC's tax returns.
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Speaker 3: Yeah. Instead of filing six individual income tax returns for
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Speaker 3: those LLCs, now they only have to file one for
8:02
Speaker 3: the holding company. Nice, and the holding company will be
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Speaker 3: owned fifty percent by my client and fifty percent by
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Speaker 3: the partner who might ultimately become a client, and so beautiful.
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Speaker 3: They would loved the efficiency of that. And then you
8:16
Speaker 3: know again it's but you still have the individualized protection.
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Speaker 3: So if someone gets sued on property number one, they
8:25
Speaker 3: can only sue LLC number one, even though it's a
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Speaker 3: sub of the holding company. They can't sue any of
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Speaker 3: the other companies or the shareholders personally. Home run win.
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Speaker 2: And how do you address the spouses in buying them out?
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Speaker 3: If so? Yeah, Now we explain we need to buy
8:41
Speaker 3: sell agreement right across purchase agreement, and we know this
8:44
Speaker 3: is the way to go. So you would set up
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Speaker 3: life insurance on owner one and owner two, so owner
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Speaker 3: one would own life insurance on owner two, and owner
8:53
Speaker 3: two would own life insurance on owner one. Now, in
8:55
Speaker 3: these buy sell agreements, there's an obligation to buy it out.
8:58
Speaker 3: You can have other trigger evans. It's like selling or
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Speaker 3: retirement or it doesn't have to just be death, but
9:04
Speaker 3: let's talk about the death one. So this way in case,
9:07
Speaker 3: let's say my client who's a little older dies, say
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Speaker 3: he's Owner one, Owner one. Owner two has life insurance
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Speaker 3: on Owner one.
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Speaker 2: And he owns that personally.
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Speaker 3: Other business owns it personally. Absolutely important that we do that.
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Speaker 3: Now all the money flows to Owner one income tax
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Speaker 3: free because it's life insurance. Owner two, who died has
9:27
Speaker 3: stock that got a step up in basis on the
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Speaker 3: date of death, and now Owner one buys out Owner
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Speaker 3: two obligation. But there's no capital gain because we had
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Speaker 3: to step up in basis and all you do is
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Speaker 3: swap the assets, so there's no double inclusion for state
9:43
Speaker 3: tax purposes. And now you had money to take care
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Speaker 3: of the surviving n to take care of the deceit
9:49
Speaker 3: and spouse whose decedents spouse the side of the family,
9:53
Speaker 3: so you can still take care folks, these buy sell
9:56
Speaker 3: agreements are important. So I know it a lot to
10:00
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Speaker 2: You've been listening to Todd Lutsky, a partner with the
10:22
Speaker 2: law firm of Cushing and Dolan. I'm Susan Power as
10:25
Speaker 2: a financial advisor with the Armstrong Advisory Group. We have
10:29
Speaker 2: much more to come when we return after this quick
10:31
Speaker 2: break on the Legal Exchange with Todd Lutsky.
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14:23
Speaker 2: Welcome back into the legal exchange with Todd Lutsky. I'm
14:26
Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
14:30
Speaker 2: and I'm joined by Todd Lutsky, a partner with the
14:32
Speaker 2: law firm of Cushing and Dolan with a masters in taxation.
14:37
Speaker 2: Where are we headed down, Todd.
14:38
Speaker 3: We are going to talk about another real story, real
14:43
Speaker 3: life story. I've got a second marriage situation and a
14:48
Speaker 3: step mom and the father of this one child is
14:53
Speaker 3: special needs. So he comes to the marriage with one daughter.
14:57
Speaker 3: She's the stepmother doesn't get along well with this daughter.
15:01
Speaker 3: So let's see. But in this case, you know, they
15:04
Speaker 3: came in to do planning, you know, but it's the
15:06
Speaker 3: second marriage. And again, this this special needs child is
15:09
Speaker 3: not is highly functional by the way, not even getting
15:12
Speaker 3: any governmental benefits at the moment, actually went to college,
15:15
Speaker 3: but is learning disabled. There's there's issues, sure, and and however,
15:21
Speaker 3: the problem we have here is that the feeling is
15:25
Speaker 3: that the wife, the stepmother doesn't really care much for
15:30
Speaker 3: this special needs child. And and the relationship isn't horrible,
15:35
Speaker 3: but it doesn't appear that it's great either.
15:39
Speaker 2: Not something you'd have a good faith in after you.
15:41
Speaker 3: Pass yeah, I think that's what he's worried about. Right.
15:43
Speaker 3: She she she didn't bring a lot to the marriage,
15:47
Speaker 3: but you know he did. He did have some family member.
15:52
Speaker 3: She did have some family members and siblings and nieces
15:54
Speaker 3: and nephews that that you know, she would want to
15:56
Speaker 3: provide for. But it's mainly this this daughter. So what
16:01
Speaker 3: do they have. They've got a two million dollar home,
16:04
Speaker 3: They've got another million dollar home that he's actually letting
16:07
Speaker 3: the daughter live in now. And you know, he says,
16:13
Speaker 3: he says that they have another eight million or so
16:16
Speaker 3: of investments, so call it eleven million, okay, total assets,
16:21
Speaker 3: and they had no estate planing done at all. Like okay,
16:24
Speaker 3: well that's shocking in and of itself. And so he's saying,
16:28
Speaker 3: I really want to gift away, you know, assets right
16:31
Speaker 3: now to my daughter, like the house that she lives in,
16:34
Speaker 3: and you know, maybe like four million dollars to give
16:37
Speaker 3: it away now right now. I'm like, okay, Well, why
16:40
Speaker 3: he goes Well, because I travel a lot, and every
16:42
Speaker 3: time I get on the plane, I'm afraid if something
16:44
Speaker 3: happens to me, my current wife, the stepmother of my daughter,
16:49
Speaker 3: would not really care for her, try not really provide
16:53
Speaker 3: for her and take care of her. So I'm I'm
16:56
Speaker 3: worried about that. So I really want to get taken
17:00
Speaker 3: care of by making a gift. So I said, okay,
17:04
Speaker 3: well we can do that. And it's going to be
17:07
Speaker 3: very important obviously to do your own basic estate planning
17:10
Speaker 3: as well, take care of taxes and probate, and how
17:12
Speaker 3: are we going to care for the surviving spouse and
17:14
Speaker 3: her side of the family. So we have to deal
17:16
Speaker 3: with this whole issue. And initially she wasn't at the meeting,
17:23
Speaker 3: so I said, well, obviously we're going to need to
17:25
Speaker 3: bring her in. We're going to have to explain all
17:26
Speaker 3: this to her, and so what do we what can
17:31
Speaker 3: we really learn from this? So this is a situation
17:34
Speaker 3: where you know when not only is second marriage is important.
17:38
Speaker 3: Anyone who's listening has second marriage, please do your estate planning.
17:42
Speaker 3: But we have second marriages and special needs child potentially,
17:47
Speaker 3: so we've got a lot of issues here and when
17:49
Speaker 3: you're in that situation, you really need to do your planning. Now,
17:53
Speaker 3: I say that before I give you what I think
17:55
Speaker 3: the tips and lessons are on this, just want to
17:57
Speaker 3: remind you about the guide for this month. Obviously, you've
18:00
Speaker 3: got to do planning for something like this, but you
18:04
Speaker 3: may need to plan to protect assets from the nursing home,
18:06
Speaker 3: but unfortunately you don't always get to it, and so
18:09
Speaker 3: people find themselves heading into a nursing home that haven't
18:13
Speaker 3: done any planning. Or if you've done planning, you've always
18:16
Speaker 3: leave stuff outside the trust like iras, et cetera that
18:20
Speaker 3: need to be protected. So this guide is really for
18:23
Speaker 3: anybody who did planning, who didn't do planning, but is
18:26
Speaker 3: entering a nursing home. Don't just write the check. Learn
18:30
Speaker 3: how each asset is treated differently. Married couples and single
18:33
Speaker 3: people also treated differently, so from homes to rental properties
18:38
Speaker 3: to four h one case to annuities to you know,
18:41
Speaker 3: what is there that can be done with these assets?
18:44
Speaker 3: And learn the few ways you can avoid the five
18:46
Speaker 3: year waiting period on certain assets and certain situations. Get
18:51
Speaker 3: the guide eight six six eight four eight five six
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Speaker 3: nine to nine or Legal Exchange Show dot com. It's
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Speaker 3: packed with information eight six six eight four eight five
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Speaker 3: six ninety nine or Legal Exchange Show dot com. Okay,
19:08
Speaker 3: what are we gonna do for these people? So I
19:11
Speaker 3: started to explain, you know, all right, do we want
19:15
Speaker 3: to make a gift now, generally, when you have and
19:18
Speaker 3: for everybody listening, if you generally just have a first
19:21
Speaker 3: marriage and it's a special needs situation, you don't need
19:26
Speaker 3: to set up a gifting trust now, right, Just provide
19:30
Speaker 3: for it inside.
19:32
Speaker 2: You're the creation of it later.
19:34
Speaker 3: Yeah, in your trust, in your regular family trust that
19:37
Speaker 3: you put together, simply just put in there, you know,
19:39
Speaker 3: a share that is a special needs trust share built
19:42
Speaker 3: in for that particular child, and you can do it.
19:45
Speaker 3: So you don't. That's the first comment. You don't. Everybody listening,
19:48
Speaker 3: you don't have to do it like this. But in
19:51
Speaker 3: this case, I understand the position. Sure, I understand what
19:54
Speaker 3: he's saying. Then of course you think, is it easy
19:57
Speaker 3: to do this? Well, it's not always easy. You got
19:59
Speaker 3: to think about how he wanted to make an outright gift.
20:02
Speaker 3: I'm like, an outright gift is not a good idea.
20:04
Speaker 2: So he wanted to just give it to her her name,
20:08
Speaker 2: that's into a gifting trust exactly.
20:10
Speaker 3: That's what it sounded like when he came in and
20:12
Speaker 3: I said, oh, oh, slow down. You know this is where attorneys,
20:15
Speaker 3: this is where your counsel really comes in. And I said,
20:18
Speaker 3: you know, an outright gift is probably not going to
20:20
Speaker 3: be a good idea. I mean, in this case, it
20:22
Speaker 3: would prevent her from getting any governmental benefits that she
20:25
Speaker 3: might be entitled to, either currently or or in the
20:29
Speaker 3: future if she needs them, because I guess right now
20:32
Speaker 3: she's not currently on any. I said, not to mention
20:35
Speaker 3: the fact that there's creditor problems right if she gets married,
20:38
Speaker 3: or or because she's got some level of disability.
20:44
Speaker 2: And advantage of very easily exactly.
20:46
Speaker 3: Where I was headed. I go, she could either get
20:48
Speaker 3: married and get to force the divorce and to take
20:50
Speaker 3: advantage that way, or someone manipulates her with money, you know.
20:55
Speaker 3: So I can't say enough that an outright gift is
20:59
Speaker 3: not wait.
21:00
Speaker 2: Not a great idea for sure.
21:02
Speaker 3: So I said, all right, let's do an irrevocable gifting trust.
21:05
Speaker 3: And that's fine. We do this for clients all the time,
21:08
Speaker 3: especially higher net worth clients. And then we need to
21:11
Speaker 3: decide do we want to make it a completed gift
21:13
Speaker 3: or an incomplete gift. Because we don't necessarily have to
21:17
Speaker 3: make it an incomplete gift, I mean a completed gift,
21:21
Speaker 3: it could still be an irrevocable trust set aside to
21:23
Speaker 3: take care of this daughter. The reason I say that
21:27
Speaker 3: is because they're worth about what I say, eleven million
21:29
Speaker 3: or so. Yep, for a state tax purposes. When you
21:32
Speaker 3: think about completed gifts, there's no benefit. This person's already
21:38
Speaker 3: not going to pay any estate taxes if you just
21:40
Speaker 3: did basic estate planning. Now, the reason I say that
21:45
Speaker 3: is because if I if I give it away, I'm
21:49
Speaker 3: trapping twenty eight percent capital gains taxes.
21:51
Speaker 2: Right and you have to imagine that for a million
21:53
Speaker 2: dollar home that she's living in and another four or
21:56
Speaker 2: five million in investments, there's got to be some capital.
21:59
Speaker 3: Gain there exactly. So I asked them about the investment portfolio.
22:02
Speaker 3: I said, look, the difference is Massachusetts only has a
22:05
Speaker 3: ten percent of state tax. I get it. If you
22:07
Speaker 3: make a gift, it's going to help you for mass
22:10
Speaker 3: for sure, because you can only shelter four million dollars
22:13
Speaker 3: for mass right. But if you make a gift federally,
22:16
Speaker 3: it's not going to help because you could keep everything,
22:19
Speaker 3: pay no federal tax forty percent and increase the basis
22:24
Speaker 3: to eliminate any twenty eight point eight percent capital gains tax. Yep.
22:28
Speaker 3: That's a lot of tax. Sure is yeah, I'll give
22:30
Speaker 3: Massachusetts ten percent any day of the week.
22:33
Speaker 2: Right on five million. You know, it's trusts a lot
22:35
Speaker 2: of money.
22:36
Speaker 3: So in this case, we found out that there's a
22:38
Speaker 3: there's a good chunk of assets in there that kind
22:40
Speaker 3: of high basis. So I said, oh, well, those are
22:43
Speaker 3: available for gifting. So and couple that with the fact
22:45
Speaker 3: that you really want to just make sure that this
22:48
Speaker 3: trust takes care of the daughter, and so I get it.
22:51
Speaker 3: So we're probably gonna end up making it a completed
22:53
Speaker 3: gift for gift tax purposes, but that's it's critical. But
22:57
Speaker 3: then I explained to them during life, we'll make it
23:01
Speaker 3: and a grant tor trust. So all the income that's
23:06
Speaker 3: generated you can continue to pay the income taxes on
23:09
Speaker 3: even though you're not earning it client at a lower
23:12
Speaker 3: rate than the trust. And that's like gifting on steroids,
23:16
Speaker 3: because the government doesn't call that payment of the tax
23:20
Speaker 3: on money. You don't actually get a gift to the trust.
23:23
Speaker 3: So now you're further reducing your estate and you're paying
23:26
Speaker 3: lower income taxes at the same time. So, folks, these
23:30
Speaker 3: are things to think about. And you know, it wasn't
23:33
Speaker 3: obviously we have to do an entire estate plan for
23:35
Speaker 3: him as well. I said, you got to bring your
23:38
Speaker 3: wife in and we need to do an estate plan.
23:40
Speaker 3: But now we've moved five million dollars out of the estate,
23:43
Speaker 3: so their Massachusetts of state tax is now going to
23:46
Speaker 3: be on the remaining five minus the four we can protect.
23:49
Speaker 3: They're only paying taxes on one, So huge help folks. Again,
23:53
Speaker 3: some people can't plan. If you're faced with nursing home care,
23:56
Speaker 3: Last Minute get the guide eight six six eight four
23:59
Speaker 3: A eight five six nine to nine or Legal Exchange
24:03
Speaker 3: show dot com. You can download it right there.
24:06
Speaker 2: You've been listening to Todd Lutsky, a partner with the
24:08
Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
24:11
Speaker 2: financial advisor with the Armstrong Advisory Group. Todd will be
24:15
Speaker 2: answering your listener questions when we return to the Legal
24:18
Speaker 2: Exchange with Todd Lutsky.
24:21
Speaker 1: Changes to Medicaid occur almost every year, and if you're
24:24
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24:27
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24:30
Speaker 1: Dolan are experts in elder lam and their new guide
24:32
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24:36
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24:39
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24:42
Speaker 1: regarding numerous strategies that can protect your assets from the
24:45
Speaker 1: nursing home. It could be your primary home, a vacation home,
24:48
Speaker 1: or any rental property you may own. You've worked hard
24:50
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24:53
Speaker 1: to protecting it. Get your copy of Cushing and Dolan's
24:55
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Speaker 1: Now eight four eight five six nine nine. That's eight
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Speaker 1: six six eight four eight five six nine nine, or
25:05
Speaker 1: you can request it online by visiting Legal exchangshow dot com.
25:09
Speaker 1: That's Legal exchange show dot com. The proceeding was paid
25:12
Speaker 1: for in the use expressed are solely those of Cushing
25:14
Speaker 1: and Dolan. Cushing and Dolan and or Armstrong Advisory may
25:16
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25:19
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25:21
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27:25
Speaker 1: the Legal Exchange and it's time for Ask Todd, the
27:29
Speaker 1: segment where Todd will answer your questions about anything and
27:32
Speaker 1: everything that's included in the estate planning process. Once again,
27:36
Speaker 1: here's Todd Lutsky and Susan Powers.
27:41
Speaker 2: Welcome back, Tod. I have a few questions from listeners
27:43
Speaker 2: for you. First one's pretty simple, but I like this
27:46
Speaker 2: question from Michael and Hubbardston Mass and Michael writes, my
27:50
Speaker 2: wife and I are looking to get a will and
27:52
Speaker 2: protect our assets from a nursing home. What is our
27:56
Speaker 2: first step into this process? I think a lot of
27:59
Speaker 2: people don't know where to say start.
28:00
Speaker 3: Yeah, obviously you need to find a lawyer. I would
28:03
Speaker 3: say start there, but you know, I joke about it,
28:06
Speaker 3: but start with a you know, an elder law lawyer
28:10
Speaker 3: or an estate tax planning lawyer. You kind of kind
28:14
Speaker 3: of find both. I mean, I mean I obviously happen
28:16
Speaker 3: to do both, but you need both. You need someone
28:18
Speaker 3: who understands nursing home rules, but you also need someone
28:23
Speaker 3: who understands tax laws. You can't do really one without
28:28
Speaker 3: the other. Every seminar I give, I start off by
28:31
Speaker 3: telling the folks that are out there, and a lot
28:33
Speaker 3: of them are lawyers, and I say, look, you know
28:36
Speaker 3: so many of you are practicing elder law. But remember,
28:40
Speaker 3: you can't do this if you don't understand the taxes.
28:43
Speaker 3: You've got to make sure this trust is designed for
28:45
Speaker 3: income tax purposes, capital gains tax purposes, gift a state
28:50
Speaker 3: tax purposes. You've got to cover all those bases, because
28:53
Speaker 3: let's face it, you may set the trust up, but
28:57
Speaker 3: not everyone goes to the nursing home, but they all
29:01
Speaker 3: and so you need to know how to handle that
29:04
Speaker 3: side of it as well. So that would be my
29:06
Speaker 3: first step in telling you to find a lawyer like that.
29:10
Speaker 2: So you find your attorney. What do you need to
29:13
Speaker 2: consider when you're going into that meeting, Todd? What do
29:16
Speaker 2: you have to bring a lot of stuff with you?
29:18
Speaker 2: Do you need a list of stuff? Like what do
29:19
Speaker 2: you do?
29:20
Speaker 3: Yeah? I would say gather You don't really have to
29:22
Speaker 3: spend a lot of time, just in your mind a
29:24
Speaker 3: good idea of what you own and how you own it,
29:31
Speaker 3: meaning is it joint, is it in just one name,
29:34
Speaker 3: is it in a trust? And then also the value
29:40
Speaker 3: of what it is.
29:41
Speaker 2: That'll determine what your solution is, what your recommendation is correct.
29:45
Speaker 3: Yeah, it'll drive the estate plan. So again, what you own,
29:50
Speaker 3: how you own it, and what it's worth roughly now
29:54
Speaker 3: that's the basics. If, on the other hand, you happen
29:58
Speaker 3: to have an exist trust in place, I'm not worried
30:02
Speaker 3: so much about a will or a health care proxy
30:05
Speaker 3: or popertaarty. I don't need to see those, but I
30:08
Speaker 3: would need to see an existing trust, because again, once
30:11
Speaker 3: we determine what your objectives are, then I generally look
30:16
Speaker 3: at that existing trust and I say, is this trust
30:21
Speaker 3: doing what you want to do today?
30:24
Speaker 2: So in the case of Michael, he if he had
30:27
Speaker 2: a revocable trust in place, but now he's saying they
30:31
Speaker 2: want to protect assets from a nursing home, that would
30:33
Speaker 2: mean that revocable trust wouldn't meet those objectives correct.
30:37
Speaker 3: Right, So at the end of the day I would
30:40
Speaker 3: have gone through this question and answer session, I would
30:43
Speaker 3: have determined what their goals are today, what their estate's worth,
30:47
Speaker 3: what the objectives are, and then in that list, obviously
30:52
Speaker 3: I would have asked one of them would have been
30:53
Speaker 3: do you want to protect assets from the nursing home?
30:56
Speaker 3: So if that now is on the list, along with taxes,
31:00
Speaker 3: obate and bloodline planning, then I can look at the
31:03
Speaker 3: trust and if that trust is revocable, my first comment
31:06
Speaker 3: would be I don't need to read it any further.
31:09
Speaker 3: One minute I see the word revocable amendable, I'm going
31:13
Speaker 3: to say we are not accomplishing your current objectives with
31:18
Speaker 3: this document because it's revocable.
31:21
Speaker 2: And they change over time. Yeah, those objectives.
31:23
Speaker 3: That's right, that's exactly right. So you pick up the
31:25
Speaker 3: phone and you say, hey, I got to follow up
31:27
Speaker 3: on my existing estate plan. Call your lawyer, say I
31:30
Speaker 3: want to review if you want to and see. Sometimes
31:33
Speaker 3: the review takes five minutes and you're in good shape.
31:36
Speaker 3: But in this case I would tell the client, no,
31:38
Speaker 3: you would need to start over right and then likely
31:42
Speaker 3: But if on the other hand, that wasn't on there
31:44
Speaker 3: and I read the document and it said, hey, yeah,
31:46
Speaker 3: it looks like it's doing what you wanted to do,
31:48
Speaker 3: I send them on their way. No reason to recreate
31:51
Speaker 3: the wheel if it's doing what it needs to be doing,
31:55
Speaker 3: so it's practical for me, that's how I do it. So, folks,
31:58
Speaker 3: that's a great, great question actually in terms of how
32:01
Speaker 3: to get started. But you also might want to know
32:03
Speaker 3: how do you get started? If you walk into a
32:05
Speaker 3: nursing home and you're in that situation, now, what do
32:08
Speaker 3: you do? Well, you might not have done any planning,
32:10
Speaker 3: but this guide will help you face with that information
32:14
Speaker 3: about that situation. Excuse me. You can simply learn about
32:19
Speaker 3: how assets are treated, what's countable, what's not countable in
32:23
Speaker 3: a married couple situation when one is sick and one isn't,
32:26
Speaker 3: versus a single person situation. Sometimes these accountability assets accountable
32:33
Speaker 3: and non countable. Asset status is different for married versus
32:37
Speaker 3: single people. Rental properties, homes, vacation homes, four H one,
32:42
Speaker 3: k's life insurance folks, they're treated differently, and there's even
32:46
Speaker 3: some exceptions to the five year rule and some transfers
32:50
Speaker 3: that can be made last minute. These are This kind
32:54
Speaker 3: of information is in the guide eight six six eight
32:58
Speaker 3: four eight five six nine or Legal Exchange Show dot com.
33:02
Speaker 3: Just don't write the check. Get the guide first eight
33:06
Speaker 3: six six eight four eight five six nine nine or
33:10
Speaker 3: Legal Exchange Show dot com.
33:13
Speaker 2: Our last question comes from Dawn in Warwick, Rhode Island,
33:16
Speaker 2: and Don writes, my mother passed away recently, and I'm
33:19
Speaker 2: concerned about a substantial inheritance that I will be receiving
33:23
Speaker 2: and the likelihood that I will be getting divorced. Is
33:26
Speaker 2: there anything I can do now to protect those assets
33:29
Speaker 2: if my mother's trust leaves the assets outright to me,
33:33
Speaker 2: So mom's.
33:33
Speaker 3: Already passed Yeah, So in this case, mom's passed away.
33:38
Speaker 3: So have they read the trust yet?
33:42
Speaker 2: It says it sounds like they're not sure.
33:45
Speaker 3: So if the trust. First of all, the first thing
33:47
Speaker 3: you need to do when someone passes is, you know,
33:49
Speaker 3: call the lawyer and get in front of them and
33:52
Speaker 3: him or her and learn what the trust says. So
33:54
Speaker 3: obviously that's what you need to do first. But yeah,
33:57
Speaker 3: I mean, this is this could be a problem. So
34:00
Speaker 3: if she's saying she doesn't know if she's getting divorced, but.
34:04
Speaker 2: She said it's likely she's going to be getting divorced,
34:07
Speaker 2: sounds like maybe he's been waiting around for that.
34:10
Speaker 3: Oh kick, So yeah, you really hate to see that. Yeah,
34:14
Speaker 3: you can't prove it, but it smells bad.
34:17
Speaker 2: Yeah, it's out there for sure.
34:19
Speaker 3: And so here's the problem. If mom has already died,
34:23
Speaker 3: you're really going to have to read the trust. It'll
34:25
Speaker 3: say and let's say you're right. It says that divide
34:29
Speaker 3: everything you know equally and pay it out. If that's
34:33
Speaker 3: the case, it's your asset. In fact, it's your asset
34:37
Speaker 3: generally right away. Now, if you read the trust, there
34:44
Speaker 3: might be language like we have in our documents. We
34:47
Speaker 3: have something called bad behavior clause.
34:50
Speaker 2: Yeah.
34:50
Speaker 3: Yeah, and so there's this paragraph that sort of gives
34:55
Speaker 3: the trustee discretion. It says if the trust the fields
35:01
Speaker 3: it's not in the best interest of the beneficiary to
35:06
Speaker 3: receive the asset, then they can hold it back, notwithstanding
35:11
Speaker 3: the language in the document. So so this would not
35:17
Speaker 3: necessarily bad behavior on her part, but there is bad
35:20
Speaker 3: behavior going on and it's not in the best interest
35:24
Speaker 3: of the beneficiary to get the asset.
35:25
Speaker 1: Now.
35:26
Speaker 3: It might not be because of a divorce. It could
35:28
Speaker 3: be that it turns out that this child is a
35:31
Speaker 3: drug addict now, or or a dependency of something, or
35:35
Speaker 3: or you've just noticed over time that they're horrible with
35:38
Speaker 3: money with money, you know, or manipulated easily, or you know.
35:43
Speaker 3: There can be other reasons that you can you can
35:46
Speaker 3: maybe do this hold back, but you're really going to
35:49
Speaker 3: need to see the trust to see if that's in there.
35:53
Speaker 2: But if it's, if it's not hold it in trust,
35:56
Speaker 2: then does that mean that that whole inheritance is going
36:01
Speaker 2: to be subject to that divorce? They can't like drag
36:04
Speaker 2: their feet and wait for a distribution.
36:07
Speaker 3: Probably not okay, because you know obviously it's there, right
36:12
Speaker 3: and say the fact that you didn't take it and
36:15
Speaker 3: put it in your bank yet doesn't matter because it's
36:19
Speaker 3: really yours anyway, whether it's over here in this bank
36:22
Speaker 3: and the trust or over here in your bank, over
36:25
Speaker 3: here still really has your name all over it. Yeah,
36:28
Speaker 3: and so, and that's important because, like I say, folks,
36:31
Speaker 3: I deal with this all the time. And so when
36:35
Speaker 3: somebody gets divorced, never let's let's say Mom was alive here.
36:39
Speaker 3: If Mom was alive here, they would still be looking
36:44
Speaker 3: at this trust even if Mom was alive to say,
36:47
Speaker 3: is this an inheritance that's going to be subject to
36:49
Speaker 3: the divorce.
36:49
Speaker 2: But she could try and divorce proof last minut.
36:51
Speaker 3: Yes, So, folks, there's I'm dealing with this right now
36:54
Speaker 3: with a divorce proof language, and I've sent it over
36:56
Speaker 3: to the other lawyer and I'm waiting for the response.
36:58
Speaker 3: So it's it's really good to know that that could work.
37:02
Speaker 3: But folks, for all of you faced with nursing home care,
37:05
Speaker 3: last minute, don't just write the check, get the guide
37:07
Speaker 3: eight six six eight four eight five six nine to nine.
37:12
Speaker 2: If you have a question you would like to ask Todd,
37:14
Speaker 2: visit his website Legal Exchangshow dot com and click on
37:17
Speaker 2: the ask Tod tab. Maybe I'll be able to read
37:20
Speaker 2: your question on the air and Hopefully his answer will
37:23
Speaker 2: stop you from becoming one of his next real life stories.
37:26
Speaker 2: You've been listening to Todd Lutsky, a partner with the
37:29
Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
37:33
Speaker 2: financial advisor with the Armstrong Advisory Group. We'll be back
37:36
Speaker 2: with more after this quick break on the legal exchange
37:39
Speaker 2: with Todd Lutsky.
37:41
Speaker 1: Changes to Medicaid occur almost every year, and if you're
37:44
Speaker 1: not informed, your assets could be at risk, especially if
37:47
Speaker 1: you or your spouse need nursing home care. Cushing and
37:49
Speaker 1: Dolan are expert in elder lam and their new guide
37:52
Speaker 1: is called Last Minute Medicaid Eligibility. It'll help you understand
37:55
Speaker 1: the Medicaid process, which is critically important if you're retired
37:58
Speaker 1: or getting close to retiring. The guide has important information
38:01
Speaker 1: regarding numerous strategies that can protect your assets from the
38:04
Speaker 1: nursing home. It could be your primary home, a vacation home,
38:07
Speaker 1: or any rental property you may own. You've worked hard
38:10
Speaker 1: to achieve wealth, so don't take chances when it comes
38:12
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38:15
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38:18
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38:21
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38:24
Speaker 1: Or you can request it online by visiting Legal exchange
38:27
Speaker 1: show dot com. That's legal exchange show dot com. The
38:31
Speaker 1: proceeding was paid for in The views expressed are solely
38:33
Speaker 1: those of Cushing and Dolan. Cushing and Dolan and or
38:35
Speaker 1: Armstrong Advisory may contact you offering legal or investment services.
38:37
Speaker 1: Cushing and Dolan and Armstrong Advisory do not endorse each
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39:02
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39:05
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39:09
Speaker 1: no currency to exchange, just warm weather, clear blue water,
39:13
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39:41
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40:26
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
40:28
Speaker 1: registered investment advisor. Nothing in the ad or in any
40:31
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
40:34
Speaker 1: your own financial, tax, and estate planning advisors before making
40:37
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
40:40
Speaker 1: advisory services. Your tune to the Legal Exchange with Todd Lutsky.
40:45
Speaker 1: If you are a loved one needs a nursing homestay,
40:47
Speaker 1: call Todd right now at eight sixty six eight four
40:50
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40:52
Speaker 1: your assets are protected. That's eight six six eight four
40:55
Speaker 1: eight five six nine nine, or visit him online at
40:58
Speaker 1: Legal 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 the Armstrong Advisory Group, and
41:08
Speaker 2: I'm joined, of course by Todd Lutsky, a partner with
41:11
Speaker 2: the law firm of Cushing and Dolan with a master's
41:14
Speaker 2: in taxation. So, Todd, we're talking about that last minute
41:18
Speaker 2: medicaid eligibility. We've covered the house for married people, single
41:22
Speaker 2: people quite a bit. I want to talk about rental property. Oh,
41:27
Speaker 2: is it possible to protect rental properties from the nursing home?
41:31
Speaker 2: Last minute?
41:34
Speaker 3: Protect? Yes? Really? Delay is a better word.
41:41
Speaker 2: So let me explain this.
41:43
Speaker 3: Explain. So, a rental property is a countable asset. And
41:48
Speaker 3: remember in the guide folks, it's all about countable assets
41:51
Speaker 3: versus non countable assets. I've said it many times. This
41:55
Speaker 3: is an example of what we would consider a non
41:59
Speaker 3: countable asset, at least at the time of application.
42:04
Speaker 2: So it wouldn't stop you for you becoming qualified from
42:08
Speaker 2: any case.
42:08
Speaker 3: Right, So if you have a million dollar rental property,
42:12
Speaker 3: this would be okay, that's not going towards my one
42:16
Speaker 3: hundred and fifty thousand dollars. You know, if I'm like
42:19
Speaker 3: a community spouse, let's say that I can keep or
42:21
Speaker 3: my two thousand dollars limits if I'm single, that's just
42:25
Speaker 3: not going to be looked at. Yeah. Why because it's
42:29
Speaker 3: generating income essential to self support. That's what the statute says. Okay,
42:35
Speaker 3: So because of that, this will be noncountable but leanable.
42:41
Speaker 2: But leanable Okay.
42:42
Speaker 3: So there's the delay.
42:43
Speaker 2: Okay, So you have rental income coming in. That's income
42:49
Speaker 2: that I would think that would the nursing home probably
42:52
Speaker 2: wants to grab onto. But at the same time, you
42:56
Speaker 2: still have to pay the taxes, pay the snow removal
42:59
Speaker 2: all of the things, the expenses of that property. So
43:04
Speaker 2: how do you do that if you have to send
43:05
Speaker 2: the income to the nursing home.
43:07
Speaker 3: Yeah, great question. So in the beauty of this idea
43:12
Speaker 3: that it's non countable and they're going to let you
43:15
Speaker 3: keep it because they also say, well, we understand if
43:19
Speaker 3: you're going to keep it, you have to maintain it.
43:22
Speaker 3: So they're only going to demand that you give the
43:25
Speaker 3: nursing home the net rent, Okay, which is great.
43:28
Speaker 1: Right.
43:29
Speaker 3: So if I need to pay the real estate tax, yeah,
43:32
Speaker 3: I need to pay a utility bill or something. Yeah,
43:35
Speaker 3: and you kind of know what your monthly expenses are,
43:38
Speaker 3: and you kind of come up with that and you say, okay,
43:41
Speaker 3: you know I'm earning three thousand a month in rent,
43:45
Speaker 3: but my expenses are one thousand a month. I will
43:47
Speaker 3: give the nursing home two thousand a month, okay, and
43:50
Speaker 3: you got to keep the building home run. Yes, we're
43:54
Speaker 3: at a lower rate.
43:55
Speaker 2: Okay. So that would be if you're talking about a
43:57
Speaker 2: single individual. What happens if you own that with your spouse.
44:00
Speaker 2: Do they get to keep half and then the nursing
44:01
Speaker 2: home gets half?
44:03
Speaker 3: Yeah? I think I think it depends on how it's owned.
44:06
Speaker 3: But but yeah, I would say that the at home
44:10
Speaker 3: spouse is allowed is it really allowed an unlimited amount
44:13
Speaker 3: of income? Right? It doesn't matter how much the at
44:16
Speaker 3: home spouse makes. But if the property was owned jointly,
44:19
Speaker 3: then you maintain the property and then split the net
44:23
Speaker 3: rent yep right and allow the healthy spouse to keep half.
44:28
Speaker 3: You could allocate more if they are not meeting their
44:31
Speaker 3: minimum monthly maintenance needs allowance that a community spouse is
44:35
Speaker 3: entitled to. So, folks, these are just some of the
44:40
Speaker 3: ideas some of the topics that are in this guide. Right,
44:44
Speaker 3: this was a great example so far of a noncountable asset.
44:48
Speaker 3: You wouldn't think it, right, a big rental property non countable.
44:52
Speaker 3: Same thing like with a house. What about a vacation home?
44:56
Speaker 3: What about life insurance? Right? What about having an IR
45:00
Speaker 3: or a four to oh one K? And folks, they're
45:03
Speaker 3: different for married couples versus single people. And don't forget
45:07
Speaker 3: there could be some last minute things you can do
45:09
Speaker 3: to transfer assets, believe it or not, and not have
45:13
Speaker 3: a five year waiting period. You got to get the
45:15
Speaker 3: guide to learn how this works. So if you're faced
45:18
Speaker 3: with nursing home care don't just write the check, get
45:21
Speaker 3: the guide, learn what your options are, then go to
45:25
Speaker 3: the lawyer and see if you can figure out what
45:27
Speaker 3: to do eight six six eight four eight five six
45:31
Speaker 3: nine nine or Legal Exchange show dot com. It's packed
45:35
Speaker 3: with ideas and information on medicaid eligibility eight six six
45:41
Speaker 3: eight four eight five six nine nine or Legal Exchange
45:46
Speaker 3: Show dot com.
45:47
Speaker 2: So, Todd, you just mentioned vacation homes. If you have
45:52
Speaker 2: a vacation home that you have not previously rented out,
45:56
Speaker 2: do you have to have rented it for a certain
45:59
Speaker 2: amount of time? Time in order to do the same
46:02
Speaker 2: thing that you we just talked about saving a rental
46:04
Speaker 2: property last minute? Is there like a look back on that?
46:06
Speaker 2: Or how does that? Hey? How is that treated?
46:09
Speaker 6: Yeah?
46:10
Speaker 3: I think what's what Susan's asking is, first and foremost,
46:14
Speaker 3: how is a vacation home treated? First? Countable? You're right, Susan,
46:19
Speaker 3: one hundred percent countable. You're gonna need to deal with this.
46:22
Speaker 2: Not your primary, not your primary, it's.
46:24
Speaker 3: Not your rental. It's a countable asset. It's going to
46:27
Speaker 3: prevent you from becoming eligible for medicaid unless and that's
46:31
Speaker 3: what you were leading into, Susan unless you do something
46:34
Speaker 3: with it to transform it into a non countable asset
46:40
Speaker 3: like what rented rental. You absolutely could. Does it have
46:44
Speaker 3: to be rented in the past, No, there is no
46:48
Speaker 3: look back period. You just have to say that I
46:51
Speaker 3: am now going to rent it right, okay, But you
46:54
Speaker 3: need to hurry up and actually rented, get it rented.
46:57
Speaker 3: You can't just delay that, say you're doing it. You're
47:01
Speaker 3: going to have to do it right, okay. And so
47:04
Speaker 3: the answer is you can do it, and I would
47:06
Speaker 3: look into that as a great way of saving the assets.
47:09
Speaker 2: Okay. So all right, so we go down the path.
47:11
Speaker 2: They become eligible for medicaid and then ultimately they'll pass
47:16
Speaker 2: away in the nursing home. What happens then to these
47:19
Speaker 2: rental properties you mentioned there's a lean put on.
47:22
Speaker 3: Yeah, so let's talk about the lean, right, the lean
47:26
Speaker 3: is really really your friend.
47:29
Speaker 2: He doesn't sound friendly, I know, I.
47:31
Speaker 3: Know, but let's explain why it is your friend. So
47:34
Speaker 3: we'll go back to the you know, the single person
47:38
Speaker 3: with the rental and they've got maybe two thousand dollars
47:43
Speaker 3: a month coming in and social Security yep, and the
47:48
Speaker 3: rent is three thousand a month and they have net
47:54
Speaker 3: rent of two, so four. So they got four thousand
47:58
Speaker 3: in income and they can only keep two thousand dollars
48:04
Speaker 3: in the bank. So they we've gotten to that point,
48:08
Speaker 3: and they have this rental property that's a million dollars.
48:12
Speaker 3: But we've just learned that that's non countable. So it
48:15
Speaker 3: doesn't go against the two thousand that I just said
48:18
Speaker 3: they're only allowed to have in the bank. It's just
48:21
Speaker 3: not countable. Wow, but leanable so great. They look at
48:26
Speaker 3: all these assets, they say, that's non countable. You got
48:29
Speaker 3: two thousand in the bank. You're eligible for medicaid. Assuming
48:32
Speaker 3: you don't have a house, you're eligible for medicaid. Why
48:36
Speaker 3: does that matter? Well, because if I didn't get on Medicaid,
48:40
Speaker 3: I would be spending about fifteen grand a month on
48:44
Speaker 3: the nursing home. If I get on Medicaid, I'm going
48:47
Speaker 3: to be spending about sixty five hundred dollars a month
48:50
Speaker 3: on Medicaid. Wow, that's a big difference. So not only
48:55
Speaker 3: am I now paying the full pay for the nursing
48:59
Speaker 3: home will be considered sixty five hundred, but I have
49:02
Speaker 3: four thousand. Remember the rent is helpful here. I've got
49:07
Speaker 3: four thousand a month coming in to give to the
49:11
Speaker 3: nursing home.
49:12
Speaker 2: So that's part of the sixty five hundred, not on
49:14
Speaker 2: top of the sixty five hundred, So that takes away
49:17
Speaker 2: great point.
49:18
Speaker 3: So you go sixty five hundred minus four, leaving me
49:24
Speaker 3: twenty five hundred a month of what we call a lean.
49:29
Speaker 3: So there's your lean question. See why it's your friend?
49:32
Speaker 3: So now I can live there? What if I stay
49:35
Speaker 3: in the nursing home for two years? Right? Was there
49:38
Speaker 3: a little over twenty four thousand a year? Sixty sixty grand?
49:43
Speaker 3: Say we got sixty grand after two years of a
49:46
Speaker 3: lean on a million dollar property? Are you kidding me?
49:50
Speaker 3: Any day of the week? Right, happy to have it.
49:53
Speaker 3: Now the kids get to keep the property. They got
49:57
Speaker 3: to step up in basis, so if they want to
49:59
Speaker 3: sell it, no capital gains tax to be paid by them,
50:03
Speaker 3: and if not, it's a full step up in basis.
50:05
Speaker 3: They can keep the property, mortgage it, pay off the
50:10
Speaker 3: sixty to the state States made whole, and they now
50:15
Speaker 3: have a house that they can rent and depreciate against
50:18
Speaker 3: the high basis. Folks really need to get some guidance
50:22
Speaker 3: before you go into a nursing home. The guide might
50:25
Speaker 3: be at least a step in that direction, and of
50:28
Speaker 3: course call your elder law attorney, but don't just write
50:31
Speaker 3: the check to the nursing home. Learn what you can do.
50:33
Speaker 3: Get this guide eight six' six eight four eight five
50:38
Speaker 3: six nine nine Or Legal exchange show dot com and
50:41
Speaker 3: you can download it right there for.
50:43
Speaker 2: Free Todd lutsky from the law firm Of cushing And,
50:46
Speaker 2: dolan thank you so.
50:47
Speaker 3: Much thank, You, susan always a.
50:49
Speaker 2: Pleasure I'm Susan power as a financial advisor with The
50:52
Speaker 2: Armstrong Advisory. Group we thank you for joining us today
50:55
Speaker 2: and we'll be back again next week on The Legal
50:57
Speaker 2: exchange With Todd.
50:58
Speaker 1: Lutsky changes To medicaid occur almost every, year and if
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Speaker 1: proceeding was paid for In the views expressed are solely
51:52
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Speaker 1: Armstrong advisory may contact you offering legal or investment. Services
51:56
Speaker 1: cushing And dolan And Armstrong advisory do not endorse each
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