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Ask Todd: Long term planning for procrastinators · The Financial Exchange Show

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  Speaker 1: This is Ask Todd on the Financial Exchange Radio Network.
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  Speaker 1: If you have an existing estate plan or in the
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  Speaker 1: market for one, Todd Letsky is here to answer your
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  Speaker 1: questions and help you plan for later life. Ask Todd
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  Speaker 1: is presented by Cushing and Dolan, serving Massachusetts and New
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  Speaker 1: England for more than thirty five years, helping families with
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  Speaker 1: a state and tax planning, medicaid planning, and probate law.
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  Speaker 1: Visit Cushingdolan dot com. Now here's Todd Lutsky.
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  Speaker 2: Todd Lotsky from the law firm of Kushigan Dolan joins
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  Speaker 2: us now on the show for Ask Todd. This is
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  Speaker 2: your chance to ask Todd your estate planning questions. First,
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  Speaker 2: one of these that we've done in twenty twenty five.
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  Speaker 2: So we got the phone line open for you eight
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  Speaker 2: eight eight to zero five two two sixty three. Get
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  Speaker 2: calin if you've gotten a state planning question for Todd. Again,
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  Speaker 2: we've got limited time to be able to actually take
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  Speaker 2: those calls, so make sure you get in line early
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  Speaker 2: at eight eight eight to zero five two two six three.
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  Speaker 2: That number again is eight eight eight eight two zero
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  Speaker 2: five two two six three. Mister Lutsky, how are you
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  Speaker 2: doing today, I.
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  Speaker 3: Am doing great. Hope you're enjoying the new year.
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  Speaker 2: How are you doing fantastic as well? I saw someone
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  Speaker 2: Did you see the story about the guy who got
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  Speaker 2: arrested for stealing the balloons?
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  Speaker 3: Arrested for stealing balloons? No, what happened to.
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  Speaker 2: Well, police held him for a while and then let
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  Speaker 2: him go. So what are you gonna do? But in
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  Speaker 2: any case, Todd, let's talk a little bit about planning
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  Speaker 2: as it relates to long term care costs. Specifically, I
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  Speaker 2: want to talk about the five year lookback period. When
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  Speaker 2: did that five year lookback period for Medicaid planning go
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  Speaker 2: into effect?
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  Speaker 3: Originally? Oh, it's just this really takes us back a while.
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  Speaker 3: It initially was three years, and many people remember it
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  Speaker 3: as three years, but there was always some confusion with dad.
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  Speaker 3: Even back in two thousand and six, I believe the
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  Speaker 3: Deficit Reduction Act came out and made every transfer five years. Now.
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  Speaker 3: Remember what people didn't realize was before two thousand and six,
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  Speaker 3: the look back period for transferring assets directly to family
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  Speaker 3: members individuals was three years, but it was always five
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  Speaker 3: years transferring assets to a trust. Now, since two thousand
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  Speaker 3: and six, it's five years. Whether you transfer the asset
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  Speaker 3: directly to an individual or to a trust. That was
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  Speaker 3: really the big change. But you know, we always got
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  Speaker 3: to keep in mind that five years is five years.
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  Speaker 3: And now again, I never thought it was a great
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  Speaker 3: idea to just give things to a child anyway. So
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  Speaker 3: I would never have done it to avoid the five
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  Speaker 3: year waiting period, even when you could and it was
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  Speaker 3: three years, just because there's so many negatives from taxes
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  Speaker 3: to control to you know, just overall obeyed issues, nursing homes,
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  Speaker 3: I wouldn't do it. Then I would use a trust.
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  Speaker 3: So I would have used a trust all the time.
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  Speaker 3: So there's the difference between the five and the three
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  Speaker 3: and what has changed over time.
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  Speaker 2: Doud In talking about that and how it's evolved over time,
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  Speaker 2: is there any sense that that look back period may
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  Speaker 2: evolve further to you know, will it get shorter or longer?
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  Speaker 2: Is that not really something that is being discussed as
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  Speaker 2: any kind of legislation at this point.
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  Speaker 3: So the good news is that I haven't seen really
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  Speaker 3: any new legislation, even you know, committees discussing the change,
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  Speaker 3: So so that that is a positive. I think I
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  Speaker 3: did see a while back where they were thinking about
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  Speaker 3: making it seven years, although it hasn't really gone anywhere.
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  Speaker 3: But that said, I want people to understand, you know,
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  Speaker 3: sort of how it works too, because many people will say, well,
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  Speaker 3: what if I do it now and then they change
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  Speaker 3: it later? Am I grandfathered in? That's sort of a
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  Speaker 3: follow up question. You get all the time right and
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  Speaker 3: the good news and history as our guide. Of course,
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  Speaker 3: you never really know what the government will do or
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  Speaker 3: can do, but history as our guide. Anyway, No, get
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  Speaker 3: your clock running now, lock in your five year waiting period,
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  Speaker 3: and not worry about the change, because the change that
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  Speaker 3: has occurred has always been proactive, not retroactive. And I
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  Speaker 3: can go back to the twenty sixteen, twenty I'm sorry,
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  Speaker 3: twenty twenty six, twenty I'm sorry, two thousand and six
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  Speaker 3: law change. When the Deficit Reduction Act did change from
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  Speaker 3: three years to five years, I can tell you how
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  Speaker 3: busy we were, you know, getting things done before the
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  Speaker 3: lawn chains. Why because the people who did it were
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  Speaker 3: grandfathered in with the three when it went to five.
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  Speaker 3: So if you do your five now and lock it
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  Speaker 3: in and they change it to seven or ten down
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  Speaker 3: the road, you will have grandfathered yourself in or likely
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  Speaker 3: will have. So that's a little history and points on
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  Speaker 3: the five year look back.
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  Speaker 2: To take a quick break here when we come back
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  Speaker 2: right to your questions with Todd Lutsky. That phone number
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  Speaker 2: again to call into the show and ask Todd your
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  Speaker 2: questions is eight eight eight to zero five two two
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  Speaker 2: six three. One more time. That's eight eight eight two
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  Speaker 2: zero five two two six three. Your questions with Todd
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  Speaker 2: are next.
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  Speaker 1: Ask Todd with Todd Lutsky every Wednesday at ten thirty
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  Speaker 1: only here on the Financial Exchange Radio Network. Todd Letsky
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  Speaker 1: answers your questions about a state and elder life planning
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  Speaker 1: every Wednesday at ten thirty right here on the Financial
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  Speaker 1: Exchange Radio Network.
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  Speaker 2: All right, time for your questions with Todd. We still
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  Speaker 2: do have a little bit more room on the phone line,
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  Speaker 2: so give us call it eight eight eight to zero
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  Speaker 2: five two two six three if you've got a question
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  Speaker 2: for Todd again. That is eight eight eight to zero
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  Speaker 2: five two two sixty three. Let's go to Mary in Salem. Mary,
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  Speaker 2: you are on with Todd Lutsky.
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  Speaker 4: Good morning, Trod. I'm kind of in a pickle. My
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  Speaker 4: husband has dementia. He currently is in the hospital and
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  Speaker 4: he's rapidly declined within the last three months or so.
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  Speaker 4: He's always been manageable. I don't have an estate I
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  Speaker 4: don't have an estate plan. Is there anything that I
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  Speaker 4: can do at this point to protect my house? We
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  Speaker 4: have a two family with a mortgage, and I just
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  Speaker 4: don't know where to turn.
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  Speaker 3: Let me ask you a couple of follow up questions.
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  Speaker 3: So one, you've got the two family, and is there
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  Speaker 3: other like a lot of like IRA money or investment
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  Speaker 3: money or bank money kicking.
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  Speaker 4: Around about one hundred and twenty thousand.
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  Speaker 3: In total dollars?
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  Speaker 4: Correct?
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  Speaker 3: Okay, So the two assets are one hundred and twenty
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  Speaker 3: and the two family, and again no advanced planning was done.
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  Speaker 3: My final question is, and again it sounds like he
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  Speaker 3: is perhaps declining rapidly and maybe you're not able to
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  Speaker 3: handle him anymore. When you made the comment not able
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  Speaker 3: to handle him anymore, do you mean that when he
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  Speaker 3: gets discharged from the hospital, do you think he's coming
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  Speaker 3: home or do you think he's going to end up
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  Speaker 3: in a long term care facility.
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  Speaker 4: Well, I don't have the funds for a long term
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  Speaker 4: cam facility, is what I.
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  Speaker 3: Asked, though.
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  Speaker 4: Do you think home?
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  Speaker 3: But but if and so, the way I'm sort of
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  Speaker 3: asking this is, is if it's not safe for him to
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  Speaker 3: come home and not easy for you to deal with him,
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  Speaker 3: because again, they could get violent, they could I understand
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  Speaker 3: the different things that happen when they get the dementia.
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  Speaker 3: You know, if it's technically not safe for him to
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  Speaker 3: come home and he had to go to a nursing home,
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  Speaker 3: if he's qualified for a nursing home now meaning he's
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  Speaker 3: old enough, I mean, he's sick enough to go to
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  Speaker 3: a nursing home. You don't have to worry about pain.
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  Speaker 3: That's why you're calling, right, So don't worry about the
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  Speaker 3: cost because looking at the assets you have, he would
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  Speaker 3: be eligible for Medicaid right away and you wouldn't have
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  Speaker 3: to pay. So that said, do you think the nursing
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  Speaker 3: home is the family decision the right thing for him?
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  Speaker 3: Or is he still coming home?
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  Speaker 4: Well, that's still to be determined by the doctors. I
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  Speaker 4: guess at this point.
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  Speaker 3: They are good.
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  Speaker 4: I thought of long term care, and I hadn't because
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  Speaker 4: I didn't think that he would do well.
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  Speaker 3: So okay, so once you decide the family, the doctors,
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  Speaker 3: your health decisions are are played out, and if it
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  Speaker 3: becomes the best interest for him is a nursing home
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  Speaker 3: for him, the family, for everybody, and that's the recommendation,
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  Speaker 3: then yes, we can do last minute planning, which is
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  Speaker 3: really what this guide is all about, right, It's all
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  Speaker 3: about people like yourself that end up facing a nursing
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  Speaker 3: home admission and really haven't done much planning. And so
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  Speaker 3: in your case, you have a primary residence that you
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  Speaker 3: live in, correct, Is that correct?
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  Speaker 4: With the that's correct.
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  Speaker 3: With the mortgage, that's fine, no problem. You are allowed
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  Speaker 3: to keep your primary residence as long as you live there.
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  Speaker 3: There's no value limitation and there's no lean that will
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  Speaker 3: be attached to it, and you can continue to pay
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  Speaker 3: all your bills. That leaves us one hundred and twenty
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  Speaker 3: thousand dollars. In order to become eligible for medicaid, you
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  Speaker 3: are not allowed to have more than approximately one hundred
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  Speaker 3: and fifty thousand dollars, and he's not allowed to have
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  Speaker 3: more than two Wow. Home run you only have one
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  Speaker 3: hundred and twenty. So you are now financially and if
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  Speaker 3: he's medically eligible for medicaid right away naturally just because
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  Speaker 3: of the type of assets that you happen to have. Now,
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  Speaker 3: this doesn't obviously doesn't work for everybody, but it works
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  Speaker 3: for you. So you still need to go through the
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  Speaker 3: Medicaid application process. You still need to figure out, you know,
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  Speaker 3: go through that whole process, which I would not do alone.
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  Speaker 3: I would hire a lawyer to do that. But at
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  Speaker 3: least if you have the lawyer, you now know the
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  Speaker 3: knowledge that that you're that he's immediately eligible for Medicaid
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  Speaker 3: even though no advanced planning was done, So that at
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  Speaker 3: least hopefully helps you understand that. You know, if the
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  Speaker 3: doctors come back and tell you, yeah, you know, we
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  Speaker 3: just don't think it's safe to return him home. You
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  Speaker 3: can obviously take him home against medical advice. You're allowed
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  Speaker 3: to do that. But if they come back and tell
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  Speaker 3: you that and they feel like and you agree that
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  Speaker 3: the best place for him is a long term care facility,
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  Speaker 3: please know you can do it and you can afford
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  Speaker 3: it because you're not going to pay. So hopefully that
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  Speaker 3: helps a little. And if you if you need help,
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  Speaker 3: please don't go alone when you're applying for Medicaid. And folks,
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  Speaker 3: quite frankly, that's a lot, that's that's a call. That
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  Speaker 3: is exactly what this guide this month brand new guide
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  Speaker 3: for the month that we're giving away is long term
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  Speaker 3: care Planning for the procrastinator. And I say that, but
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  Speaker 3: you know what, it's also about people who have done
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  Speaker 3: planning but inevitably still have assets outside the trust, like
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  Speaker 3: large iras or money they left outside the trust or whatnot.
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  Speaker 3: So we can do things last minute for someone who's
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  Speaker 3: done no planning, or someone who's done planning but still
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  Speaker 3: has assets they need to protect when they're faced with
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  Speaker 3: going in a nursing home. So this guide really is
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  Speaker 3: for everyone in those situations. It helps you understand how
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  Speaker 3: to protect real estate, vacation homes, rental properties, you know,
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  Speaker 3: excess dollars. There's different rules for these different kinds of assets.
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  Speaker 3: So call and get the guide. Long Term Care Planning
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  Speaker 3: for Procrastinators eight six y six eight four eight five
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  Speaker 3: six nine to nine or Legal Exchange Show dot com.
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  Speaker 3: Don't apply for medicaid on your own. It generally results
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  Speaker 3: in a loss of assets eight six six eight four
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  Speaker 3: eight five six nine nine or Legal Exchange Show dot com. Todd,
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  Speaker 3: I've got another one for you here.
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  Speaker 2: We got to be quick just because we're getting close
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  Speaker 2: to wrapping up, but we got Dan and Florida on
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  Speaker 2: the line, Dan, what's your question for Todd?
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  Speaker 5: Hey, yeah, I have a revocable trust in my wife
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  Speaker 5: passed away. Should I get an a revocable trust or
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  Speaker 5: should I get an LLC? And I'm seventy four?
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  Speaker 3: So LLCs are really for rental properties. And how much
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  Speaker 3: is how much are you worth in the trust and
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  Speaker 3: out of the trust?
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  Speaker 5: I don't know, probably three million. I own two other
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  Speaker 5: piece three other pieces of property other than.
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  Speaker 3: My own, Okay, so let's say three million in total, right, yep.
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  Speaker 3: So if that's the case, you know, you do want
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  Speaker 3: to take a look at the trust that you had,
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  Speaker 3: that your wife had, and technically some of those assets
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  Speaker 3: that are in there are probably protected from future estate taxes,
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  Speaker 3: so we don't want to disturb that, right, I would
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  Speaker 3: need to read the trust you going forward? You I
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  Speaker 3: assume you have your own revocable trust. Yes, yeah, yeah, yes,
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  Speaker 3: So LLCs are great for rental properties. So yes, I'd
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  Speaker 3: want to explore rental property protection for you with an LLC.
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  Speaker 3: But then at the same time, we would want to
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  Speaker 3: think about protecting assets from the nursing home. So if
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  Speaker 3: that's a concern for you at this point in seventy four,
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  Speaker 3: is a great age. You might want to, you know,
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  Speaker 3: change your trust the assets that you have and put
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  Speaker 3: them in an irrevocable medicaid trust and get it protected
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  Speaker 3: and potentially change the make a change to your wife's
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  Speaker 3: trust to protect those assets without involving screwing up the nursing.
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  Speaker 3: The state, tax planning lots to think about for you.
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  Speaker 3: I think you ought to reach out to an attorney
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  Speaker 3: and get some guidance because I think, yes, some planning
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  Speaker 3: is in order for you going forward.
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  Speaker 2: Mister Lutsky, thank you so much for joining us today.
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  Speaker 3: Thank you, folks, always a pleasure.
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  Speaker 1: This has been Asked Odd on the Financial Exchange Radio network.
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  Speaker 1: Ask Todd with Todd. Lutsky has been presented by Cushing
• 15:27
  Speaker 1: and Dolan, serving Massachusetts and New England for more than
• 15:30
  Speaker 1: thirty years, helping families with the state and tax planning,
• 15:33
  Speaker 1: Medicaid planning and probate law. Call eight hundred three nine
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  Speaker 1: three four thousand and one or visit Cushingdolan dot com.
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  Speaker 1: The views expressed in this segment are solely those of
• 15:42
  Speaker 1: Cushing and Dolan Armstrong Advisor. He does not provide any
• 15:44
  Speaker 1: legal or tax advice. Please consult with your legal or
• 15:46
  Speaker 1: tax advisor on such matters. Cushing and Armstrong do not
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  Speaker 1: endorse each other and are not affiliated