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Estate planning for a dysfunctional family dynamic · The Legal Exchange

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Speaker 1: This is the Legal Exchange with Todd Lutsky from the
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Speaker 1: law firm of Cushing and Dolan and Susan Powers of
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Speaker 1: the Armstrong Advisory Group. Each week, Todd and Susan will
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Speaker 1: discuss many topics, including estate planning, how to avoid probate,
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Speaker 1: Here are your hosts, Todd Lutsky and Susan Powers.
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Speaker 2: Welcome into legal Exchange with Todd Lutsky. I'm Susan Powers,
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Speaker 2: a financial advisor with the Armstrong Advisory Group, and I'm
0:44
Speaker 2: joined by Todd Lutsky, a partner with the law firm
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Speaker 2: of Cushing and Dolan with a master's in taxation. Welcome Todd,
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'm great. Thank you what you have for us this week?
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Speaker 3: Couple of good cases, actually a Supreme Court case out
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Speaker 3: of Vermont dealing with basically something you don't think about
1:04
Speaker 3: a lot. How about we don't make allegations against folks
1:08
Speaker 3: while they're still living that could impact your inheritance with
1:12
Speaker 3: you're a beneficiary, sure you think, so we'll talk a
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Speaker 3: little bit about that and how this whole arrangement went,
1:21
Speaker 3: and then we'll head over to Ohio where, again my
1:24
Speaker 3: home state. We'll have an appellate court case there where
1:28
Speaker 3: you know, if you are going to make a complaint
1:33
Speaker 3: or if someone else is going to file a complaint
1:36
Speaker 3: and you feel you're in the right, you might want
1:39
Speaker 3: to actively defend your claim otherwise you aren't going to win.
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Speaker 3: So it seems kind of interesting there as well. But
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Speaker 3: I think this is more than just the fighting. This
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Speaker 3: is more about the relationship that existed between two people
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Speaker 3: and how how you know the trust actually does work
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Speaker 3: to accomplish your wish. In fact, in both of these cases,
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Speaker 3: you'll see how the trust can and does do what
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Speaker 3: it's supposed to do. But you know, planning is really
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Speaker 3: the important aspect of it. So and it actually helped
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Speaker 3: to prevent some of the fighting, but nevertheless it still
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Speaker 3: did happen. Folks, Planning is really the most important part.
2:21
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2:24
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Speaker 3: confirm that they are or tell you that they're not.
3:02
Speaker 3: So it should really give you the information you need
3:06
Speaker 3: to begin your estate planning process using or not using
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Speaker 3: an irrevocable trust eight six six eight four eight five
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Speaker 3: six nine nine or Legal Exchange show dot com again
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Speaker 3: eight six six eight four eight five six ninety nine
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Speaker 3: or Legal Exchange Show dot Com. Let's head over to Vermont.
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Speaker 3: So what happened here? So there was an author and
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Speaker 3: an illustrator named Anna in a relationship with Ralph from
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Speaker 3: nineteen sixty to twenty nineteen ninety to twenty sixteen now.
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Speaker 3: Ralph also became her primary caregiver following her geo blastoma
3:47
Speaker 3: I think diagnosis, yeah, glioblastoma diagnosis, and was her primary
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Speaker 3: caregiver until her death in twenty sixteen. Well, in twenty eleven,
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Speaker 3: Anna created a revocable trust kudosta her to do what
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Speaker 3: to collect the royalty income from her books and her illustrations,
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Speaker 3: and she was going to allocate forty percent to her
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Speaker 3: two daughters, so forty and forty for I think it's
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Speaker 3: Cordelia and Beryl, and then twenty percent to Ralph. Ralph
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Speaker 3: around the same time, created a will naming Anna's daughters
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Speaker 3: as the heirs to his estate. Okay, Well, between twenty
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Speaker 3: fifteen and twenty sixteen, which is when she died, Anna
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Speaker 3: made some amendments to her trust, basically increasing Ralph's income
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Speaker 3: from twenty five percent to fifty percent and reducing the
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Speaker 3: girl's income to twenty five percent each. Well, the girls
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Speaker 3: filed a claim alleging that Ralph persuaded Anna to reduce
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Speaker 3: or change the trust the way they did in exchange
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Speaker 3: for Ralph or agreeing to make the girls beneficiaries under
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Speaker 3: his will, and when they tried to confirm that agreement.
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Speaker 3: Ralph's attorney said, Ralph is under no obligation to leave
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Speaker 3: anything to you girls, which he's not right, And we
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Speaker 3: don't know if there was a contract or not at
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Speaker 3: this point. But nevertheless, in February of twenty twenty two,
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Speaker 3: the girls alleged a breach of anticipatory contract, believe it
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Speaker 3: or not, and it was based on the above statement
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Speaker 3: from Ralph's attorney saying that there's nothing there, there's no
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Speaker 3: contract there. So based on that, the girl they filed
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Speaker 3: in the court, and the court came back with a
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Speaker 3: summary judgment for Ralph because the girls could not demonstrate
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Speaker 3: there was any evidence that Ralph unequivocally repudiated or this
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Speaker 3: alleged contract with Anna, and in fact, and so in fact,
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Speaker 3: they went out of their way to say that Anna
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Speaker 3: the Ralph's will was still unchanged when it was filed.
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Speaker 3: When they filed this claim, I'm like, wow, let's step
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Speaker 3: back and look at this for a minute. So these girls,
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Speaker 3: this really needs to be looked at almost like a
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Speaker 3: second marriage, even though they weren't married. Treat it like
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Speaker 3: a second marriage. Right. So here, the trust I believe
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Speaker 3: was designed very well. It provided for her kids, right
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Speaker 3: gave them twenty five percent income each. It provided for
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Speaker 3: the significant other, Ralph, who was also a caregiver. Of course,
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Speaker 3: I'm scratching my head wondering where were the girls taking
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Speaker 3: care of I mean, why did they have Ralph doing
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Speaker 3: all the caregiving. But they should have been happy together
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Speaker 3: that Ralph was doing that. They should have been pleased,
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Speaker 3: and so it would have taken care of all of them.
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Speaker 3: And then they went on and they actually added Ralph
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Speaker 3: as a co trustee in one of the amendments. If
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Speaker 3: I forgot to mention that they did, well, that's helpful. Right.
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Speaker 3: So now by adding Ralph as a co trustee, you
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Speaker 3: really help Ralph to ensure that he gets what he's
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Speaker 3: supposed to get. But it also allows the girls to
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Speaker 3: still be in charge to ensure that he takes only
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Speaker 3: what he's supposed to take.
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Speaker 2: So that's balance.
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Speaker 3: That's a really not I mean, I'm really impressed at
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Speaker 3: the way this was drafted. Seems to have a nice
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Speaker 3: check and balance. So the drafting was was really important. Now,
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Speaker 3: I think when you look at drafting, it's really important
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Speaker 3: in the beginning. So having the trustees in place, making
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Speaker 3: sure that they actually could have held the house in
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Speaker 3: trust if they wanted to as well. Right, the real
7:42
Speaker 3: estate could have been held in trust and allowed him
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Speaker 3: to live there if they wanted to. This just add
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Speaker 3: I'm trying to add to what this trust could have done.
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Speaker 3: They could have, you know, held the real estate and
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Speaker 3: trust and they didn't address that, but he could have
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Speaker 3: lived there. They could have he could have provided that
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Speaker 3: he paid for all the bills, still live there, which
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Speaker 3: is fine because he was getting fifty percent of the
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Speaker 3: income anyway, so that would have actually helped him to
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Speaker 3: live there and pay the bills.
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Speaker 2: And then they could ensure that the girls would ultimately
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Speaker 2: get the real estate.
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Speaker 3: Get the house. They could, that's right. They could absolutely
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Speaker 3: ensure that in this case the house isn't sold by Ralph,
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Speaker 3: because Ralph's not the sole trustee. You've got the girls
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Speaker 3: serving as trustee. Maybe it would have been set up
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Speaker 3: to say majority vote, although that wouldn't work if it
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Speaker 3: was two against one, so you got to be careful
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Speaker 3: when you do that. But this way you could put
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Speaker 3: a check in bounds and you could have said fine,
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Speaker 3: unanimous to sell. You have to all agree to sell.
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Speaker 3: And the point there is that we don't want to
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Speaker 3: force the sale if we don't have to. If he
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Speaker 3: wants to live there, he can live there as long
8:48
Speaker 3: as he pays the bills. So you see, folks, these
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Speaker 3: trusts really can provide exactly what you want, and they
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Speaker 3: were doing it here. But for really any I think
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Speaker 3: greedy girls, I mean, I don't see any benefit here
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Speaker 3: for them. If you step back and see the forest
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Speaker 3: for the trees, this trust could have done everything. And
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Speaker 3: by the way, this trust did not address what was
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Speaker 3: happening to any real estate or principle. What if there
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Speaker 3: was money in the trust over and above the royalty
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Speaker 3: income that was coming in, maybe that paid out to
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Speaker 3: the girls right away, or maybe some piece of it
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Speaker 3: went to the girls and some you know, give them
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Speaker 3: something and not make them wait until this significant other passes.
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Speaker 3: But at the end of the day, this trust could
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Speaker 3: have done all of that, but instead these girls tried
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Speaker 3: to create this hell of blue. Really is what it
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Speaker 3: comes down to. And in the end, Ralph, who had
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Speaker 3: no obligation to leave them anything, was leaving them stuff.
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Speaker 3: Never even changed his will, so even when they filed
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Speaker 3: the will was still in existence. The girls would have
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Speaker 3: benefited from him. The rest of the trust. Everybody would
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Speaker 3: have been happy. They would have got a lot more
10:01
Speaker 3: had they not filed a claim. Right, So folks trusts work,
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Speaker 2: You've been listening to Todd Lutsky, a partner with the
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Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
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Speaker 2: financial advisor with the Armstrong Advisory Group. We've got much
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Speaker 2: Welcome back into the Legal Exchange with Todd Lotsky. I'm
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Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
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Speaker 2: and I'm joined by Todd Lutsky, a partner with a
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Speaker 2: law firm of Cushing and Dolan with a master's in taxation.
14:35
Speaker 2: Where are we headed now?
14:37
Speaker 3: We're gonnad over to Ohio on an appellet court case.
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Speaker 4: There.
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Speaker 3: Look how this planning plays out. So William was in
14:44
Speaker 3: a relationship with Laverne, and during the relationship, William designated
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Speaker 3: Laverne as a transfer on death beneficiary of his home.
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Speaker 3: I don't understand how you do that. You do that again?
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Speaker 3: This is in Ohio, So i don't know what their
15:02
Speaker 3: laws are, but I'm going to take a shot at
15:04
Speaker 3: saying that probably means a life estate and I'll explain
15:08
Speaker 3: that got it later. And basically, all of Bill's family
15:14
Speaker 3: members believed this designation was a result of undue influence
15:20
Speaker 3: and that Bill was in diminished mental capacity when he
15:23
Speaker 3: did this. So they basically all tried. They went to
15:29
Speaker 3: they filed a claim, and they basically saying that all
15:32
Speaker 3: the parties tried to resolve this matter informally. They engaged
15:37
Speaker 3: in settlement negotiations with Laverne, they hired a lawyer. They
15:42
Speaker 3: tried to do everything without filing an action, which is fine. However,
15:48
Speaker 3: when they failed to settle, the family went ahead and
15:52
Speaker 3: filed a claim to set aside the transfer on death deed. Well,
15:58
Speaker 3: during the process, laverne attorney said that, oh yeah, okay,
16:02
Speaker 3: well you know we'll give we'll waive service of process.
16:05
Speaker 3: You don't have to file for us, and then delayed
16:08
Speaker 3: some more and then never actually waive the service of process.
16:11
Speaker 3: So the family said, fine, will try to serve her directly,
16:15
Speaker 3: and they tried several times to serve her, but they
16:17
Speaker 3: were not able to serve her. Laverne then filed to
16:22
Speaker 3: file an answer to the complaint late without court approval,
16:26
Speaker 3: finally answered the complaint. Well, the family files for default
16:32
Speaker 3: judgment and a motion to strike, basically the the late
16:36
Speaker 3: filed answer. The appropriate court actually allowed Laverne time to
16:40
Speaker 3: respond to their motion, but untimely their untimely motion, but
16:47
Speaker 3: they ultimately granted the motion to strike and the default judgment,
16:51
Speaker 3: stating that Laverne that the transfer on death deed is invalid. Well,
16:56
Speaker 3: LaVerne's not happy with that, sure, so she appeals and
17:01
Speaker 3: her argument was the court aired in issuing this decision
17:05
Speaker 3: because she actively participated in the pre trial settlement negotiations
17:11
Speaker 3: and therefore she did actively defend her claim. Well, the
17:17
Speaker 3: court said, sorry, thanks for playing, but pre trial negotiations
17:21
Speaker 3: do not constitute actively defending a legal filing of a claim.
17:26
Speaker 3: It was done before filing of a claim, and therefore
17:29
Speaker 3: it does not apply. And we agree that the transfer
17:33
Speaker 3: on death deed, whatever this is, is invalid. So and
17:39
Speaker 3: I think they probably got the right result here. But
17:42
Speaker 3: I'm going to talk to you a little bit about
17:44
Speaker 3: that deed and about how to handle real estate when
17:47
Speaker 3: you're doing your planning certainly, I think something a little
17:50
Speaker 3: more elaborate could have been done here than what was done.
17:53
Speaker 3: And folks, when I talk about something more elaborate, sometimes
17:57
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18:48
Speaker 2: Thirty years of questions. Did you pass the bar when
18:51
Speaker 2: you were twelve?
18:52
Speaker 3: I'll tell you all, thank you, thank you very nuts.
18:54
Speaker 3: That very nice view today, So let's figure out what
19:01
Speaker 3: we could learn, you know, from.
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Speaker 2: This, because they weren't married, right, they were just in
19:05
Speaker 2: a relationship.
19:07
Speaker 3: That's what it says. Hey, we're just in a relationship
19:09
Speaker 3: with Laverne. So it does strike me as a little
19:13
Speaker 3: strange that you would give away your house to somebody
19:17
Speaker 3: you're not even married to yet.
19:19
Speaker 2: I mean, that's I mean, I guess it depends on
19:21
Speaker 2: how long you're in that relationship for I'm going to
19:23
Speaker 2: use more details. Can you get the family online for me?
19:26
Speaker 4: Please?
19:26
Speaker 3: Would be nice and these cases would somehow provide a
19:30
Speaker 3: little more insight. But yeah, we don't always have all
19:33
Speaker 3: the facts. So so what's a transfer on death deed?
19:36
Speaker 3: You know, I'm really not sure how in Ohio you
19:39
Speaker 3: can do a transfer on death deed. In fact, for
19:41
Speaker 3: real estate, generally we think of transfer on deaths as
19:46
Speaker 3: on a bank account, right on an investment account, right
19:50
Speaker 3: to the order of payable on death too. Name designated
19:54
Speaker 3: beneficiary is and you get these forms and you fill
19:57
Speaker 3: them out and they belong on bank accounts and that accounts.
20:00
Speaker 3: You hear about designated beneficiaries on iras all the time. Yeah,
20:05
Speaker 3: and what do they do?
20:05
Speaker 4: Well?
20:06
Speaker 3: They avoid probate, the asset goes directly to the beneficiary
20:10
Speaker 3: that's listed. Well, that that makes sense, Well can I
20:15
Speaker 3: don't love it from a planning perspective, but I'd rather
20:17
Speaker 3: have it in a trust going where I wanted to go. Well,
20:21
Speaker 3: what about this idea that I think this is probably
20:24
Speaker 3: more akin to a life estate. Right now, remember that
20:28
Speaker 3: would mean that that William in this case effectively transferred
20:34
Speaker 3: the house to.
20:34
Speaker 2: Laverne, right gave it away during life.
20:37
Speaker 3: I would say, that's right, a completed gift right, but
20:41
Speaker 3: retained this life estate, this right to live there. So
20:47
Speaker 3: they're the current owner on the on the property. Effective
20:51
Speaker 3: for the current present owner, well that that would effectively
20:56
Speaker 3: mean that he did give away something, there was a
20:58
Speaker 3: completed gift of that remainder interest. Well she retains the
21:02
Speaker 3: right or well he retains the right the right to
21:05
Speaker 3: live there. Now at his death, the life estate would
21:12
Speaker 3: automatically terminate and the remain and the life a state
21:17
Speaker 3: peace would kind of vest with the remainder. So in essence,
21:23
Speaker 3: it's kind of like a transfer on death right.
21:26
Speaker 2: Solverine gets everything when.
21:28
Speaker 3: He dies when he dies, So to me, maybe that's
21:30
Speaker 3: what I think, That's what they're saying it's a transfer
21:32
Speaker 3: on death deed, which means as soon as Bill dies,
21:38
Speaker 3: the house belongs one hundred percent to Laverne.
21:42
Speaker 2: So she can't kick him out. But what if they
21:43
Speaker 2: break up?
21:44
Speaker 3: Yeah? See this, this is exactly the problem I have
21:48
Speaker 3: with the life estates. You've given up way too much control.
21:52
Speaker 3: You break up and you want to sell it, and
21:54
Speaker 3: good luck, you're going to have to talk to her,
21:56
Speaker 3: right because she's going to have to sign. You're gonna
21:58
Speaker 3: have to sign, and it gets worse. Even if you
22:02
Speaker 3: can agree that neither of you want the house, well
22:05
Speaker 3: when you go to sell it. At that point, if
22:07
Speaker 3: they both agree, you're going to now have to look
22:09
Speaker 3: at these IRS tables that tell us, based on your age,
22:15
Speaker 3: what percentage of the proceeds belong to the life tenant
22:20
Speaker 3: and what percentage belongs to the remainderment.
22:23
Speaker 2: It's not all going to him.
22:24
Speaker 3: Yeah, So depending on how old you are, Remember the
22:28
Speaker 3: older you are looking at it from a life estate perspective. Right,
22:31
Speaker 3: the older you are, the smaller the value of the
22:35
Speaker 3: life estate and the bigger the value of the remainder interest.
22:38
Speaker 2: And I think you've told this in the past, Like
22:39
Speaker 2: if someone's like seventy five maybe you'd get like twenty
22:42
Speaker 2: or twenty five percent.
22:44
Speaker 3: That's a little low, but yeah, you're right, But yeah,
22:46
Speaker 3: I would say you probably get a little more than
22:48
Speaker 3: that or not all. Yeah, so this is I don't
22:50
Speaker 3: have their ages. But and then of course there's capital
22:53
Speaker 3: gains tax problems because now you know the life tenant
22:57
Speaker 3: would get you know, they if they live there. I guess, well,
23:00
Speaker 3: I guess if they both live there, they would get
23:02
Speaker 3: the capital gains of exclusion.
23:03
Speaker 2: But if you did this with your kids, for example, yeah,
23:06
Speaker 2: nothing good.
23:07
Speaker 3: But more importantly, nothing good for Bill. What if you
23:09
Speaker 3: needed the money to buy another house and she got
23:11
Speaker 3: the majority of the proceeds, She's not going to give
23:13
Speaker 3: it to them.
23:14
Speaker 2: What would have been a better way to handle this?
23:16
Speaker 3: So I think if they had put a trust together,
23:18
Speaker 3: clearly it would have been better. They could have put
23:20
Speaker 3: the family members on as trustees. They could have held
23:23
Speaker 3: the trust, the house and trust for Laverne right, let
23:26
Speaker 3: her live there, the significant others allowed to live there
23:29
Speaker 3: her whole life. You could have set aside money for
23:32
Speaker 3: the family. You would still have avoided probate. You know,
23:37
Speaker 3: the planning really would have allowed you to do a
23:40
Speaker 3: lot more for each other and for the family than
23:43
Speaker 3: you otherwise could if you didn't do it. So avoid
23:47
Speaker 3: this litigation. Get your planning in order, and in your case,
23:51
Speaker 3: maybe the planning is the use of an irrevocable trust.
23:54
Speaker 3: Not for everyone. But if you ever thought about learning
23:56
Speaker 3: how they work, call and get this guide. It will
23:59
Speaker 3: tell you how they work. Eight six six eight four
24:02
Speaker 3: eight five six nine nine or Legal Exchange show dot com.
24:07
Speaker 2: You've been listening to Todd Lutsky, a partner with the
24:09
Speaker 2: law firm of Cushing A. Dolan. I'm Susan Powers, a
24:13
Speaker 2: financial advisor with the Armstrong Advisory Group. Todd will be
24:16
Speaker 2: answering your listener questions when we return to the Legal
24:20
Speaker 2: Exchange with Todd Lutsky.
24:23
Speaker 1: Elder life planning can be overwhelming, so be sure you're
24:26
Speaker 1: prepared or you could make costly mistakes that affect your
24:29
Speaker 1: overall plan. Cushing and Dolan are experts in elder lawn
24:32
Speaker 1: taxation and they can devise a plan that covers you
24:34
Speaker 1: in every area where issues can rise. Irrevocable trusts so
24:38
Speaker 1: are the most common type of trust that folks use
24:40
Speaker 1: for financial protection, and while they can be complicated to create.
24:43
Speaker 1: They help keep your assets safe because they contain specific
24:46
Speaker 1: protections that many of us need, like the possibility of
24:49
Speaker 1: eliminating your estate taxes. Their new guide is called Unlocking
24:53
Speaker 1: the Power of Irrevocable Medicaid Trusts. Learn more about how
24:56
Speaker 1: these trusts can benefit you and your family by calling
24:59
Speaker 1: eight six six eight four eight five six ninety nine
25:01
Speaker 1: right now and asking for.
25:03
Speaker 4: Your free guide today.
25:04
Speaker 1: That's eight sixty six eight four eight five six nine nine,
25:07
Speaker 1: or you can request the guide right now by visiting legal.
25:10
Speaker 4: Exchange show dot com.
25:11
Speaker 1: The proceeding was paid for and the views expressed are
25:13
Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan Indoor
25:16
Speaker 1: Armstrong Advisory may contact you're offering legal or investment services.
25:19
Speaker 1: Cushing and Dolan in Armstrong Advisory do not endorse each
25:21
Speaker 1: other and are not affiliated.
25:23
Speaker 6: There are many different elements to a complete retirement plan,
25:26
Speaker 6: and it takes time to make sure you've covered all
25:28
Speaker 6: your bases. HI, this is Mike Armstrong from the Armstrong
25:31
Speaker 6: Advisory Group. Our new guide is called Your Retirement Preparation Checklist,
25:35
Speaker 6: and it may offer you the guidance you need to
25:37
Speaker 6: make the right decisions about your retirement plan, from deciding
25:40
Speaker 6: on a specific date to retire, to reviewing your income
25:42
Speaker 6: sources to picking a place to live. This guide discusses
25:45
Speaker 6: numerous topics that are important to your overall planning. Many
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Speaker 6: other issues need to be considered as well, like solidifying
25:51
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Speaker 6: now at eight hundred three nine three four zero zero
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25:59
Speaker 6: again is eight hundred three nine three four zero zero one,
26:02
Speaker 6: or you can request it online at Armstrong Advisory dot com.
26:06
Speaker 6: That's Armstrong Advisory dot com.
26:08
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
26:10
Speaker 1: registered investment advisor. Nothing in the ad or in any
26:13
Speaker 1: Armstrong Guide a specific financial, legal, or tax advice. Consult
26:16
Speaker 1: your own financial, tax, and estate planning advisors before making
26:19
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
26:22
Speaker 1: advisory services. Summer in New England is nearly upon us.
26:26
Speaker 1: The kids are home from school, the sun doesn't set
26:28
Speaker 1: until after eight. It's likely time for you to relax.
26:31
Speaker 4: Well.
26:32
Speaker 1: While you're relaxing, take a few minutes to check out
26:34
Speaker 1: visit USVII dot com and research your next vacation in
26:37
Speaker 1: the United States Virgin Islands. The USVII has something for everyone.
26:42
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26:44
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26:48
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26:51
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26:54
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27:12
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27:17
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27:17
Speaker 1: USVII dot com to make your reservation today. That's visit
27:21
Speaker 1: USVII dot com. You're listening to the Legal Exchange, and
27:26
Speaker 1: it's time for Ask Todd, the segment where Todd will
27:29
Speaker 1: answer your questions about anything and everything that's included in
27:33
Speaker 1: the estate planning process. Once again, here's Todd Lutsky and
27:37
Speaker 1: Susan Powers.
27:40
Speaker 2: Welcome back. Tod have a few questions from listeners. First
27:43
Speaker 2: one comes from John and Plainville, Connecticut, and John writs,
27:47
Speaker 2: I am sixty five, single and fairly healthy. Most of
27:52
Speaker 2: my money is in my retirement accounts. Is there any
27:54
Speaker 2: way to protect that money from the nursing home so
27:57
Speaker 2: I can leave it to my children instead if I
28:00
Speaker 2: don't end up in the nursing home. Is there any
28:02
Speaker 2: way to protect their inheritance?
28:05
Speaker 3: Now, this is a weird question in the sense that
28:08
Speaker 3: they use this word protect without telling me from what.
28:13
Speaker 2: Well, I think that it's safe to say that they
28:15
Speaker 2: want to protect it from nursing homes.
28:17
Speaker 3: Right, But then there was a second part that says,
28:19
Speaker 3: is there any way to protect their inheritance?
28:21
Speaker 2: He doesn't end up using it all in a nursing home.
28:23
Speaker 3: So let's the downside the unfortunately single that doesn't help.
28:30
Speaker 3: But as a single person, unfortunately, there is not a
28:34
Speaker 3: lot you can do. Although you're sixty five, I guess
28:37
Speaker 3: you have some time to take some money out of
28:39
Speaker 3: the IRA. But remember the downside with iras is we
28:43
Speaker 3: cannot move it into one of these irrevocable trusts that
28:48
Speaker 3: we are That's really the guide this month.
28:51
Speaker 2: As an ira.
28:52
Speaker 3: Yeah, you can't move it as an ira. You're right,
28:54
Speaker 3: in order, but in order to put it in And
28:56
Speaker 3: I don't know if it's if that's the lion's share
28:58
Speaker 3: of his of his money. I don't know how big
29:01
Speaker 3: a number we're talking about, but I mean, if you
29:03
Speaker 3: had a million dollars in there, you're certainly not going
29:06
Speaker 3: to pull a million dollars out. Even if you said, well, fine,
29:09
Speaker 3: I only want to protect half, I'm not sure i'd
29:12
Speaker 3: pull five hundred thousand dollars out because if I do that,
29:16
Speaker 3: you figure I'm going to lose forty percent in taxes
29:19
Speaker 3: state and federal. I mean, that's two hundred grand.
29:24
Speaker 2: That's basically given the irs a gift, a gift because
29:28
Speaker 2: you don't know if you're gonna end up in a
29:30
Speaker 2: nursing home.
29:30
Speaker 3: You don't, and so I wouldn't do it in advance
29:33
Speaker 3: of going to a nursing home. Certainly, if I was
29:36
Speaker 3: going in the nursing home, there might be something we
29:39
Speaker 3: can do then, yeah, last minute thing, but I probably
29:43
Speaker 3: would would stay away from that. But I would certainly
29:45
Speaker 3: ask him, well, you know, maybe you've got a house.
29:49
Speaker 3: He didn't mention it here, but most people have a house.
29:52
Speaker 3: So I would say, well, fine, leave the IRA outside
29:54
Speaker 3: the trust. And when we talk about protecting something from
29:58
Speaker 3: the nursing home, how about the house? How about the rental?
30:01
Speaker 3: How about you know, if there are other non IRA
30:05
Speaker 3: investment accounts, all of those kinds of things for everybody else.
30:09
Speaker 3: To try to expand this question a little bit, John,
30:11
Speaker 3: for all the other listeners. You know, those kinds of
30:15
Speaker 3: things can all go into these medicaid trusts. And yes,
30:20
Speaker 3: now you're protecting it from probate, the nursing home, and
30:23
Speaker 3: really the next part of your question protecting it for
30:26
Speaker 3: your children. So if you can't do an irrevocable trust,
30:32
Speaker 3: then maybe set up a revocable trust, especially if the
30:35
Speaker 3: IRA is in fact a large number like you're suggesting
30:39
Speaker 3: it is here, Why would I do that?
30:41
Speaker 4: So?
30:42
Speaker 3: Well, while I can't really protect it from the nursing home,
30:45
Speaker 3: I can at least take care of the second part
30:47
Speaker 3: of my question.
30:48
Speaker 2: Because the first part was protecting from the nursing home
30:50
Speaker 2: while he's living. But he's just saying anyway to protect
30:53
Speaker 2: their inheritance that could be after I'm dead, creditors, divorce proofing,
30:57
Speaker 2: they might be spendthrifts. There's a lot of things here,
31:00
Speaker 2: things he might want to protect from.
31:02
Speaker 3: I totally agree, and I think that's where he's going
31:05
Speaker 3: with the second part of this question. And so I
31:08
Speaker 3: would say to them, Yeah, why not make the designated
31:12
Speaker 3: beneficiary on the IRA your revocable trust which will become
31:18
Speaker 3: irrevocable when you die. But while you can't get the
31:22
Speaker 3: IRA in there while you're alive, you certainly, I mean
31:26
Speaker 3: without a big income tax, you certainly can get it
31:29
Speaker 3: in there when you're dead.
31:31
Speaker 4: Yeah.
31:31
Speaker 3: And therefore, as long as the trust is drafted properly
31:35
Speaker 3: to receive the IRA, yes, the minimum distributions are still
31:39
Speaker 3: going to come out over a ten year period for
31:42
Speaker 3: the children under the Secure Act. At least it'll be
31:47
Speaker 3: dumped into the trust and then the trust can hold it,
31:50
Speaker 3: protecting it, as you said, Susan, from those creditors, the divorces,
31:54
Speaker 3: et cetera. And even perhaps skipping generationally a state tax
32:00
Speaker 3: is to get it to the next generation when the
32:02
Speaker 3: children die.
32:03
Speaker 2: Got it, So.
32:04
Speaker 3: Lots can be done. I think there's still planning folks
32:07
Speaker 3: for you, John, and for others in that position. You
32:10
Speaker 3: can still plan for folks that have other assets other
32:13
Speaker 3: than iras and want to protect them from the nursing home.
32:16
Speaker 3: Please call and get the guide Power of Irrevocable Medicaid
32:20
Speaker 3: Trusts again. It's it's designed in a question answer format
32:24
Speaker 3: to help you understand exactly how it works. All the
32:28
Speaker 3: things you can do and the very few things you
32:30
Speaker 3: can't do with an irrevocable medicaid trust. That'll help you
32:34
Speaker 3: understand really how flexible they are. Call and get the
32:37
Speaker 3: guide eight six six eight four eight five six nine
32:41
Speaker 3: nine or Legal Exchange Show dot com again eight six
32:45
Speaker 3: six eight four eight five six nine nine or Legal
32:49
Speaker 3: Exchange Show dot com.
32:51
Speaker 2: Our last question comes from Pat in Orleans, mass and
32:55
Speaker 2: Pat raids. My husband and I are in our early
32:57
Speaker 2: eighties and we have two children. We own several rental properties,
33:01
Speaker 2: one of which my son lives in. We'd like to
33:04
Speaker 2: treat our son and Daughta equally, but we want to
33:06
Speaker 2: make sure our son receives the house he lives in.
33:09
Speaker 2: We're in failly good health, but we've put off doing
33:11
Speaker 2: any planning and are afraid it may be too late
33:14
Speaker 2: to protect our assets. Given our ages. Should we pick
33:18
Speaker 2: two relatively equal value properties, indeed one to each of
33:22
Speaker 2: our kids.
33:23
Speaker 3: Now, let me start off with the last question.
33:26
Speaker 2: No, no, emphatically, No, that's.
33:28
Speaker 3: An easy one. This is done. So we're done with this.
33:30
Speaker 3: Can we move on now? Because the answer to is no, lot,
33:33
Speaker 3: So we definitely at eighty years old, the last thing
33:36
Speaker 3: you want to do, folks. And again I don't know
33:38
Speaker 3: what they're worth, but you figure the two properties, I mean,
33:41
Speaker 3: combine their several properties less than four million. I'm getting they've.
33:44
Speaker 2: Got several rental properties plus their house and Orleans. They
33:47
Speaker 2: might be above or below.
33:48
Speaker 3: Somewhere four million, and they could be a little over
33:50
Speaker 3: four million, perhaps depending but easily you know, easily more
33:54
Speaker 3: than two. Sure, and so let's call it four or
33:58
Speaker 3: five million, whatever it's in that range for sure. Again,
34:02
Speaker 3: most of their assets sounds like it could be heavy
34:05
Speaker 3: in real estate, yes, which is a generally low basis asset.
34:11
Speaker 3: I've paid for these long ago. I'm eighty after all,
34:14
Speaker 3: and I bought them when they were little in value,
34:17
Speaker 3: and they're worth much more today. So what do we do?
34:21
Speaker 3: Well we give those away, then you will be trapping
34:24
Speaker 3: all this built in capital gain, right, and capital gain
34:29
Speaker 3: is in other words, when you give them away whatever
34:31
Speaker 3: they paid for them, not only what they paid for them.
34:34
Speaker 3: If some of them are rental properties, what they paid
34:36
Speaker 3: for them, less depreciation.
34:38
Speaker 2: Right, so they could easily have no cost basis left.
34:42
Speaker 3: If those rental properties have zero basis and you're transferring
34:46
Speaker 3: those to the children, now you are giving the children
34:50
Speaker 3: zero basis, which means when they either keep it and
34:54
Speaker 3: want to rent it later, they don't get to depreciate
34:58
Speaker 3: it anymore to offset the rental income because there's no basis,
35:01
Speaker 3: or if they sell them, if instead they decide to
35:04
Speaker 3: sell it susan, then they're all the gain. The entire
35:08
Speaker 3: proceeds would be taxable apportion at capital gains rates and
35:12
Speaker 3: the depreciation recapture at ordinary income rates. So it's a
35:16
Speaker 3: really big hit. So don't do that. So we're talking
35:19
Speaker 3: every bit of close to thirty percent capital gains tax
35:23
Speaker 3: trying to factor in a little depreciation recapture versus keeping
35:27
Speaker 3: them doing estate planning and sheltering. Up to four million
35:31
Speaker 3: from mass taxe twenty eight million federal tax. So you
35:37
Speaker 3: can already see if we keep the asset and we
35:40
Speaker 3: die owning it, likely there will be no federal tax,
35:44
Speaker 3: death tax, and maybe minimal whatever the amount is north
35:49
Speaker 3: of four million, because now remember at the new law,
35:52
Speaker 3: there's no cliff rule anymore. So you go over four million,
35:55
Speaker 3: you only pay tax on the amount over four million,
35:58
Speaker 3: So you know we shelter four or million from mass tax.
36:04
Speaker 3: I don't care if I had two million subject to
36:06
Speaker 3: mass tax, I still had to pay tax on It's
36:08
Speaker 3: only ten percent, right, So.
36:10
Speaker 2: How do they ensure that their son gets the rental
36:13
Speaker 2: property that he currently lives in.
36:14
Speaker 3: Put together the trusts in this case if they want
36:17
Speaker 3: to protect them too, irrevocable medicaid trusts would be the
36:20
Speaker 3: way to go. Now they're protected, they're avoiding probate when
36:23
Speaker 3: they die, the asset and the trust will say property
36:26
Speaker 3: located at XYZ goes here, property at you know, tod
36:31
Speaker 3: goes here, and we're all done. And so that way
36:35
Speaker 3: those properties go to the kids they want and a
36:38
Speaker 3: full step up in basis eliminating all the built in
36:41
Speaker 3: capital gain.
36:43
Speaker 2: So can they still do that as equal beneficiaries though
36:46
Speaker 2: if the properties aren't worth the same or so.
36:48
Speaker 3: It's always tough when you start allocating assets to balance,
36:51
Speaker 3: So you're going to have to either allocate money one
36:53
Speaker 3: to the other for the difference in the fair market
36:55
Speaker 3: value they're never exactly equal. Got it, but you're going
36:58
Speaker 3: to have to do some planning to get there. Folks,
37:00
Speaker 3: call and get the guide if you want to learn
37:02
Speaker 3: about Medicaid, air revocable trusts eight six six eight four
37:06
Speaker 3: eight five six nine nine or Legal Exchange Show dot com.
37:10
Speaker 2: If you have a question you would like to ask Todd,
37:13
Speaker 2: visit his website Legal Exchange Show dot com and click
37:16
Speaker 2: on the ask Tod tab. Maybe I'll be able to
37:19
Speaker 2: read your question on the air, and hopefully his answer
37:22
Speaker 2: will stop you from becoming one of his next real
37:24
Speaker 2: life stories. You've been listening to Todd Lutsky, a partner
37:28
Speaker 2: with a law firm of Cushing and Dolan. I'm Susan Powers,
37:32
Speaker 2: a financial advisor with the Armstrong Advisory Group. We'll be
37:35
Speaker 2: back with more after this quick break on the Legal
37:38
Speaker 2: Exchange with Todd Lutski.
37:40
Speaker 1: Elder life planning can be overwhelming, so be sure you're
37:43
Speaker 1: prepared or you could make costly mistakes that affect your
37:46
Speaker 1: overall plan. Cushing and Dolan are experts in elder lawn taxation,
37:50
Speaker 1: and they can devise a plan that covers you in
37:52
Speaker 1: every area where issues can rise. Irrevocable trust so the
37:55
Speaker 1: most common type of trust that folks use for financial protection,
37:59
Speaker 1: and while they can be complicated to create, they help
38:01
Speaker 1: keep your assets safe because they contain specific protections that
38:04
Speaker 1: many of us need, like the possibility of eliminating your
38:07
Speaker 1: estate taxes. Their new guide is called Unlocking the Power
38:11
Speaker 1: of Irrevocable Medicaid Trusts. Learn more about how these trusts
38:14
Speaker 1: can benefit you and your family by calling eight six
38:17
Speaker 1: six eight four eight five six ninety nine right now
38:19
Speaker 1: and asking for.
38:20
Speaker 4: Your free guide today.
38:21
Speaker 1: That's eight six six eight four eight five six nine nine,
38:25
Speaker 1: or you can request the guide right now by visiting legal.
38:27
Speaker 4: Exchangshow dot com.
38:29
Speaker 1: The proceeding was paid for and the views expressed are
38:31
Speaker 1: solely those of Cushing and Dolan. Cushing and Dolan ind
38:33
Speaker 1: or Armstrong Advisory may contact you're offering legal or investment services.
38:36
Speaker 1: Cushing and Dolan in Armstrong Advisory do not endorse each
38:39
Speaker 1: other and are not affiliated. Summer in New England is
38:41
Speaker 1: nearly upon us. The kids are home from school, the
38:44
Speaker 1: sun doesn't set until after eight. It's likely time for
38:47
Speaker 1: you to relax.
38:48
Speaker 4: Well.
38:48
Speaker 1: While you're relaxing, take a few minutes to check out
38:51
Speaker 1: visit USVII dot com and research your next vacation in
38:54
Speaker 1: the United States Virgin Islands. The USVII has something for everyone.
38:58
Speaker 1: Be it the rich history of Sane, the spectacular beaches
39:01
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Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
40:29
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40:31
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40:34
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40:37
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40:41
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40:46
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41:01
Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
41:04
Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
41:08
Speaker 2: and I'm joined, of course by Todd Lutsky, a partner
41:11
Speaker 2: with the law firm of Cushing and Dolan with a
41:13
Speaker 2: master's in taxation. So we're talking about your irvocable medicaid
41:19
Speaker 2: trusts and the questions that you've accumulated that are included
41:23
Speaker 2: in this guide over decades, really the most frequently ones.
41:27
Speaker 2: So you put your plan together, you need to put
41:32
Speaker 2: some assets in there to make it work, type of
41:37
Speaker 2: old paper weight or some kindling. If you've done.
41:38
Speaker 3: Nothing, I totally agree.
41:40
Speaker 2: What type of assets should someone actually retitle or transfer
41:44
Speaker 2: into one of these irrevocable medicaid trusts?
41:47
Speaker 3: You know, great question. We had a segment or the
41:50
Speaker 3: segment earlier, we had a question that sort of dealt
41:53
Speaker 3: with this, right, what's the one thing we said we
41:56
Speaker 3: cannot put.
41:57
Speaker 2: In no retirement account, right, and that's a big.
41:59
Speaker 3: Asset for a lot of people, just like the caller
42:01
Speaker 3: had when when the question the listener rather with the
42:05
Speaker 3: question that they that they post. Yeah, absolutely, an IRA
42:10
Speaker 3: is one thing you don't put in. But that's okay
42:12
Speaker 3: because we're going to live on that. We're going to
42:14
Speaker 3: enjoy that. And and many financial advisors will never tell
42:18
Speaker 3: you this. Their goal is, oh, spend that last, spend
42:21
Speaker 3: that last. I get it. It's taxball and I get it.
42:24
Speaker 3: But they saved already. Now leaving it to the kids.
42:29
Speaker 3: Two problems. It comes out over ten years, which could
42:33
Speaker 3: put them in a higher income tax bracket than the
42:35
Speaker 3: older person living there. I mean the older person enjoying it,
42:39
Speaker 3: living off of that asset. And it's not protected from
42:44
Speaker 3: the nursing home. So why not shift our thinking and
42:47
Speaker 3: spend that first and take IR or take non IRA money,
42:52
Speaker 3: put it in the trust and nice investment portfolio, put
42:54
Speaker 3: it in the trust. Why not take your rental property
42:57
Speaker 3: put it in, take your home put it in. They
43:00
Speaker 3: caation home put it in. So all these kinds of
43:03
Speaker 3: things can go in.
43:04
Speaker 2: Yep.
43:05
Speaker 3: So there's really no limit, And there's really no difference
43:08
Speaker 3: between a revocable or an irrevocable in terms of funding.
43:11
Speaker 3: It either just not the IRA.
43:14
Speaker 2: Okay, so you are restricted from like with a revocable
43:17
Speaker 2: you can reach in and take something back, right, But
43:20
Speaker 2: with an irrevocable, you can't reach back into that bucket
43:23
Speaker 2: and put it back in your pocket directly. Correct.
43:25
Speaker 3: Well, it depends what we're talking about, right. You know,
43:28
Speaker 3: for real estate that's really not an issue. But for money,
43:32
Speaker 3: you get all the income.
43:33
Speaker 2: So if that real estate is rental property, right, then
43:37
Speaker 2: you're still getting all your income.
43:38
Speaker 4: Right.
43:39
Speaker 3: So you say I can't take it, but I can, right,
43:41
Speaker 3: because if I throw my rental property in there and
43:44
Speaker 3: it's kicking out, you know, three grand a month for
43:47
Speaker 3: grand a month, and I want it, it's coming to you.
43:50
Speaker 3: And if you actually had a multi family and you
43:52
Speaker 3: live in one and you have a rental property in there,
43:54
Speaker 3: and you live in one of the units and you
43:57
Speaker 3: keep a life estate, the rent can come to correctly
44:00
Speaker 3: to you.
44:00
Speaker 2: So you don't even have to do a separate thing.
44:02
Speaker 3: You don't even have to do a separate thing. And
44:03
Speaker 3: you know in your investment portfolio, right, how many folks
44:06
Speaker 3: when they put their investment portfolio anywhere, they sit back
44:09
Speaker 3: and they collect what income. Their goal is not to
44:13
Speaker 3: take the principle and that's just practical financial planning living.
44:18
Speaker 2: So what ideas how is it handled if someone puts
44:21
Speaker 2: investments in there, whether it's rental or or you know,
44:25
Speaker 2: stock investments, things like that. What if they don't, they've
44:29
Speaker 2: never taken the income. Who pays the taxes on that?
44:32
Speaker 2: Once those investments are owned by their irrevocable trust.
44:36
Speaker 3: Yeah, so taxes are always a big concern. So many
44:39
Speaker 3: people think that, you know, if I have an irrevocable trust,
44:43
Speaker 3: I'm going to pay taxes at a higher rate. And
44:44
Speaker 3: it's a It's true in some cases, not in this case.
44:49
Speaker 3: So these particular trusts are designed as grand or trust
44:54
Speaker 3: for income tax purposes. So in English, that means even
44:57
Speaker 3: though you don't own the asset anymore, you are treated
45:01
Speaker 3: as the owner for income tax. So any capital gains,
45:06
Speaker 3: any interest, any dividends, any rent, any expenses all get
45:12
Speaker 3: reported on the tax return for the trust, just for
45:17
Speaker 3: informational purposes. Then the trust generates a letter to the
45:24
Speaker 3: donor moms and dads like a ten ninety nine. The
45:28
Speaker 3: moms and dads or more like a K one from
45:31
Speaker 3: a company, and you then have all of that information gains, interest, dividends, expenses,
45:38
Speaker 3: rent on that letter telling you the donor put all
45:44
Speaker 3: that on your tax return.
45:45
Speaker 2: So whether you take it or not, just like when
45:47
Speaker 2: it wasn't owned by the trust, or if you didn't
45:49
Speaker 2: take the income, you still had to pay taxes on.
45:51
Speaker 3: To pay taxes. Okay, it's absolutely how it works. So
45:55
Speaker 3: it is income tax neutral, folks. And that's just a
45:58
Speaker 3: few of the items of dos and don'ts that you'll
46:01
Speaker 3: find in this guide. Power of Irrevocable Medicaid Trust. It
46:06
Speaker 3: really is that it's a question and answer guide, but
46:08
Speaker 3: it's really full of all the things that you can
46:10
Speaker 3: do and the few things you can't do, and it'll
46:13
Speaker 3: help you understand exactly how they work while you're living,
46:16
Speaker 3: what happens when one dies. As Susan talked about the
46:19
Speaker 3: income tax side of things, what you can put in,
46:22
Speaker 3: what you can't, how you can operate it. I think
46:25
Speaker 3: if you've ever wondered how the trust works, this guide
46:29
Speaker 3: is for you. Call and get it eight sixty six
46:32
Speaker 3: eight four eight five six ninety nine or Legal Exchange
46:36
Speaker 3: Show dot com again eight sixty six eight four eight
46:40
Speaker 3: five six nine nine or Legal Exchange show dot com.
46:44
Speaker 2: So I know the word arievocable can be scary and
46:47
Speaker 2: intimidating to some people, and they may not want to
46:50
Speaker 2: start right out of the gate putting everything in their
46:52
Speaker 2: areevocable trust, the home, easypasy goes in. Nothing happens with that.
46:57
Speaker 2: What if they finally come up around to putting other
47:01
Speaker 2: stuff into their trust, you know, years after they created
47:05
Speaker 2: the trust.
47:07
Speaker 3: So going back to the well if you will.
47:09
Speaker 2: Yeah exactly to say, okay, you know what, we're getting
47:12
Speaker 2: older now and I see that my life hasn't really changed.
47:14
Speaker 2: I want to add more savings or investments to this
47:19
Speaker 2: irrevocable trust. How does that work? Do you restart your
47:23
Speaker 2: five year clock completely? Do you sneak it under the
47:26
Speaker 2: gate to kind of go with the original five year clock?
47:30
Speaker 2: How's that handled?
47:31
Speaker 3: And it's a really really great question because the way
47:34
Speaker 3: you come about this is many times clients will say,
47:37
Speaker 3: you know what, I'm comfortable with. I'm comfortable with this
47:43
Speaker 3: idea of putting my house in I like it, I
47:45
Speaker 3: get it right, I'm okay with my vacation home. Let's
47:48
Speaker 3: put it in there, and let's start that. That's a
47:49
Speaker 3: good chunk of my assets. Let's get this clock running.
47:52
Speaker 3: But you know, I'm a little worried about putting money in.
47:55
Speaker 3: I think I'll wait, right, and they do, and they
47:58
Speaker 3: come back after a year or two and they say, hey,
48:00
Speaker 3: you know what, You're right. My life really hasn't changed
48:02
Speaker 3: at all. This trust is not causing me any grief.
48:06
Speaker 3: I'm not feeling like i'm limited. I'm not feeling like
48:09
Speaker 3: my life has been changed in some way because I
48:12
Speaker 3: have this trust. You know what, I'm ready to dump
48:15
Speaker 3: half a million dollar investment portfolio in or whatever the
48:18
Speaker 3: number is, Go right ahead. Two caveats One, Yes, you
48:22
Speaker 3: can do it. To take a look at how old
48:25
Speaker 3: you are at the time, what your health is like.
48:29
Speaker 3: Because when you do do it, it will start a
48:33
Speaker 3: new five year waiting period for Medicaid eligibility protection. But
48:39
Speaker 3: only on the new addition.
48:42
Speaker 2: Okay, so a new clock just for that new money.
48:44
Speaker 3: Right, And it's easy to keep track of the clocks
48:47
Speaker 3: because you'll have a statement from the broker or whatever
48:50
Speaker 3: showing the deposit.
48:51
Speaker 4: Right.
48:52
Speaker 3: And so let's say you to make that perfectly clear,
48:56
Speaker 3: let's say you put those two properties and they were
48:59
Speaker 3: worth a million bucks. And five years has gone by, yep,
49:03
Speaker 3: And now you add money, the two properties are already protected.
49:10
Speaker 3: You don't have to worry at all, yep. Just the
49:12
Speaker 3: new five hundred thousand you have to deal with if
49:15
Speaker 3: you get sick in the next five years.
49:19
Speaker 2: What about folks that you know, maybe they're not taking
49:22
Speaker 2: the income, but maybe they give gifts to their family
49:25
Speaker 2: every year. Can they still gift if they put their
49:28
Speaker 2: investment portfolio into or their bank accounts or whatever they're
49:32
Speaker 2: putting into the trust. Are they still able to do
49:35
Speaker 2: those annual gifts to their family if they've put it
49:38
Speaker 2: into the trust, or should they hold money back to
49:41
Speaker 2: do their gifting.
49:42
Speaker 3: So remember, these trusts are designed to cause the assets
49:47
Speaker 3: to be included in the estate when you die, so
49:50
Speaker 3: we're not gifting anything out of the estate, which is
49:53
Speaker 3: exactly what we want. So if I'm going to make
49:57
Speaker 3: gifts just because I want to, I would probably advise
50:01
Speaker 3: gifting from the assets in the trust already in the
50:05
Speaker 3: trust right, and it'd be great if it was after
50:07
Speaker 3: five years. But it doesn't create a new five year
50:09
Speaker 3: waiting period when you gift out to the kids. But
50:11
Speaker 3: it would if you reached into your eye run and
50:13
Speaker 3: gave it to the kids, then you have a new
50:15
Speaker 3: five year waiting period even though you didn't add it
50:18
Speaker 3: to the trust. But I think that's a great distinction
50:20
Speaker 3: you're making between the trust and otherwise you mean putting
50:23
Speaker 3: it in the trust versus giving it outright to kids. Folks.
50:27
Speaker 3: Those are just a few of the dos and don'ts
50:29
Speaker 3: that you will learn when you get this guy the
50:32
Speaker 3: power of irrevocable Medicaid Trust unlocking all the doues and
50:36
Speaker 3: don'ts for you. Please call and get it eight six
50:38
Speaker 3: six eight four eight five six nine nine or Legal
50:42
Speaker 3: Exchange show dot com.
50:44
Speaker 2: Todd Letsky from the law firm of Cushing and Dolan,
50:46
Speaker 2: thank you so much.
50:47
Speaker 3: Thank you, Susan, always a pleasure.
50:49
Speaker 2: I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
50:53
Speaker 2: We thank you for joining us today and we'll be
50:55
Speaker 2: back again next week on the Legal Exchange with Todd Leutski.
51:00
Speaker 1: Elder life planning can be overwhelming, so be sure you're
51:03
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51:49
Speaker 1: The proceeding was paid for and the views expressed are
51:50
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51:53
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51:56
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51:58
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Speaker 6: Preparing for retirement is a time consuming and challenging process.
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Speaker 4: HI.
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Speaker 6: This is Mike Armstrong from the Armstrong Advisory Group, and
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52:45
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
52:47
Speaker 1: registered investment advisor. Nothing in the ad or in any
52:50
Speaker 1: Armstrong guide is specific financial, legal or tax advice. Consult
52:53
Speaker 1: your own financial, tax, and estate planning advisors before making
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