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How Trust Language Can Prevent Family Fights Over Real Estate · The Legal Exchange

0:01
Speaker 1: This is the Legal Exchange with Todd Lutsky from the
0:04
Speaker 1: law firm of Cushing and Dolan and Susan Powers of
0:07
Speaker 1: the Armstrong Advisory Group. Each week, Todd and Susan will
0:10
Speaker 1: discuss many topics, including estate planning, how to avoid probate,
0:13
Speaker 1: and protecting your money from a nursing home. If you
0:16
Speaker 1: need assistance in any of these areas, or have a
0:18
Speaker 1: question about another issue that may affect your future, call
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Speaker 1: eight six six eight four eight five six ninety nine
0:24
Speaker 1: to make an appointment. That's eight sixty six eight four
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Speaker 1: eight five six ninety nine. Operators are standing by. Now
0:31
Speaker 1: Here are your hosts, Tod Lutsky and Susan Powers.
0:37
Speaker 2: Welcome into the Legal Exchange with Todd Lutsky. I'm Susan Powers,
0:40
Speaker 2: a financial advisor with the Armstrong Advisory Group, and I'm
0:43
Speaker 2: joined by Todd Lutsky, a partner with the law firm
0:46
Speaker 2: of Cushing and Dolan with a master's in taxation. Welcome Todd,
0:50
Speaker 2: How are.
0:51
Speaker 3: You never better? Susan? How are you?
0:54
Speaker 2: I'm great? Thank you what you have for us This week.
0:56
Speaker 3: I have a couple of cases, one out of Hampshire
1:01
Speaker 3: and one out of Connecticut. First one is you know
1:06
Speaker 3: basically how to handle real estate. Right, So in a
1:10
Speaker 3: case like this, there was property put in a trust,
1:12
Speaker 3: but how they ended up trying to divide the trust
1:15
Speaker 3: assets when it came to real estate caused all the problems.
1:19
Speaker 3: And so we're going to show you how we do
1:21
Speaker 3: it to sort of fix that problem. And it actually
1:24
Speaker 3: led me into a real life story that I had
1:26
Speaker 3: just the other day on a situation where I used
1:29
Speaker 3: our Cushing and Dolean language and as a solution to
1:33
Speaker 3: this family and how to deal with real estate. Even
1:36
Speaker 3: though they had a trust worked great, but had a
1:38
Speaker 3: couple of glitches. So everybody has real estate. We want
1:41
Speaker 3: to learn how to deal with real estate when you're
1:43
Speaker 3: giving it away. Then we flip over to Connecticut and
1:45
Speaker 3: this is a situation where it's like there was no
1:49
Speaker 3: planning done, not even a will, and again, please do
1:51
Speaker 3: a will if you're not going to do anything else.
1:52
Speaker 3: We're going to learn from this because you need to
1:55
Speaker 3: know who's in and who's out, and when you have
1:58
Speaker 3: the intestate successions you to apply. Sometimes you don't know
2:01
Speaker 3: who that is, like in this case where one of
2:05
Speaker 3: the participants said I wasn't listed, but I should have
2:09
Speaker 3: been listed, but clearly this person was born out of
2:12
Speaker 3: wedlock and we have all kinds of problems, and it
2:15
Speaker 3: was the male who died, so you're going to have
2:18
Speaker 3: issues here. And again Christian Dolan has language that actually
2:23
Speaker 3: prevent this kind of thing from happening. So I'm going
2:27
Speaker 3: to share with you that which I that's actually a
2:29
Speaker 3: very interesting case. So lots of talk about today, and
2:33
Speaker 3: of course always we are approaching, getting closer and closer
2:38
Speaker 3: to the end of the month, folks. It's the last
2:40
Speaker 3: minute Medicaid eligibility guide. You know, we do all we
2:44
Speaker 3: talk about all these cases with all this planning involved,
2:47
Speaker 3: but you know, at the end of the day, you
2:49
Speaker 3: might find yourself suddenly in a nursing home. You don't
2:53
Speaker 3: always plan for that, and something happens and you're in.
2:55
Speaker 3: And so for people who have done their planning and
2:57
Speaker 3: have protected assets, they're still going to be assets that
3:00
Speaker 3: need to be dealt with. And for people who haven't,
3:03
Speaker 3: of course, this guide is great because it really shows us,
3:05
Speaker 3: you know, what's countable, what's non countable. It explains to
3:10
Speaker 3: you how to deal with, you know, certain assets like
3:14
Speaker 3: homes and vacation homes and rentals, and things like that,
3:18
Speaker 3: so they're all treated differently whether you're married or single.
3:21
Speaker 3: So very important that you understand. Don't just write the check,
3:26
Speaker 3: call and learn what you can do last minute if
3:28
Speaker 3: you're faced with these things eight six six eight four
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Speaker 3: eight five six nine nine or Legal Exchange Show dot
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Speaker 3: com again eight six six eight four eight five six
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Speaker 3: nine nine or Legal Exchange Show dot com and you
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Speaker 3: can download it there and always go to Cushing dolein
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Speaker 3: PC on our Instagram page for more New Hampshire's head there.
3:52
Speaker 3: So in this case we have Pam Moffett who died
3:57
Speaker 3: in twenty twenty one, and Pam's trust directed that the
4:02
Speaker 3: assets to be distributed equally to her three kids and
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Speaker 3: appointed Nathaniel as successor trustee. Well Nate in twenty twenty three.
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Speaker 3: Two years later filed an action to petition to partition
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Speaker 3: the two properties to adjacent properties thirty three and thirty
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Speaker 3: four King's Highway. Thirty four apparently had always been in
4:27
Speaker 3: the family, used as a summer home by the Mothat parents. Okay,
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Speaker 3: well Nate. Apparently on thirty three Nate had purchased thirty
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Speaker 3: three King's Highway on Pam's behalf Pam's the one who
4:44
Speaker 3: died on Pam's behalf. That's as weird. Using Pam's trust
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Speaker 3: money to buy it, that's interesting. Nate and his wife
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Speaker 3: moved in and then they used more money from the
4:58
Speaker 3: trust to renovate property.
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Speaker 2: Seems a little bit self serving.
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Speaker 3: Yes, yeah, so, needless to say, the petition he asked,
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Speaker 3: and he petitioned the court and asked the court to
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Speaker 3: grant him thirty three and sell thirty four because you know,
5:14
Speaker 3: he bought thirty three. Okay. So Sarah, on the other hand,
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Speaker 3: moved to dismiss the petition and said Nate breached his
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Speaker 3: fiduciary duty and altered and alternatively not just so, he
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Speaker 3: breaches fiduciary duty and alternatively wanted to award thirty four
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Speaker 3: Kings Highway to her. Well, the probate court didn't did
5:36
Speaker 3: ultimately award thirty four to Sarah, yeah, and thirty three
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Speaker 3: to Nate, but they also found that he did breach
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Speaker 3: his fiduciary duty by not distributing out thirty four to
5:47
Speaker 3: Sarah and by living there without paying rent. And the
5:51
Speaker 3: court ordered him to pay you know, repay the trust
5:55
Speaker 3: for the money the fees associated with the costs of litigation,
5:59
Speaker 3: et cetera. Well, he appealed, of course he did. Yeah,
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Speaker 3: and both the appellate court and the Supreme Court did
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Speaker 3: affirm the probate court and said, no, there was no
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Speaker 3: really reason to not distribute the property out. So you know,
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Speaker 3: we're going to affirm this. And none of the siblings
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Speaker 3: at the time really wanted this other property, and the
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Speaker 3: trust did have enough money to offset the apportionment of
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Speaker 3: the property to the other beneficiaries, so they let that go.
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Speaker 3: But they did affirm his breach of his fiduciary duty.
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Speaker 3: There's a lot going on here, a lot, folks. At
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Speaker 3: the end of the day that the point here is
6:37
Speaker 3: that how do we better deal with real estate in
6:39
Speaker 3: a trust? Now, they had a trust here, and it
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Speaker 3: seemingly worked. It kept everything out of probate, and it
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Speaker 3: did provide ultimately for the disposition of the property, you know,
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Speaker 3: according to their wishes. I think I didn't have it obviously,
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Speaker 3: we didn't have the trust to read. You know, there's
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Speaker 3: some problems that did arise. But you know, you know,
6:57
Speaker 3: maybe if you put another trustee on and you required
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Speaker 3: a majority vote, maybe there would have been a little
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Speaker 3: more right protection here. You know, however, the trust did
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Speaker 3: you know, at the end of the day allow for
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Speaker 3: a direct payment. So I'm I'm a little confused as
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Speaker 3: to how the trustee just didn't make this payment out
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Speaker 3: right It said it should have come out of the trust.
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Speaker 3: So at this point they just kept living there. And
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Speaker 3: it's very strange to me that no one really objected
7:26
Speaker 3: pushed back on it. Yeah, to them living there, I mean,
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Speaker 3: that's the whole point.
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Speaker 2: And you have money to fix it up to get
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Speaker 2: it just like they want it.
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Speaker 3: Folks, what's our trust language? And it kind of relays
7:37
Speaker 3: me to this real life story at the same time,
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Speaker 3: where this family came in have this house on the
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Speaker 3: cape and that they have. She's single now and widowed
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Speaker 3: and three kids, and I want to make sure my
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Speaker 3: three kids get it and it stays in the bloodline.
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Speaker 3: It's been in the family for years and years, and
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Speaker 3: I want to keep it that way.
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Speaker 2: Which is a warm feeling it is, however.
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Speaker 3: And I'm like, I like that you want to keep
7:56
Speaker 3: it that way, But two of your kids are in California,
7:58
Speaker 3: one's here, and it's very possible that they're not all
8:02
Speaker 3: going to want what you want. And we can't really
8:04
Speaker 3: force that issue, but we also don't want any hard feelings.
8:08
Speaker 3: And the other the daughter that was there, said same thing.
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Speaker 3: I just want to keep it, you know. I don't
8:13
Speaker 3: want them to not like me, but I need to
8:15
Speaker 3: live there. But I don't want to have exclusive right
8:17
Speaker 3: to live there, because then they're going to feel bad,
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Speaker 3: and it's on and on, and so I said, look,
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Speaker 3: we have language and the trust that I think will
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Speaker 3: work here as it works for many people. Right, we
8:27
Speaker 3: force the sale unless all of you want it. See,
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Speaker 3: so now when you die, we can just ask all
8:33
Speaker 3: three and say, hey, what do you want If your
8:36
Speaker 3: head is still in the game like it is now
8:38
Speaker 3: and you really want to live there and share it,
8:40
Speaker 3: we'll put it in your three buckets. Not only will
8:43
Speaker 3: we put it in your three buckets, we'll divorce proof
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Speaker 3: those buckets and keep it in the family so when
8:47
Speaker 3: you pass away, it'll get to the grandkids, which is
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Speaker 3: what mom wanted. Keep it in the bloodline as long
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Speaker 3: as possible, So we'll put the protection language in there.
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Speaker 2: What if only one of them wants it?
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Speaker 3: Though, And that's really why I think that one daughter
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Speaker 3: was saying, you know, I want to make sure that
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Speaker 3: I don't want to force people, but I don't want
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Speaker 3: to feel like I'm the exclusive owner. Hey, someone's out
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Speaker 3: in California, says, I don't want the headaches, the liabilities.
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Speaker 3: I just want my money. Well, then the two of
9:11
Speaker 3: you that do want it can buy out only the
9:14
Speaker 3: interest of the one who doesn't. Right, So it's not
9:18
Speaker 3: as much money to come up with. Yet it gave
9:21
Speaker 3: everybody an opportunity, an equal opportunity to either keep it
9:27
Speaker 3: or not and not be treated unequally. She's like, well,
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Speaker 3: this will, this should work. So we had to basically
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Speaker 3: put this together, and that's what we're doing. It seems
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Speaker 3: to it happens and would have happened. It would have
9:40
Speaker 3: been better if they did that in this case. So, folks,
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Speaker 3: that's the kind of language that needs to be in
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Speaker 3: your trust when you're dealing with real estate. Now, great planning,
9:52
Speaker 3: but again we run into these situations last minute where
9:55
Speaker 3: someone ends up in a nursing home. And I want
9:57
Speaker 3: you to get the guide last minute Medicaid eligibility guide
10:00
Speaker 3: as to how to protect assets that are not yet
10:03
Speaker 3: protected last minute. Some are accountable, some are non countable.
10:06
Speaker 3: Treated differently for married versus single people. Don't just write
10:10
Speaker 3: the check. Get the guide eight six six eight four
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Speaker 3: eight five six ninety nine or Legal Exchange show dot
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10:20
Speaker 2: You've been listening to Todd Lutsky, a partner with the
10:23
Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
10:26
Speaker 2: financial advice with the Armstrong Advisory Group. We've got much
10:30
Speaker 2: more to come when we return to the Legal Exchange
10:33
Speaker 2: with Todd Lutsky.
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Speaker 2: Welcome back into the Legal Exchange with Todd Ltsky. 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 Lotsky, a partner with the
14:00
Speaker 2: law firm of Cushing and Dolan with a master's in taxation. Todd,
14:05
Speaker 2: where are we headed now?
14:07
Speaker 3: Connecticut? Okay, short trip, Let's head over there. So this
14:10
Speaker 3: is again the comment. The headline would be, please let
14:14
Speaker 3: us know who's in and who's out right. So in
14:19
Speaker 3: this case, Mark died in May of twenty twenty three.
14:24
Speaker 3: He died without a will and his daughter, Marika filed
14:29
Speaker 3: for an administration, which is what you do when you
14:31
Speaker 3: don't have a will, and a letter was appointing her
14:35
Speaker 3: as administrator was present, was prepared by the court. Well,
14:40
Speaker 3: Jamar Smith, so this was Mark Morrell, just so you
14:45
Speaker 3: know who died. But Jamar Smith filed a motion to
14:50
Speaker 3: remove Marika as administrator because she failed to disclose that
14:55
Speaker 3: Jamar was a biological child of Mark. This is therefore
15:02
Speaker 3: an heir to the estate. Well, the Probate Court removed
15:08
Speaker 3: Marika and appointed attorney Peter Barry. Wherever that is Marika appeared.
15:15
Speaker 3: Marika appealed, appealed and argued that the Probate Court did
15:21
Speaker 3: not apply the correct standard in determining when Jamar was
15:26
Speaker 3: Mark Sun or not determining whether or not this was
15:29
Speaker 3: Mark son. They didnt apply the right standard. Well, the
15:31
Speaker 3: Superior Court, after a full evidentiary hearing, which by the way,
15:35
Speaker 3: included evidence of a child support judgment against Mark regarding
15:41
Speaker 3: Jamar and wage withholding judgment against Mark for child support
15:47
Speaker 3: for Jamar, the Court affirmed that the Probate Court's decision
15:52
Speaker 3: sounds accurate. Sounds accurate that I'm pretty sure they used
15:55
Speaker 3: the right standard to find out that Jamar was a
15:58
Speaker 3: child of Mark.
16:00
Speaker 2: If you have a child, illegitimate or not, you would
16:04
Speaker 2: think in that case you would do some estate planning.
16:08
Speaker 3: Well, Marika I didn't like that decision, so she appealed.
16:10
Speaker 3: Of course she did, and of course the appellate court
16:13
Speaker 3: affirmed as basically saying that, look, when you have judgments
16:17
Speaker 3: against Mark for child support, those were sufficient to establish
16:22
Speaker 3: that Mark was a child of this person. I'm sorry
16:27
Speaker 3: that Jamar was a child of Mark. Mar Okay, So
16:32
Speaker 3: now we proved all that out right, There's a lot
16:35
Speaker 3: to think about in this case. Right, so you know,
16:38
Speaker 3: first of all, no will why do you plan? I
16:43
Speaker 3: mean you obviously I don't know if it's a second
16:45
Speaker 3: marriage or a second relationship here, but somehow you have
16:49
Speaker 3: a daughter with somebody, and so you would think that
16:54
Speaker 3: you would do some planning at least at least then.
16:58
Speaker 3: But folks, before I get to the solutions and what
17:01
Speaker 3: we can learn, just take a minute and remember the
17:05
Speaker 3: guide we're giving away. In this case, there was bad planning. Well,
17:07
Speaker 3: sometimes there's no planning and you enter a nursing home
17:10
Speaker 3: and you need to know how to handle assets like
17:12
Speaker 3: rental properties. What about vacation homes, what about a primary residence?
17:17
Speaker 3: What about life insurance, whole life versus term life? You know?
17:21
Speaker 3: What about you know IRA assets? Folks, These are all
17:25
Speaker 3: treated differently. Some are accountable, some are non countable, and
17:28
Speaker 3: you can learn how to make the non the accountable
17:31
Speaker 3: non countable last minute and not write a check to
17:34
Speaker 3: the nursing home. So, whether you've done planning or not,
17:38
Speaker 3: this guide is for you because there's always going to
17:40
Speaker 3: be assets that are remaining at risk when you're faced
17:43
Speaker 3: with entering a facility call and get it eight six
17:46
Speaker 3: six eight four eight five six nine nine or Legal
17:50
Speaker 3: Exchange show dot com again eight six six eight four
17:54
Speaker 3: eight five six nine nine or Legal Exchange Show dot com.
17:58
Speaker 3: And a can always go to Cushing go and PC
18:01
Speaker 3: on our Instagram page for more information. Okay, let's let's
18:07
Speaker 3: settle in here and see what we can do. Folks,
18:10
Speaker 3: second marriages or second relationships, I don't even know, right,
18:15
Speaker 3: So when you have this, you need to do planning.
18:18
Speaker 3: It's really most important because if you want to ensure
18:22
Speaker 3: where your assets go, do some planning, like in this case, right,
18:27
Speaker 3: even if you had just done a will right and
18:31
Speaker 3: named who you wanted included and who you wanted to
18:35
Speaker 3: be out. That would have worked. That would have solved
18:39
Speaker 3: this whole litigation problem right now. It may not have
18:42
Speaker 3: avoided probate or sheltered assets from a state taxes, but
18:46
Speaker 3: at least your wishes would have been honored.
18:49
Speaker 1: Ye.
18:49
Speaker 3: So, like I say, a will's kind of a won't.
18:52
Speaker 3: But if you're going to do no planning, at least
18:55
Speaker 3: do that.
18:56
Speaker 2: Because if he didn't have a relationship with what was
18:59
Speaker 2: his name, Jamika.
19:00
Speaker 3: Jim Marika, Marika, Jamar, the child Jamar was the child
19:06
Speaker 3: that was Yeah.
19:07
Speaker 2: So if he didn't have a relationship with Jamar and
19:09
Speaker 2: he did his estate planning, even just a basic will,
19:13
Speaker 2: he could he could have excluded him, right, I mean,
19:17
Speaker 2: you don't have to include your child biological or not.
19:20
Speaker 3: Yeah, that very next thing I was going to talk about,
19:23
Speaker 3: I go, never mind that the will is just a will,
19:25
Speaker 3: it's a won't it does at least this in the will,
19:28
Speaker 3: you could have simply added what is it called as
19:30
Speaker 3: you were referring to it, susan a no contest clause,
19:33
Speaker 3: so that even if somebody was to contest, they would
19:37
Speaker 3: be out. So this would keep somebody like Jamaru. But
19:41
Speaker 3: in your case, you could take it one step further
19:43
Speaker 3: and actually specifically exclude Jamar to make it more clear,
19:48
Speaker 3: and add a no contest clause. So I think you
19:50
Speaker 3: need you need both here so that you would be
19:53
Speaker 3: able to provide protection. Now, of course, having a trust
19:57
Speaker 3: might have even added some more protection here, because at
20:00
Speaker 3: least it would have been outside of probate, a little
20:02
Speaker 3: harder to bring a battle against it and so forth.
20:05
Speaker 3: But I told you that Chrishiing and Dolan offers language
20:08
Speaker 3: that might have actually protect this. It's in every trust
20:12
Speaker 3: that we do because you don't know about these things, right.
20:16
Speaker 3: So let's say it is possible that this was a
20:21
Speaker 3: child born out of wedlock. I would think so since
20:26
Speaker 3: different last name number one, clearly child support wasn't being paid.
20:32
Speaker 3: It appeared that you had no custody. I'm guessing that
20:36
Speaker 3: this person was probably born out of wedlock, which is
20:41
Speaker 3: not uncommon, right, I've got last names different, So if
20:44
Speaker 3: that's the case. You know, we add language in our
20:48
Speaker 3: trust all the time, in our definition section because people
20:51
Speaker 3: always say, you know, how come you didn't you know
20:55
Speaker 3: name all the children or the grandchildren. Because we use
20:58
Speaker 3: words like child issue descendants. It captures a term of
21:04
Speaker 3: art in the legal world all these people. But in
21:08
Speaker 3: our case, we have language that states a child born
21:12
Speaker 3: out of wedlock is deemed the child of the mother
21:16
Speaker 3: only unless they get married or I guess you could
21:23
Speaker 3: do a paternity prove paternity.
21:25
Speaker 2: Well, if you wanted to specifically include them, you could.
21:28
Speaker 3: You could, But this language is a default language in
21:31
Speaker 3: our sens to protect against this kind of thing. Again,
21:35
Speaker 3: it wouldn't necessarily been in a will, but with our
21:37
Speaker 3: trust when you're doing your planning, we have that language
21:40
Speaker 3: in there because it's possible that a man could have
21:44
Speaker 3: a child and maybe even not know it right, meaning
21:47
Speaker 3: you could have been with somebody and and later on
21:51
Speaker 3: this person you know, says, oh no.
21:53
Speaker 2: You daddy Warbucks died, It's time for me to yes family.
21:56
Speaker 3: So this language at least provides, you know, some protection. Yeah,
22:01
Speaker 3: best practice though really you know, define your beneficiaries like
22:05
Speaker 3: you know we use child children issue. They're defined. But
22:09
Speaker 3: if you want somebody to be out be very clear
22:13
Speaker 3: about it, we can put it in there. Another example is,
22:16
Speaker 3: as you said, we can include people. So like with
22:19
Speaker 3: second marriages, our second relationships, which is what we're talking
22:22
Speaker 3: about here, we have situations where when I meet them
22:25
Speaker 3: and I say, you got two kids? You got two kids?
22:29
Speaker 3: Do you feel like you have four children?
22:31
Speaker 1: Oh?
22:31
Speaker 3: Yeah, we've been together thirty years, blah blah blah, we
22:33
Speaker 3: feel like we raise them. Then we put language in
22:35
Speaker 3: that says the word child children and issue will mean
22:40
Speaker 3: would be done regardless of parentage. So we don't you
22:45
Speaker 3: just define it in there to say regardless of parentage,
22:47
Speaker 3: they're the children of each other equal and so now
22:51
Speaker 3: by using the word child children an issue, you will
22:54
Speaker 3: capture them, but you won't capture step children that way.
22:58
Speaker 3: So be careful with step child and you need to
23:00
Speaker 3: figure out how to take care of them or define
23:03
Speaker 3: them in there. So lots to learn when you're planning,
23:06
Speaker 3: and it's all about drafting. And sometimes folks, when you
23:08
Speaker 3: get sick and you go to the nursing home, just
23:10
Speaker 3: want to remind you Last minute to Medicaid Eligibility Guide,
23:14
Speaker 3: help you not write the check, learn what how you
23:18
Speaker 3: can make countable assets non countable Last minute eight six
23:22
Speaker 3: six eight four eight five six nine nine, or Legal
23:26
Speaker 3: Exchange show dot com again eight six six eight four
23:29
Speaker 3: eight five six nine nine, or go to Legal Exchange
23:33
Speaker 3: Show dot com and download it right there.
23:36
Speaker 2: You've been listening to Todd Ltski, a partner with the
23:38
Speaker 2: law firm of Cushing and Dolan. I'm Susan Powers, a
23:41
Speaker 2: financial advisor with the Armstrong Advisory Group, and Todd will
23:45
Speaker 2: be answering your listener questions when we return to the
23:48
Speaker 2: legal exchange with Todd Lutsky.
23:51
Speaker 1: One day you're living in your own home, the next
23:55
Speaker 1: you can't return home after rehab. Now you're faced with
23:58
Speaker 1: a nursing home bill of more than fourteen teen thousand
24:00
Speaker 1: dollars a month and wondering how you're gonna pay for it.
24:04
Speaker 1: These situations can occur without warning, but Cushing and Dolan
24:07
Speaker 1: can help before you make any major decisions. Get the facts.
24:12
Speaker 1: Cushing and Dolan's new guide, Last Minute Medicaid Eligibility explains
24:15
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24:19
Speaker 1: be at risk, and why the first answer you receive
24:21
Speaker 1: isn't always your only option. Call right now eight six
24:25
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24:27
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24:31
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24:34
Speaker 1: or you can request the guide online at Legal Exchange
24:36
Speaker 1: Show dot com. That's Legal exchange Show dot com. The
24:40
Speaker 1: proceeding is paid for and the views expressed are solely
24:42
Speaker 1: those of Cushing and Dolan. Cushing and Dolan into Armstrong
24:44
Speaker 1: Advisory may contact you offering legal or investment services. Cushing
24:48
Speaker 1: and Dolan and Armstrong Advisory do not endorse each other
24:50
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24:52
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25:38
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:40
Speaker 1: registered investment advisor. Nothing in the ad or in any
25:42
Speaker 1: Armstrong Guide a specific financial, legal or tax advice. Consult
25:45
Speaker 1: your own financial, tax, and estate planning advisors before making
25:48
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
25:51
Speaker 1: advisory services. A nursing home stake can cost more than
25:53
Speaker 1: fourteen thousand dollars a month before you assume you have
25:56
Speaker 1: to spend everything to qualify for Metigaid. Get the facts
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26:04
Speaker 1: guide Last Minute Medicaid Eligibility that's eight six six eight
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Speaker 1: four eight five six ninet nine, or requested online at
26:10
Speaker 1: Legal exchange Show dot com. The proceeding was paid for
26:12
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26:15
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26:17
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26:20
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26:52
Speaker 1: You're listening to the Legal Exchange, and it's time for
26:56
Speaker 1: Ask Todd, the segment where Todd will answer your questions
26:59
Speaker 1: about anything and everything that's included in the estate planning process.
27:03
Speaker 1: Once again, here's Todd Lutsky and Susan Powers.
27:08
Speaker 2: Welcome back, Todd. We've a few questions from listeners for you.
27:11
Speaker 2: First question comes from Kristin and Middleborough, mass And Kristen writes,
27:15
Speaker 2: my mother is currently an assisted living and needs to
27:18
Speaker 2: step up to a higher level of care. Around ten
27:21
Speaker 2: years ago, she created an irrevocable trust that does not
27:25
Speaker 2: provide any access to income or principle for her. Does
27:29
Speaker 2: that mean the assets in her trust would be protected
27:32
Speaker 2: from the nursing home and would she be eligible for medicaid?
27:35
Speaker 2: She is a small amount of assets outside of the trust,
27:38
Speaker 2: maybe fifty thousand dollars.
27:41
Speaker 3: So the first thing I want to say is when
27:43
Speaker 3: I made that little comment, I think whoever drafted the
27:46
Speaker 3: trust made it too restrictive. Okay, how come you don't
27:51
Speaker 3: need to provide no access to principle and income and income?
27:56
Speaker 3: I mean, I don't know that I would ever do that, right.
27:58
Speaker 3: I mean, if someone tells me I'm going to put
28:00
Speaker 3: my investment portfolio in the trust, I'm going to want
28:02
Speaker 3: my interest and dividends, yep. I'm going to want to
28:05
Speaker 3: live on my income. So preventing income is overkill. And so, folks,
28:13
Speaker 3: I just I know that wasn't the question, Susan, but
28:16
Speaker 3: I felt like, you know, I need you to understand
28:18
Speaker 3: that the trust that we talk about all the time
28:21
Speaker 3: on the show when it comes to nursing, home planning
28:24
Speaker 3: and irrevocable type trust versus revocable trusts are not this way.
28:30
Speaker 3: You have way more control and way more access to
28:32
Speaker 3: assets than you do with this tra.
28:35
Speaker 2: And you can get all the income, which is control
28:37
Speaker 2: a lot of.
28:37
Speaker 3: People, unbelievable income, rent, interest, dividends. It could be a
28:41
Speaker 3: rental property you could sell and move, You could buy property, folks.
28:45
Speaker 3: You have a lot of control that isn't what you
28:49
Speaker 3: ask me though, Is it protected? Well? Yeah, they overkill
28:53
Speaker 3: so yeah, even more is protected here. The problem I
28:57
Speaker 3: also have with this no access to income is who's
28:59
Speaker 3: paying the income tax on this growth every year? Right?
29:05
Speaker 3: Or capital gains tax every year? I guess the trust is.
29:10
Speaker 3: I mean, I suppose you could make it a grand
29:13
Speaker 3: or trust and have no right to income or principle
29:16
Speaker 3: and still have it picked up on your tax return.
29:17
Speaker 3: But I don't know. I have to say if they
29:20
Speaker 3: you know, if they drafted it that way, but setting
29:23
Speaker 3: out aside, yes, this would be protected provided again it
29:26
Speaker 3: was done. Look at the next fact pattern in here, folks,
29:28
Speaker 3: it said ten years ago. That's important because there's this
29:32
Speaker 3: five year waiting period, so you always need to make
29:35
Speaker 3: sure you're beyond that. So we're beyond that. You need
29:38
Speaker 3: to make sure the trust has language in it that
29:40
Speaker 3: says you have no direct access to the principle and
29:44
Speaker 3: therefore if you can't get it, the nursing home can't
29:47
Speaker 3: get it. So we've got that, We've got the five years.
29:50
Speaker 3: So yeah, I'm going to say that the assets in
29:52
Speaker 3: this trust without reading it right of course are protected,
29:58
Speaker 3: are protected again, provided it hasn't had any other bad language, Yeah, yeah,
30:02
Speaker 3: somewhere else.
30:03
Speaker 2: So now she also has around fifty thousand outside of
30:07
Speaker 2: her trust. And you've taught taught us all. As a
30:10
Speaker 2: single person, she can only have two grand. What do
30:12
Speaker 2: you do with the other forty eight thousand?
30:14
Speaker 3: So as a single person, you're absolutely right, she only
30:16
Speaker 3: has two grands. So now she's got forty eight grand
30:18
Speaker 3: that we have to deal with, and no.
30:20
Speaker 2: House because she's living in assisted living.
30:22
Speaker 3: Just that, so we've got no house. So and do
30:25
Speaker 3: we know how old she is or not? Really, we
30:27
Speaker 3: can make up an age.
30:29
Speaker 2: Say she's seventy five, so let's make her eighty. Okay,
30:33
Speaker 2: let's make her eighty.
30:34
Speaker 3: You'd be a little older. So let's say she's eighty.
30:37
Speaker 3: I mean, at this point, with forty five forty eight
30:40
Speaker 3: thousand dollars, she could prepay a funeral. I mean that
30:43
Speaker 3: could be ten grand, sure, twelve grand. There's no limits.
30:46
Speaker 3: So you go get a funeral contract and you pay that,
30:48
Speaker 3: and so that brings it down a little. I mean,
30:50
Speaker 3: the amount that's left isn't really large, but there are
30:53
Speaker 3: some options. If you're only eighty, we probably can stay
30:57
Speaker 3: away from the pooled trust option, I think you could
31:00
Speaker 3: probably go right to the annuity.
31:02
Speaker 2: Because it's a small amount of money.
31:03
Speaker 3: Yeah, I mean, you could private pay for a month
31:06
Speaker 3: and be done with it. But the only thing she
31:08
Speaker 3: could really spend it on of any significance would be
31:10
Speaker 3: the funeral home. I mean, that's a big, big chunk. Well,
31:14
Speaker 3: then there's going to be some legal fees to apply
31:16
Speaker 3: for medica so there may not be a ton of
31:19
Speaker 3: money left after you do all of these things. But
31:22
Speaker 3: whatever amount is left, So even if it was thirty
31:25
Speaker 3: grand or whatever, if you want to try to save it,
31:28
Speaker 3: you simply would have to buy one of these Medicaid
31:31
Speaker 3: annuities and convert this to an income stream, and then
31:37
Speaker 3: that money would come to her on a monthly basis
31:39
Speaker 3: over her lifetime. Based on an eighty year old, it's
31:42
Speaker 3: probably got to be ten years, and at that point,
31:47
Speaker 3: you know, she would immediately be eligible for Medicaid. Okay,
31:51
Speaker 3: but you still have to go through the planning. You
31:52
Speaker 3: still have to go through the application process and prove
31:55
Speaker 3: all this to the state. But folks, that's exactly one
31:58
Speaker 3: of the things that are in this guide, this last
32:00
Speaker 3: Minute Medicaid Eligibility Guide. I was talking to you about
32:04
Speaker 3: I know, a home, a rental property of vacation home.
32:08
Speaker 3: But what about as you said, susann excess money?
32:11
Speaker 2: Right?
32:11
Speaker 3: I just got too much money? What do I do
32:14
Speaker 3: with that? Well? One of the examples in here is
32:17
Speaker 3: for a single person and married couples to buy an annuity.
32:21
Speaker 3: How does that work? How do you? What are the
32:23
Speaker 3: terms of the annuity? What are the rules around the annuity?
32:26
Speaker 3: Call and get the guide and learn how to convert
32:29
Speaker 3: these assets from an income stream or from an asset
32:33
Speaker 3: to an income stream, thereby making the individual eligible for Medicaid.
32:37
Speaker 3: There's many other reasons to get the guide in terms
32:40
Speaker 3: of just not writing this check last minute when you're
32:43
Speaker 3: applying for UH, when you're going into a nursing home
32:47
Speaker 3: eight six six eight four eight five six nine nine,
32:51
Speaker 3: or legal Exchange show dot com again eight six six
32:55
Speaker 3: eight four eight five six nine nine or Legal Exchange
32:59
Speaker 3: Show dot com. You can download it there and always
33:01
Speaker 3: can go to Cushing Dole and pcr Instagram page for more.
33:05
Speaker 2: Okay, last question comes from Paul in Marshfield, Mass and
33:08
Speaker 2: Paul writes, I have an irrevocable trust that you created
33:12
Speaker 2: for me years ago and transferred my home and my
33:15
Speaker 2: rental property into it. Yeah, I've decided that I no
33:18
Speaker 2: longer want to be a landlord. What is the process
33:21
Speaker 2: now if I want to sell the rental property? How
33:24
Speaker 2: is it taxed? What happens to the proceeds?
33:26
Speaker 3: A lot of questions here, so and I think.
33:29
Speaker 2: You probably have a lot of answers.
33:32
Speaker 3: I learned this. That was my second try, so I'm
33:35
Speaker 3: always better on my second tree. So great news, though,
33:39
Speaker 3: I mean, folks, assets protected. He's been living there and
33:42
Speaker 3: joining and collecting the rent just so you know, this
33:44
Speaker 3: is the kind of you know, how unaffected his life
33:47
Speaker 3: has been even though this trust was created. Yep, And
33:52
Speaker 3: now comes the flexibility that goes along with these trusts.
33:55
Speaker 3: What I want to sell my rental property, anytime put
33:58
Speaker 3: it on the market, out will go the property, in
34:01
Speaker 3: will come all the money. There's the proceed question deposited
34:04
Speaker 3: into the bank account.
34:06
Speaker 2: His trustee would sign all that paperwork.
34:08
Speaker 3: Right exactly, So the trustee has to sign the paperwork.
34:11
Speaker 3: No liability. But they're doing this at your direction. You're
34:14
Speaker 3: the one deciding, and if the trustee gives you any lip,
34:17
Speaker 3: you can remove the trustee and put on somebody else.
34:20
Speaker 3: So great point. Susan, you don't need to, you know,
34:25
Speaker 3: get permission, yeah, to sell the property. So more power,
34:29
Speaker 3: more flexibility. Okay, So now the property sold out, went
34:33
Speaker 3: the deed incomes the money. Get your ID number if
34:36
Speaker 3: you don't have one already, although you probably would. Yeah,
34:39
Speaker 3: deposited into the bank account and the trust. Now what
34:42
Speaker 3: well taxes, Oh yeah, you calculated to capital gains tax.
34:46
Speaker 3: Now remember this person didn't die, so the assets that
34:50
Speaker 3: were in the trust have was known as a carryover basis.
34:53
Speaker 3: If they had passed away and the children were selling it, yep,
34:58
Speaker 3: it would have gotten a step up in base. This
35:00
Speaker 3: is eliminating the built in gain that we're now going
35:02
Speaker 3: to talk about. But because they're still alive, we're no
35:05
Speaker 3: worse off. Were exactly the same place that this person
35:09
Speaker 3: would have been had they sold the property without the trust.
35:13
Speaker 3: And so now because it's a grand or trust for
35:17
Speaker 3: income tax purposes, that means that that capital gain will
35:20
Speaker 3: be calculated and reported on a ten to forty one
35:24
Speaker 3: income tax return for the trust. It will pay no tax.
35:29
Speaker 3: It will be picked up on their personal income tax
35:32
Speaker 3: return at their own rates, just like it would have
35:35
Speaker 3: been had they not done the trust. Okay, so now
35:38
Speaker 3: they have to write the check and pay the taxes.
35:40
Speaker 2: A tax neutral no more or less than what he
35:42
Speaker 2: would be if he owned himself.
35:44
Speaker 3: Exactly the same amount of money that there would have
35:46
Speaker 3: been themselves. The only difference, Like I say, if you
35:48
Speaker 3: sold it after death, then you would have had a
35:50
Speaker 3: step up. So proceeds in the trust sell at any
35:53
Speaker 3: time you want, tax at the same level. And last comment,
35:57
Speaker 3: it does not reset the clock for five year waiting
36:01
Speaker 3: purposes because now it's just money and a trust. You
36:04
Speaker 3: didn't put anything new in. You just converted what was
36:08
Speaker 3: already in there from one asset.
36:09
Speaker 2: And he can invest it to replace the income that
36:11
Speaker 2: he was relying on from the rental property.
36:13
Speaker 3: Exactly, good, beautiful folks, that's how they work. Sometimes we
36:18
Speaker 3: have last minute planning. You got to get protect what's
36:20
Speaker 3: not in the trust, or if you've not done planning,
36:23
Speaker 3: protect what's all the assets. You're entering a nursing home
36:26
Speaker 3: last minute get the guide eight six six eight four
36:29
Speaker 3: eight five six nine nine or Legal Exchange show dot
36:33
Speaker 3: com and learn how not to write the check just
36:36
Speaker 3: because you entered the nursing home.
36:37
Speaker 2: If you have a question you'd like to ask Tod
36:40
Speaker 2: visit his website, Legal Exchange Show dot com and click
36:43
Speaker 2: on the ask Tod tab. Maybe I'll be able to
36:45
Speaker 2: read your question on the air, and hopefully his answer
36:48
Speaker 2: will stop you from becoming one of his next real
36:51
Speaker 2: life stories. You've been listening to Todd Lutsky, a partner
36:55
Speaker 2: with the law firm of Cushing and Dolan. I'm Susan Powers,
36:58
Speaker 2: a financial advisor with the Armstrong Advisory Group. We'll be
37:02
Speaker 2: back with more after this quick break on the Legal
37:04
Speaker 2: Exchange with Todd Lutsky.
37:08
Speaker 1: One day you're living in your own home, the next
37:11
Speaker 1: you can't return home after rehab. Now you're faced with
37:14
Speaker 1: a nursing home bill of more than fourteen thousand dollars
37:17
Speaker 1: a month and wondering how you're gonna pay for it.
37:20
Speaker 1: These situations can occur without warning, but Cushing and Dolan
37:23
Speaker 1: can help before you make any major decisions, get the facts.
37:28
Speaker 1: Cushing and Dolan's new guide, Last Minute Medicaid Eligibility explains
37:32
Speaker 1: common misconceptions about Medicaid, what assets may or may not
37:35
Speaker 1: be at risk, and why the first answer you receive
37:38
Speaker 1: isn't always your only option. Call right now eight six
37:41
Speaker 1: six eight four eight five six ninety nine and get
37:44
Speaker 1: you a free copy of Last Minute Medicaid Eligibility that's
37:47
Speaker 1: eight six six eight four eight five six ninety nine.
37:50
Speaker 1: Or you can request the guide online at Legal exchange
37:52
Speaker 1: show dot com. That's legal exchange show dot com. The
37:56
Speaker 1: proceeding is paid for and the views expressed are solely
37:58
Speaker 1: those of Cushing and Dolan. Cushing, Dolan, Into or Armstrong
38:01
Speaker 1: Advisory may contact you offering legal or investment services. Cushing
38:04
Speaker 1: and Dolan and Armstrong Advisory do not endorse each other
38:06
Speaker 1: and are not affiliated.
38:09
Speaker 5: For many Massachusetts veterans, getting to a medical appointment isn't
38:12
Speaker 5: always easy. That's why the Disabled American Veterans Department of
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38:39
Speaker 4: Retirement isn't just one stage of life. It changes over
38:43
Speaker 4: time and your home should change with it. This is
38:45
Speaker 4: Mike Armstrong from the Armstrong Advisory Group. You may have
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39:40
Speaker 1: One day, you're living in your own home, the next
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39:46
Speaker 1: a nursing home bill of more than fourteen thousand dollars
39:49
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39:56
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40:00
Speaker 1: Cushing and Dolan's new guide, Last Minute Medicaid Eligibility explains
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Speaker 1: common misconceptions about Medicaid, what assets may or may not
40:07
Speaker 1: be at risk, and why the first answer you receive
40:10
Speaker 1: isn't always your only option. Call right now eight six
40:13
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Speaker 1: eight six six eight four eight five six ninety nine,
40:22
Speaker 1: or you can request the guide online at Legal Exchange
40:24
Speaker 1: show dot com. That's Legal exchange show dot com. The
40:28
Speaker 1: proceeding was paid for and the views expressed are solely
40:30
Speaker 1: those of Cushing and Dolan. Cushing and Dolan Intoor Armstrong
40:33
Speaker 1: Advisory may contact your offering legal investment services. Cushing and
40:36
Speaker 1: Dolan and Armstrong Advisory do not endorse each other and
40:39
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40:44
Speaker 1: Todd Lutsky. If you are a loved one needs a
40:46
Speaker 1: nursing homestay, call Todd right now at eight six six
40:49
Speaker 1: eight four eight, five six nine nine and let him
40:51
Speaker 1: make sure your assets are protected. That's eight six six
40:55
Speaker 1: eight four eight five six nine nine. Or visit him
40:57
Speaker 1: online at Legal Exchange show dot com.
41:00
Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
41:04
Speaker 2: Susan Power as a financial advisor with the Armstrong Advisory
41:07
Speaker 2: Group and I'm joined, of course with Todd Lutsky, a
41:10
Speaker 2: partner with the law firm of Cushing and Dowan with
41:13
Speaker 2: a master's in taxation. Todd, I want to talk today.
41:16
Speaker 2: We've been we've been covering kind of last minute Medicaid
41:19
Speaker 2: planning all month. I want to talk about what can
41:23
Speaker 2: be a very confusing asset for a lot of people,
41:26
Speaker 2: and that's insurance. Yeah, it's tricky when it comes to
41:30
Speaker 2: your estate planning.
41:31
Speaker 3: Sure, how is insurance and for medicaid planning it?
41:35
Speaker 2: Yeah, and how is it treated in that Medicaid process?
41:38
Speaker 2: How do they treat that asset?
41:40
Speaker 3: So should we break it down into the two types
41:43
Speaker 3: of insurance that they're.
41:44
Speaker 2: Yeah, it's treated differently than I think we have to.
41:47
Speaker 3: It's it's it's not that it's treated differently, but it's
41:51
Speaker 3: because of the kind of insurance it is that causes
41:54
Speaker 3: it to be treated differently.
41:56
Speaker 2: Okay, so let's start with basic term life life plain
42:00
Speaker 2: vanilla term life insurance.
42:02
Speaker 3: And do we want to assume that this insurance is
42:05
Speaker 3: covering the life of the person going in the nursing
42:08
Speaker 3: home or the life of the spouse at home.
42:10
Speaker 2: I would say the person going in.
42:12
Speaker 3: So if it's the person going into the nursing home
42:15
Speaker 3: and it's pure term insurance, it means that there is
42:19
Speaker 3: no cash surrender value. Yes, so there's no value to
42:24
Speaker 3: that asset today, but it might have a million dollar
42:28
Speaker 3: death benefit. Sure. So what you could do then is
42:33
Speaker 3: you could transfer that asset to the change the owner
42:37
Speaker 3: to be and the beneficiary if it's not already to.
42:41
Speaker 2: Be the spouse, the healthy spouse.
42:43
Speaker 3: Transfers between spouses are non disqualifying transfers. It would wouldn't
42:51
Speaker 3: matter if it wasn't, because the disqualification period would be
42:55
Speaker 3: based on the value of what it is you're transferring.
42:58
Speaker 3: In this case, no value because there's no cash surrender value. Yeah, okay,
43:02
Speaker 3: so let's move it over to the spouse. Okay, And
43:06
Speaker 3: now it's not going to be accountable asset anyway because
43:09
Speaker 3: it has no current cash value. But if she wants
43:13
Speaker 3: to preserve the death benefit, she's going to have to
43:17
Speaker 3: come up with a way to continue to make the
43:18
Speaker 3: premium payments.
43:19
Speaker 2: Right in the flip side of that coin, What if
43:24
Speaker 2: it was on the healthy spouse's life, would you have
43:26
Speaker 2: to make changes.
43:27
Speaker 3: To that, No, because the healthy spouse would still likely
43:29
Speaker 3: be the owner. But you might want to make sure
43:31
Speaker 3: the beneficiary is not a spouse.
43:34
Speaker 2: Okay.
43:34
Speaker 3: Yeah, that's a good point, because you know, if you
43:36
Speaker 3: die out of order. I hate when they die out
43:38
Speaker 3: of order, but it happens, it happens. You want that
43:41
Speaker 3: money directed, certainly somewhere else.
43:44
Speaker 2: Okay. And how about if it's whole life and whole
43:46
Speaker 2: life being different than term life because whole life actually
43:49
Speaker 2: has a cash value.
43:51
Speaker 3: Yeah, that's the big difference with whole life now large
43:53
Speaker 3: or small. With whole life, it could be paid up though,
43:57
Speaker 3: so it might be that there's no premium payments. Do
43:59
Speaker 3: it anymore with very comment, which would be great. But
44:04
Speaker 3: either way, it could be a million dollar policy and
44:07
Speaker 3: have one hundred and fifty thousand dollars cash surrender value. Easy. Well, now,
44:12
Speaker 3: if it's on the life of the individual going into
44:16
Speaker 3: the nursing home, it's accountable even if it's not. It's
44:19
Speaker 3: accountable asset either way because you're married. So now I've
44:22
Speaker 3: got to deal with this one hundred and fifty thousand
44:24
Speaker 3: dollars cash surrender value. Well, I don't want to lose
44:29
Speaker 3: the policy. It's a million dollar benefit. So a couple
44:32
Speaker 3: of things you can do. One, in this case, look
44:34
Speaker 3: at the cash surrender value. Interestingly enough, the community spouse
44:38
Speaker 3: is allowed to keep about one hundred and sixty thousand
44:40
Speaker 3: dollars as a community spousal resource allowance. I could allocate
44:46
Speaker 3: all of that cash value to that community spousal resource
44:50
Speaker 3: allowance so it won't be over the limit. And then
44:54
Speaker 3: I'll tuck away ten thousand dollars into an account for
44:57
Speaker 3: her basic checking account, and she will be at the
45:01
Speaker 3: maximum amount of assets that the community spouse can keep.
45:05
Speaker 3: And of course we'll transfer the policy just like before.
45:08
Speaker 3: And now I've preserved that policy from being taken. Otherwise,
45:13
Speaker 3: if there's no other way to save it, they're going
45:16
Speaker 3: to take the cash surrender value make you cash out
45:18
Speaker 3: the policy.
45:19
Speaker 2: Wow, So that's when you're closer than ever to receiving it.
45:22
Speaker 3: And likely right, so be mindful. Look at that there's
45:26
Speaker 3: definitely some things that can help you last minute save
45:28
Speaker 3: a million dollars. Can you imagine, folks, That's why you
45:33
Speaker 3: get this guide, Last minute eligibility Guide. How to treat
45:37
Speaker 3: life insurance, whole life, term life, it's in there, How
45:40
Speaker 3: the annuities work. What about a rental property, what about
45:44
Speaker 3: your primary residence? Each asset has its unique characteristics as
45:50
Speaker 3: to whether it's countable or non countable, and you need
45:53
Speaker 3: to learn how to make sure you don't just write
45:56
Speaker 3: checks and lose these assets even though you might not
45:59
Speaker 3: have done plan or if there's assets outside of the
46:02
Speaker 3: trust that you did do planning for, call and get
46:06
Speaker 3: it eight six six eight four eight five six ninety
46:09
Speaker 3: nine or Legal Exchange show dot com again eight six
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46:18
Speaker 3: Exchange Show dot com. You can download it there and
46:21
Speaker 3: go to Cushing Dolean PC's Instagram page for more.
46:24
Speaker 2: I want to run another scenario by Utah when it
46:26
Speaker 2: comes to life insurance because I've run into some whole
46:28
Speaker 2: life policies that have pretty substantial cash values to them.
46:32
Speaker 3: Something I got my running shoes on today.
46:34
Speaker 2: Right, So if you're if the healthy spouse allowed to
46:37
Speaker 2: keep one hundred and sixty thousand. What do you do
46:41
Speaker 2: if let's say there's three hundred thousand in that cash
46:45
Speaker 2: value in the policy, would you withdraw it? Yes, and
46:49
Speaker 2: then do something with the cash last minute?
46:53
Speaker 3: So that's a you know, that's an interesting play. If again,
46:57
Speaker 3: there might be other assets other than just this too,
47:00
Speaker 3: So you got to think about the whole picture set
47:02
Speaker 3: in terms of how much you're over assets. Right, So
47:05
Speaker 3: I mean if these policies allow for distributions, which most do, so, yeah,
47:12
Speaker 3: you would know that. So cash surrender values, you know,
47:16
Speaker 3: you might want to take out I guess you could.
47:20
Speaker 3: I guess you could withdraw, say two hundred thousand. Ye,
47:24
Speaker 3: leave one hundred thousand in the cash surrender value, allocate
47:28
Speaker 3: that hundred to one hundred and sixty that you're allowed
47:30
Speaker 3: to keep, and keep your one hundred and sixty thousand
47:35
Speaker 3: as a community spouse. But you have this extra two
47:38
Speaker 3: hundred thousand kicking around in your in your pocket, so
47:42
Speaker 3: that would be interesting that piece. Then you would have
47:44
Speaker 3: to take and maybe buy a MEDICID annuity with so
47:48
Speaker 3: that two hundred thousand would be added to the other assets.
47:52
Speaker 2: Money over assets client sixty.
47:55
Speaker 3: Yeah, So if you had like another three hundred thousand
47:57
Speaker 3: kicking around in your investment portfolio. Well, now I have
48:00
Speaker 3: five hundred thousand because I got the two hundred I Withdrew. Well,
48:04
Speaker 3: now I'm going to have to buy a bigger annuity
48:07
Speaker 3: right for the community spouse. Yep, fine, So that would
48:11
Speaker 3: be a way to do it. I would do that
48:12
Speaker 3: every day of the week, because remember, folks, we're really
48:16
Speaker 3: leveraging our one hundred and sixty thousand dollars community spousal
48:22
Speaker 3: resource allowance that we're allowed to keep. How Well, by
48:27
Speaker 3: tucking away, by keeping that policy, we're really converting one
48:32
Speaker 3: hundred and sixty thousand dollars of community resource allowance to
48:35
Speaker 3: a million one sixty by not getting rid of that policy.
48:41
Speaker 3: So yeah, it looks like you only kept one hundred
48:43
Speaker 3: and sixty. But no, when he passes, hopefully not out
48:46
Speaker 3: of order, you're going to have a lot more money
48:50
Speaker 3: to live on as a community spouse. And that's super important.
48:53
Speaker 2: And for folks who are listening that are not in
48:56
Speaker 2: this last minute planning situation Todd, and they're saying, Hey,
49:00
Speaker 2: I'm in that situation. I've got a million dollar policy
49:02
Speaker 2: for my wife because I took option a on my
49:05
Speaker 2: pension and I need her to get that survivor benefit.
49:08
Speaker 2: What can they do in advance to protect those insurance
49:11
Speaker 2: policies a lot harder?
49:14
Speaker 3: Right, So, term policies you can't really protect in advance
49:17
Speaker 3: because you're constantly paying premiums. But if you have a
49:21
Speaker 3: whole life policy that is paid up, or if you
49:26
Speaker 3: put enough money into an irrevocable trust that you're trying
49:29
Speaker 3: to protect your investment portfolio, and you can use the
49:32
Speaker 3: money in the trust to pay the premiums. So either
49:35
Speaker 3: that approach or fully paid up, then you can actually
49:39
Speaker 3: change the owner and the beneficiary of the whole life
49:43
Speaker 3: policy to the irrevocable Medicaid trust and in five years
49:48
Speaker 3: it will be protected as well. But you just can't
49:51
Speaker 3: make premium payments on a policy in the trust because
49:55
Speaker 3: it would reset the five year waiting period every time
49:58
Speaker 3: you paid a policy meum on something you don't own.
50:01
Speaker 2: So there are things that can be done better in advance,
50:05
Speaker 2: but there are last minute things that people can do
50:07
Speaker 2: to position themselves to qualify.
50:09
Speaker 3: Yeah, this was a great example to go through because
50:12
Speaker 3: life insurance does have that ability to do both right,
50:15
Speaker 3: and you need to know how to do both. Yes, so, folks,
50:18
Speaker 3: that's just one of the assets you need to deal with.
50:22
Speaker 3: Rental properties, vacation homes, primary residences, you know, excess dollars
50:29
Speaker 3: of investment accounts. Folks, call and get the guide, don't
50:33
Speaker 3: write the check. Last Minute Medicaid Eligibility eight six six
50:37
Speaker 3: eight four eight five six nine to nine or Legal
50:40
Speaker 3: Exchange show dot com and download it right there.
50:44
Speaker 2: Todd Lutsky from the law firm of Cushing and Dolan,
50:46
Speaker 2: thank you so much.
50:48
Speaker 3: Always a pleasure. Thank you.
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 Lutsky.
51:00
Speaker 1: One day you're living in your own home, the next
51:03
Speaker 1: you can't return home after rehab. Now you're faced with
51:06
Speaker 1: a nursing home bill of more than fourteen thousand dollars
51:09
Speaker 1: a month and wondering how you're gonna pay for it.
51:12
Speaker 1: These situations can occur without warning, but Cushing and Dolan
51:16
Speaker 1: can help before you make any major decisions, get the facts.
51:20
Speaker 1: Cushing and Dolan's new guide Last Minute Medicaid Eligibility explains
51:24
Speaker 1: common misconceptions about Medicaid, what assets may or may not
51:27
Speaker 1: be at risk, and why the first answer you receive
51:30
Speaker 1: isn't always your only option. Call right now eight six
51:33
Speaker 1: six eight four eight five six ninety nine and get
51:36
Speaker 1: you a free copy of Last Minute Medicaid Eligibility. That's
51:39
Speaker 1: eight six six eight four eight five six nine nine.
51:42
Speaker 1: Or you can request the guide online at Legal exchange
51:44
Speaker 1: show dot com. That's Legal exchange show dot com. The
51:48
Speaker 1: preceding is paid for and the views expressed are solely
51:50
Speaker 1: those of Cushing and Dolan. Cushing and Dolan into Armstrong
51:53
Speaker 1: Advisory may contact you offering legal or investment services. Cushing
51:56
Speaker 1: and Dolan and Armstrong Advisory do not endorse each other
51:58
Speaker 1: and are not affiliated.
52:02
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52:48
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
52:50
Speaker 1: registered investment advisor. Nothing in the ad or in any
52:52
Speaker 1: Armstrong guide. A specific financial, legal, or tax advice can
52:54
Speaker 1: sult your own financial, tax, intestate planning advisors before making
52:56
Speaker 1: any investment decisions. Armstrong may contact you to offer investment
52:59
Speaker 1: advisory services. A nursing homestake can cost more than fourteen
53:02
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Speaker 1: Last Minute Medicaid Eligibility that's eight six six eight four
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53:18
Speaker 1: exchange show dot com. The proceeding was paid for and
53:20
Speaker 1: the views expressed are solely those of Cushing and Dolan.
53:22
Speaker 1: Cushing and Dolan in or Armstrong Advisory may contact you
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