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Ask Todd: What happens if you plan your estate poorly? · The Financial Exchange Show

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  Speaker 1: This is Ask Todd on the Financial Exchange Radio Network.
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  Speaker 1: If you have an existing estate plan or in the
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  Speaker 1: market for one, Todd Lutsky is here to answer your
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  Speaker 1: questions and help you plan for later life. Ask Todd
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  Speaker 1: is presented by Cushing and Dolan, serving Massachusetts and New
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  Speaker 1: England for more than thirty five years, helping families with
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  Speaker 1: a state and tax planning, Medicaid planning, and probate law.
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  Speaker 1: Visit Cushingdolan dot com. Now here's Todd Lutsky.
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  Speaker 2: It is Wednesday, so it's time for Ask Todd. If
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  Speaker 2: you have any questions in the estate playing realm, whether
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  Speaker 2: it's regarding estate taxes, probate, trust, give our studio line
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  Speaker 2: a call at eight eight eight two zero five two
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  Speaker 2: two sixty three. Again that phone number for any of
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  Speaker 2: your state planning questions. Eight eight eight two zero five
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  Speaker 2: two two six' Three. Todd how we doing?
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  Speaker 3: TODAY i am never better in you doing? Well doing Well.
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  Speaker 2: Todd RECENTLY i came across a piece Where trust And,
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  Speaker 2: will a company out, there did a survey where eighty
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  Speaker 2: two percent Of americans recognized that there was an importance
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  Speaker 2: behind a state, planning but only thirty one percent of
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  Speaker 2: them actually had a will as a result of this.
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  Speaker 2: Survey so my question to you, is what are some
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  Speaker 2: factors out there that people should consider as to whether
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  Speaker 2: or not and a state plan is something that they
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  Speaker 2: should think, about whether it's, aged they're economics behind their.
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  Speaker 2: Family what are some of the factors that you had
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  Speaker 2: to ask people to sort of think about before going
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  Speaker 2: down this.
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  Speaker 4: Road, YEAH i think it's it's it's really interesting those
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  Speaker 4: statistics you throw out there that it's like everybody knows it's.
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  Speaker 4: Important but let's face, it for all of, us it's
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  Speaker 4: the easiest thing in the world to put off, right,
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  Speaker 4: Right why DO i want to talk about death and?
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  Speaker 3: Taxes it's not, fun not. SEXY i make it.
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  Speaker 4: Fun come, on it's. Fun death and taxes can be,
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  Speaker 4: fun but it's. Not and at the end of the,
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  Speaker 4: day it's not easy to talk. About BUT i would
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  Speaker 4: say there's there's really a laundry list of. Things but
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  Speaker 4: if we group, it you, KNOW i would, say you,
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  Speaker 4: know young, people you, know like, yourself you know you you,
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  Speaker 4: know younger people may not have you, know thirteen million
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  Speaker 4: dollars of assets to worry about federal estate tax or
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  Speaker 4: maybe even you, know a two million In, massachusetts although
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  Speaker 4: it's easy to get there with a house and some
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  Speaker 4: other assets you don't think, about but and life insurance
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  Speaker 4: puts you right over the.
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  Speaker 3: Top but it's more about if they have young.
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  Speaker 4: Children, YEAH i, mean so if you have young, CHILDREN
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  Speaker 4: i think at the end of the, day forget the
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  Speaker 4: taxes and the probates so. Much that's, Important but you
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  Speaker 4: know they can't own. Anything and so if they can't own,
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  Speaker 4: anything THEN i don't want some guardian in my. Will,
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  Speaker 4: well first of, all you need you need a will
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  Speaker 4: at a bare minimum if you're if you're not going
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  Speaker 4: to do anything as a young family, member just because
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  Speaker 4: that's who appoints the. Guardian, so BUT i also would
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  Speaker 4: not want the guardian to be in owning all of my.
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  Speaker 4: STUFF i would, say why not have a trust own
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  Speaker 4: my stuff and put a trustee THAT i like or
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  Speaker 4: trust in that, position because then they have a fiduciary
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  Speaker 4: obligation to manage the money a certain, way use the
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  Speaker 4: real estate a certain, way you, Know but they don't own,
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  Speaker 4: it but trust owns. It so and then that would
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  Speaker 4: be providing for my children as they grow. Up over,
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  Speaker 4: TIME i can stagger the. DISTRIBUTIONS i can, control how
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  Speaker 4: they get, it when they get, it and SO i
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  Speaker 4: think that's a reason for young. People next group would,
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  Speaker 4: be you, know we're older, now kids have moved, out
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  Speaker 4: we might have, grandkids and you know we're in our. Sixties,
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  Speaker 4: well we have stuff. Now so if we have stuff,
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  Speaker 4: now we're more worried, about you, know estate, taxes whether
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  Speaker 4: it be federal or. State we're worried about. Probate we're you,
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  Speaker 4: know worried about staying in control and taking care of
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  Speaker 4: the family with a bloodline. Distribution so those would be
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  Speaker 4: typical reasons as we get you, know a little, older
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  Speaker 4: and if we're you, know in our mid sixties or,
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  Speaker 4: so and we're, saying, well MAYBE i don't have a
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  Speaker 4: federal estate tax. Problem maybe NOW i need to think
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  Speaker 4: about nursing. Homes, well If i'm sixty five AND i
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  Speaker 4: can get a five year waiting period going and have
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  Speaker 4: all my assets protected by the Time i'm seventy and
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  Speaker 4: it's in my rear view, mirror well that might not
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  Speaker 4: be a bad idea. Either SO i need to understand
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  Speaker 4: how the irrevocable trust works so THAT i can see
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  Speaker 4: IF i can live with it and get my stuff
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  Speaker 4: not only, protected from the nursing, home but also avoiding
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  Speaker 4: probate and taxes and bloodline. Planning so lots of reasons
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  Speaker 4: to do. It AND i think another group would just, be,
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  Speaker 4: HEY i just got kids AND i don't want to
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  Speaker 4: go into their.
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  Speaker 3: Future, spouses, right you, know there's plenty of.
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  Speaker 4: Things to think about and controlling these, things you, know
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  Speaker 4: controlling these assets from the, grave and even skipping, generation
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  Speaker 4: skipping taxes by getting it to the. Grandchildren SO i
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  Speaker 4: think those are all different walks of life that would
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  Speaker 4: give you reason to, say, yeah let's figure out how
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  Speaker 4: to do.
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  Speaker 2: This absolutely a lot of good information. There we're talking
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  Speaker 2: here With Todd luski From Kushian. Dolan if you have
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  Speaker 2: any questions pertaining some of the subjects that he just talked,
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  Speaker 2: about whether it's regarding a, state, taxes trust, work probatea,
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  Speaker 2: voids all those types of. Things give our studio line
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  Speaker 2: of call at eight eight eight to zero five two
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  Speaker 2: two sixty. Three again that phone number for any questions
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  Speaker 2: For Todd lutsky eight eight eight to zero five two
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  Speaker 2: two six. Three we're gonna take a quick break here
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  Speaker 2: on The Financial. Exchange when we come, back we'll have
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  Speaker 2: your questions With todd right after This.
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  Speaker 1: Ask todd With Todd lutsky Every wednesday at ten thirty
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  Speaker 1: only here on The Financial Exchange Radio. Network Todd letsky
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  Speaker 1: answers your questions about estate and elder life planning Every
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  Speaker 1: wednesday at ten thirty right here on The Financial Exchange Radio.
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  Speaker 2: Network we are back here With Todd lutsky From Cushion
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  Speaker 2: dolan for our weekly segment Of Ask. Todd if you
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  Speaker 2: have any questions in the estate planning realm regarding probate,
• 5:53
  Speaker 2: avoidance trust, wills anything in that, nature give our studio
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  Speaker 2: line a call it eight eight eight to zero five
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  Speaker 2: two two six three again that number for any of your.
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  Speaker 2: Questions eight eight eight two zero five two to six. Three,
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  Speaker 2: Todd you've obviously had a trans amount of experience in
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  Speaker 2: the industry and you've seen probably the benefits of estate
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  Speaker 2: planning being done properly over the course of families lives playing,
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  Speaker 2: out but also some pitfalls as. Well there are any
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  Speaker 2: instances that come to mind recently where you found a
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  Speaker 2: situation where not the proper work was not done in
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  Speaker 2: that caused a tremendous issue for airs of a.
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  Speaker 4: Family, yeah you, KNOW i think that when you when
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  Speaker 4: you ask a question like, that it's more, Like, OKAY
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  Speaker 4: i got to get my estate plan in, order, which
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  Speaker 4: by the, way is what we're talking about with our
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  Speaker 4: guide this. Month it's back to the. BASICS i want
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  Speaker 4: to get. STARTED i want to figure out how to
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  Speaker 4: do my estate. Plan so you, KNOW i think picking
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  Speaker 4: a lawyer in that regard is part of that, equation
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  Speaker 4: and how DO i go about picking? One because when
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  Speaker 4: you draft, documents it's very important that they're drafted. Properly
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  Speaker 4: so there's an interesting case out there are now where
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  Speaker 4: a family had some estate planning documents prepared and the
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  Speaker 4: parents have passed, away and there were actually five, kids
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  Speaker 4: and as you might, imagine the kids aren't all getting, along,
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  Speaker 4: which by the, way is another reason.
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  Speaker 3: To do your estate plan.
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  Speaker 4: Right you got to be clear in terms of what
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  Speaker 4: your wishes are and keep the kids at. Bay so
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  Speaker 4: it was very. Interesting it had really only a piece
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  Speaker 4: of property in the trust that was their biggest, asset
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  Speaker 4: was like five six hundred thousand. Dollars it wasn't a huge,
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  Speaker 4: property but it was sold before they, died and the
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  Speaker 4: document says this particular PROPERTY xyz is supposed to go
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  Speaker 4: one quarter to each of four. Kids now there's five.
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  Speaker 4: Kids one kid is the. Trustee SO abc AND d
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  Speaker 4: are to get one quarter of this property located AT
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  Speaker 4: x Y. Z and then it, says, however if there's
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  Speaker 4: other assets in the, trust they are to go one.
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  Speaker 4: Fifth so that's the fifth child is now. Included and
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  Speaker 4: then it says with regard to the fifth, child the
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  Speaker 4: fifth child is to get none of the real, estate
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  Speaker 4: but one fifth of the other. Assets, oh seems seems,
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  Speaker 4: Clear but it's not because why real estate was sold
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  Speaker 4: before they, died so there's no real estate in the.
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  Speaker 4: Trust there's only other. Assets so the kids are, saying,
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  Speaker 4: no you don't get any because this the money that's
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  Speaker 4: in there is only the money from the sale of the,
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  Speaker 4: property and that's. Ours, no that's not what the document.
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  Speaker 4: Says the document says you get the real, estate.
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  Speaker 2: Doesn't say it's.
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  Speaker 4: Money it doesn't say anything about. Money in, fact it.
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  Speaker 4: Does it says the other, assets which would be, money
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  Speaker 4: is to go five. Ways and so now the trustee
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  Speaker 4: is in a position Where i'm, saying, well what DO
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  Speaker 4: i need to?
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  Speaker 3: Do what do you?
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  Speaker 4: Do you do a declaratory judgment and you issue you
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  Speaker 4: go to the court and you, Say, COURT i need
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  Speaker 4: you to tell me how to do this as, trustee
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  Speaker 4: which would be the client we would, represent saying you,
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  Speaker 4: KNOW i don't want to violate my fiduchi here responsibility
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  Speaker 4: and give the money to the wrong. PEOPLE i need
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  Speaker 4: you to clarify for me what this. Means that's not a.
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  Speaker 4: Problem the other kids are all upset about. That yet
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  Speaker 4: there's a no contest clause in the will that in
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  Speaker 4: the document that says if anyone challenges the trust or
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  Speaker 4: prevents the terms of the document frame from being executed,
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  Speaker 4: properly they immediately.
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  Speaker 3: Lose SO i, say there's really no downside.
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  Speaker 4: HERE i, say bring the declaratory judgment, action get your
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  Speaker 4: guidance from the, court and if they give you any,
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  Speaker 4: GRIEF i think they violate the no contest. Clause so
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  Speaker 4: it's still. Good it's not really a bad. Story it's
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  Speaker 4: a good. Story a little bad on the, drafting but
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  Speaker 4: at the end of the, day having language in there
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  Speaker 4: is going to ensure the donor's intent is satisfied, here
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  Speaker 4: and that's really what this is all. About we just
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  Speaker 4: want to make sure that your wishes are taken care.
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  Speaker 4: Of so interesting, case bad, drafting BUT i think at
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  Speaker 4: the end of the, day the donors' wishes are going
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  Speaker 4: to be, satisfied and of course the estate planning was done. Well, so,
• 10:00
  Speaker 4: folks if you want to get your state planning in,
• 10:03
  Speaker 4: order get. Started you've never known where to, Start you're
• 10:07
  Speaker 4: not sure how to. Begin this back to the basics
• 10:09
  Speaker 4: guide is really wonderful as we approach the end of the, month.
• 10:12
  Speaker 4: Folks it's it's a guide where it's basically my legal
• 10:15
  Speaker 4: recommendation to a made up family and made up facts and,
• 10:19
  Speaker 4: numbers and you could actually put your own family in
• 10:22
  Speaker 4: here and, say, hey does this actually a legal recommendation
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  Speaker 4: that works for my? Family but it also explains the
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  Speaker 4: basic documents from health cares to powers of, attorney et,
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  Speaker 4: cetera to the trust that was recommended in this particular,
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  Speaker 4: case which was an irrevocable. Trust and it explains all
• 10:39
  Speaker 4: about how it, works from taxes to bloodline planning to
• 10:42
  Speaker 4: control while you're. Living, folks get your estate plan in
• 10:46
  Speaker 4: order figure out how to begin the. Process get the
• 10:50
  Speaker 4: guide eight six six eight four eight five six nine
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  Speaker 4: nine Or Legal Exchange show dot com again eight six
• 10:57
  Speaker 4: six eight four eight five six Or Legal Exchange show dot.
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  Speaker 2: Com we're gonna go to the. Phones we've got d
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  Speaker 2: From New hampshire on what is your question For? Todd?
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  Speaker 5: Hi thank. You my mother uh has A i live
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  Speaker 5: In New, hampshire shoes In. Massachusetts she has a piece of.
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  Speaker 5: Property it's an old camp up on the lake In New.
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  Speaker 5: Hampshire she has put the property into an irrevocable, trust
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  Speaker 5: with my brother being the. Trustee, Okay and the thing,
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  Speaker 5: was you, know we were my husband AND i were
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  Speaker 5: supposed To we're the ones that take care of the
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  Speaker 5: camp and do all the spending of everything to take
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  Speaker 5: care of, it and she wants to sell it to.
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  Speaker 5: Us but now that it's an an irrevocable, trust we
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  Speaker 5: can't do. That is that? Right, no that's not.
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  Speaker 4: RIGHT i MEAN i haven't read the. DOCUMENT i would
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  Speaker 4: certainly have to read the. Document but any irrevocable trusts
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  Speaker 4: that we would ever draft certainly give the trustee the
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  Speaker 4: power to sell the. Property so as long as it's
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  Speaker 4: old for fair market, VALUE i don't think the trust
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  Speaker 4: would be prohibited in terms of who it sells it.
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  Speaker 4: To like let's SAY i want it to buy. It
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  Speaker 4: the trustee should be able to, say, Yeah i'm going
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  Speaker 4: to sell You todd the camp and THEN i give you,
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  Speaker 4: know whatever it's. Worth here's five hundred thousand, dollars AND
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  Speaker 4: i put that five hundred thousand dollars into the. Trust
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  Speaker 4: so the trust still has the. Asset it's just now
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  Speaker 4: money and not real, estate and that money would still
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  Speaker 4: be held for the benefit of the family the way
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  Speaker 4: that your mom wants it to. Go SO i don't
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  Speaker 4: know why somebody is telling you that it can't be. Done,
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  Speaker 4: AGAIN i haven't read the. Document but as long as
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  Speaker 4: the trustee has the power to sell the, property WHICH
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  Speaker 4: i suspect they, do they you, know you could buy.
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  Speaker 4: It my question is why do you want to buy?
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  Speaker 4: It why not just inherit?
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  Speaker 5: It because we have a house that we are, selling
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  Speaker 5: and it's my understanding that once we sell this house
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  Speaker 5: for capital gains that we should buy something.
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  Speaker 3: Else so is the house how should you have your primary?
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  Speaker 4: Residence, yes so you get a five hundred thousand dollars
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  Speaker 4: exclusion when you sell your primary residence if you've owned
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  Speaker 4: and used it as your primary residence for two of
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  Speaker 4: the last five. Years there is no requirement to buy
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  Speaker 4: another piece of property at. All so your tax savings
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  Speaker 4: is not driven by you buying another piece of.
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  Speaker 3: Property oh, Okay, see people just need.
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  Speaker 4: To get the right. Advice you're acting under unfortunately. Misinformation
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  Speaker 4: so sell your, house buy if you want to, Buy
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  Speaker 4: but it has no bearing on buying another piece of.
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  Speaker 4: Property and, therefore Again i'm back to the, idea why
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  Speaker 4: do we need to sell the? House why not just
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  Speaker 4: wait around and maybe inherit it? Right is there any
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  Speaker 4: other reason you would need to own the house?
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  Speaker 5: Now, yeah we want to move out of, this you,
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  Speaker 5: know out of the. State and he's it's a convoluted.
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  Speaker 5: Situation we have the, house we want to buy the
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  Speaker 5: camp so that we can build up Permanent.
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  Speaker 3: Okay is the trustee willing to?
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  Speaker 5: SELL i think so we have an approach to Me
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  Speaker 5: YET i know my mom said that she had actually
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  Speaker 5: given us a, price you, know of what she would
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  Speaker 5: sell it to us.
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  Speaker 3: For, well be.
• 14:13
  Speaker 4: Careful you might want to do fair market value so
• 14:15
  Speaker 4: as not to upset, siblings so that everybody's treated, equally
• 14:19
  Speaker 4: and then you may need to adjust the language of
• 14:21
  Speaker 4: the trust after you buy the. House are you still
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  Speaker 4: getting a piece of what's in? THERE i don't, know
• 14:25
  Speaker 4: but check with your check with your mom on. That
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  Speaker 4: but check with the. Trustee i'm going to venture to
• 14:30
  Speaker 4: guess that this trust does have the power to, Sell
• 14:33
  Speaker 4: so let the trustee sell you the property if that's
• 14:37
  Speaker 4: what you. Want but remember you're not doing it because
• 14:40
  Speaker 4: there's any tax savings for. You so hopefully that helped a.
• 14:43
  Speaker 4: Little and these are kind of questions that are really
• 14:46
  Speaker 4: wonderful because people sometimes get. Misinformation but Hopefully i've straightened
• 14:50
  Speaker 4: things out for.
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  Speaker 2: Her that was, Fantastic, Todd thank you so much for
• 14:53
  Speaker 2: your time this. Week we really appreciate.
• 14:54
  Speaker 3: It always a.
• 14:55
  Speaker 1: Pleasure this has been asked on on The Financial Exchange
• 14:59
  Speaker 1: radio Work Ask todd With Todd lutsky has been presented
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  Speaker 1: By cushing And, dolan Serving massachusetts And New england for
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  Speaker 1: more than thirty, years helping families with the state and tax,
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  Speaker 1: Planning medicaid, planning and probate. Law call eight hundred three
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  Speaker 1: Com the views expressed in this segment are solely those
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  Speaker 1: Of cushing And Dolan Armstrong. Advisor he does not provide
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  Speaker 1: any legal or tax. Advice please consult with your illegal
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  Speaker 1: not endorse each other and are not.
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  Speaker 2: Affiliated taking a look around at, markets we've got The
• 15:29
  Speaker 2: Dow jones up over about two hundred, points THE smp
• 15:32
  Speaker 2: five hundred is up close to fifty points zero point eight,
• 15:35
  Speaker 2: percent and The nasdaq is rallying quite a, bit up
• 15:37
  Speaker 2: over one. Percent all eyes will be on In vidia
• 15:41
  Speaker 2: as they will report their earnings after the close of
• 15:44
  Speaker 2: the market. Today we'll have a full recap of those
• 15:47
  Speaker 2: earnings on tomorrow morning, show and then to kick off
• 15:49
  Speaker 2: our second hour will also be previewing those In nvidia
• 15:53
  Speaker 2: earnings and what to expect come four o'clock this. Afternoon
• 15:57
  Speaker 2: that's all the time that we have for the first
• 15:58
  Speaker 2: hour here on the financial, extaining but stick with. Us
• 16:00
  Speaker 2: we got a lot more to cover right after this.
• 16:02
  Speaker 3: Break