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

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  Speaker 1: This is Ask Todd on the Financial Exchange Radio network.
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  Speaker 1: If you have an existing estate plan or in the
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  Speaker 1: market for one, Todd Lutsky is here to answer your
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  Speaker 1: questions and help you plan for a later life. Ask
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  Speaker 1: Todd is presented by Cushing and Dolan, serving Massachusetts and
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  Speaker 1: New England for more than thirty five years, helping families
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  Speaker 1: with 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: As is the case every Wednesday here on the Fantasy Exchange,
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  Speaker 2: we are joined by Todd Lutsky from Cushion Dolan. If
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  Speaker 2: you have any questions regarding a state planning, gifting, Medicaid protection,
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  Speaker 2: give our studio line a call at eight eight eight
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  Speaker 2: to zero five two two sixty three. Again, any of
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  Speaker 2: your questions for Todd Lutsky give our studio line of
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  Speaker 2: call at eight eight eight two zero five two two six'. Three,
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  Speaker 2: todd thank you so much for joining.
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  Speaker 3: Us always a. Pleasure thank.
• 0:55
  Speaker 2: YOU i would Say Happy New, year but my producer
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  Speaker 2: here hates that and says that the time has passed
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  Speaker 2: to Say Happy New year on, that SO i will
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  Speaker 2: not do that to make SURE i don't get beaten
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  Speaker 2: up By.
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  Speaker 3: Tucker, well, Great i'm Gonna i'm not gonna Say Happy
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  Speaker 3: New year. Either all, right two of us didn't Say
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  Speaker 3: Happy New. Year perfect one.
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  Speaker 2: Time moving, On, Todd one big subject that comes up
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  Speaker 2: often meeting with clients is long term care costs and
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  Speaker 2: the planning surrounding. That and for some people it's just
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  Speaker 2: too costly to afford a long term care insurance, policy
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  Speaker 2: and it can be a situation where they just fall
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  Speaker 2: behind the eight ball and they find themselves in a
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  Speaker 2: situation where they're just not prepared for the long term
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  Speaker 2: care costs that they. Face what are some of the
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  Speaker 2: suggestions or tips that you have for folks for those
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  Speaker 2: who have not done their planning in terms of long
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  Speaker 2: term care, costs because it's a big issue around this,
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  Speaker 2: area quite.
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  Speaker 3: Expensive, yeah so a couple of. Things if you haven't
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  Speaker 3: done any long term care, planning you, know and you're
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  Speaker 3: of course not not faced with you, know going into
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  Speaker 3: the nursing home anytime, soon then you have time right
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  Speaker 3: to do some advanced planning and to figure out our
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  Speaker 3: way to protect some of these. Assets and by the,
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  Speaker 3: way we're not necessarily pooh poohing long term care. Insurance
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  Speaker 3: but you're, right you, Know, paul it does. Take it
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  Speaker 3: can cost a lot of, money and quite, frankly people
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  Speaker 3: that are, like when you get to age, seventy it's
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  Speaker 3: kind of. Tough it gets harder and harder to afford.
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  Speaker 3: It and, again you never need long term care insurance
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  Speaker 3: to be you, know the end all be. All it
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  Speaker 3: can just be you, know you, know don't have to
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  Speaker 3: be A cadillac. Policy it can be a smaller policy
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  Speaker 3: that sort of supplements the. Care but either, way it's
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  Speaker 3: it's generally never enough to cover sixteen seventeen thousand dollars a.
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  Speaker 3: Month it just. Isn't but so people in fact will, say, well,
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  Speaker 3: fine what CAN i? Do, well that's where these Irrevocable
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  Speaker 3: medicaid trusts come. In AND i know we spend a
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  Speaker 3: lot of time on them over the, years but they
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  Speaker 3: truly are you, know they're really the only way THAT
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  Speaker 3: i know of to protect assets from the nursing. Home
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  Speaker 3: so many people, say, well isn't there like a ton of,
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  Speaker 3: Options AND i always, say, no there's, Not like it's
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  Speaker 3: not like protect it's not like you, know looking paint
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  Speaker 3: where you have tons of. Options it's it's, really you,
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  Speaker 3: know do, nothing give your assets away to your, kids
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  Speaker 3: which is a horrible idea across the, board or do
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  Speaker 3: an irrevocable medicaid. Trust so those are really your three
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  Speaker 3: options if you want to protect. It and these trusts
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  Speaker 3: are are really you, know designed in a way to
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  Speaker 3: keep you in. Control AND i think that's the most
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  Speaker 3: important message THAT i can send to people When i'm
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  Speaker 3: talking about irrevocable. Trusts in, FACT i had one recently
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  Speaker 3: real life. Story we got hired to do the estate,
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  Speaker 3: plan and about two weeks later he called back and,
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  Speaker 3: Said i'm just so afraid of the word. Irrevocable and
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  Speaker 3: THEN i had to call him back and we talked,
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  Speaker 3: again AND i had to explain to him that you're
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  Speaker 3: reading the engagement letter and it seems, scary but it
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  Speaker 3: just needed. Clarification and by the time when we hung,
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  Speaker 3: up he's, like, oh, yeah you're, Right i'm really not
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  Speaker 3: giving up any. Control BECAUSE i explained to, him AS
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  Speaker 3: i explain to, everybody that you, know you live in your,
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  Speaker 3: house you pay your, bills you sell your, house you
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  Speaker 3: buy another, house all through the, trust very easily, done no,
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  Speaker 3: effort no adverse tax. Consequences you, know you can also
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  Speaker 3: have investment accounts in there, now NOT ira, accounts but investment,
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  Speaker 3: accounts you, know, stocks, bonds mutual. Funds you can manage the.
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  Speaker 3: Money you can you, know invest the money the same
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  Speaker 3: as you always. Did you can live off the, income
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  Speaker 3: take it, out enjoy the, income and even pay the
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  Speaker 3: taxes on that income at your, rates not at trust.
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  Speaker 3: Rates people get concerned all the. Time they hear or
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  Speaker 3: they go on the website or internet and they, say you,
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  Speaker 3: know my, GOSH i read about your vocable trusts and
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  Speaker 3: there's huge income tax problems with. Them, well there can,
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  Speaker 3: be but if they're drafted as grant or trust and
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  Speaker 3: they're not sure and everything is taxed at your own,
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  Speaker 3: rate so you, KNOW i just that's a little that's
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  Speaker 3: just an overall summary of these irrevocable trusts to let
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  Speaker 3: people know that it's really the best, way the only
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  Speaker 3: way to actually protect assets and to not really be
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  Speaker 3: frightened off by the word.
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  Speaker 2: Irrevocable certainly a lot of nuanced to the. Subject if
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  Speaker 2: you have any, Questions we're here With Todd lutsky From
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  Speaker 2: Cushion dolan on the estate paying realm or regarding irrevocable
• 5:20
  Speaker 2: Trust give our studio line a call at eighty eight
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  Speaker 2: to zero five two two sixty three again that studio
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  Speaker 2: line number for any of your questions For Todd lutsky
• 5:29
  Speaker 2: From Cushion dolan eighty eight two zero five two two sixty.
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  Speaker 2: Three we're gonna take a quick break, here but when
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  Speaker 2: we come, back we'll have your questions With. Todd right
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  Speaker 2: after this.
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  Speaker 1: Break Ask todd With Todd lutsky Every wednesday at ten
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  Speaker 1: thirty only here on The Financial Exchange Radio. Network you're
• 5:49
  Speaker 1: listening To Ask todd With Todd lutsky on The Financial
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  Speaker 1: Exchange Radio.
• 5:53
  Speaker 2: Network we are back here With Todd letsky From Christiane.
• 6:02
  Speaker 2: Dolan if you have any questions regarding gifting irrevocable trusts
• 6:05
  Speaker 2: or a state, planning give our studio on a call
• 6:08
  Speaker 2: at eight eighty two zero five two two sixty three.
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  Speaker 2: Again any of your questions heading into twenty twenty six
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  Speaker 2: on a state planning gifting irvocable trust give our studio
• 6:17
  Speaker 2: one a call eight eight eight two zero five two
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  Speaker 2: two six. Three we're gonna go to our first, Caller,
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  Speaker 2: jim who is in a. Truck, jim you're on With Todd, Lutsky.
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  Speaker 4: Hi, JOHN i DID i did irrevocable trust with you
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  Speaker 4: five years? Ago past the getting just getting ask the
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  Speaker 4: look back period and come to a realization that my
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  Speaker 4: state is apt to want to deal with the rental
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  Speaker 4: properties that are contained within the. TRUST i have been
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  Speaker 4: And i'm trying to plan my strategy going, forward balancing
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  Speaker 4: ten thirty one exchanges WITH. U DO i sell the?
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  Speaker 4: Properties put it in a B i?
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  Speaker 1: Iray?
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  Speaker 3: Uh?
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  Speaker 4: WHAT i just do that whole process of moving. Forward
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  Speaker 4: IF i sold the, properties, hey the? Taxes does that
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  Speaker 4: money go into MY? Ira or DO i have to
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  Speaker 4: set up a separate? Account how does that? All how
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  Speaker 4: does that all?
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  Speaker 2: Work?
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  Speaker 3: Yeah so stay on the line and keep it open
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  Speaker 3: BECAUSE i have a bunch of follow up questions just
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  Speaker 3: to make SURE i understand what you're. Asking SO i
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  Speaker 3: can ask another. Question. One you've had the trust for
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  Speaker 3: five years and you've had rental property in, it and
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  Speaker 3: you've been collecting rent and paying your bills and living
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  Speaker 3: off the. Income all that's been fine so. Far? Correct
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  Speaker 3: that is? Correct, Okay now you're at a point where
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  Speaker 3: you're saying and that's important for listeners to. Know by the,
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  Speaker 3: way just so they can understand. That you, know, HEY
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  Speaker 3: i can have an irrevocable, trust have rental property in
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  Speaker 3: it and live my. Life and it's so important that
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  Speaker 3: someone like you sort of you, know you, know justifies
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  Speaker 3: and verifies that that that can be. Done now the next, question,
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  Speaker 3: oh what IF i want to sell? It absolutely no
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  Speaker 3: problem in selling.
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  Speaker 1: It.
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  Speaker 3: Now i'm going to strongly suggest that you reach out
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  Speaker 3: to us when you're ready to do, that just because you,
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  Speaker 3: know some real estate attorneys don't understand the trust and
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  Speaker 3: how to do. It but absolutely you can sell. It
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  Speaker 3: out will go the? MONEY i mean, out we'll go
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  Speaker 3: let's say rental property number, one and in will come the.
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  Speaker 3: Money make sure that the money gets deposited into a
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  Speaker 3: bank account in the name of the trust under the
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  Speaker 3: TRUST id, number Which i'm sure you already, have because
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  Speaker 3: if you had rental, property we would have gotten you
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  Speaker 3: AN id number when we created. It and so now
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  Speaker 3: the real estate is gone and the money's. Here now
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  Speaker 3: you said a couple of. Things, one, Well, Geez, todd
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  Speaker 3: CAN i put the money in MY? Ira, no, right
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  Speaker 3: please don't do, that because the money that's in the
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  Speaker 3: trust is now just as protected as the house was
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  Speaker 3: when it was in the, trust and there is no
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  Speaker 3: new five year waiting, Period so don't take the money
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  Speaker 3: out and put in THE. Ira that would be a
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  Speaker 3: bad idea because remember THE ira is not in your,
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  Speaker 3: trust it is outside the. Trust it has to be
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  Speaker 3: outside the, trust otherwise there'd be a huge income tax
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  Speaker 3: if you were to pull the money out of THE
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  Speaker 3: ira and put it into the. Trust, now if you
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  Speaker 3: don't like that, approach you mentioned the word ten thirty one. Exchange,
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  Speaker 3: well listeners don't know what that, is so let me tell.
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  Speaker 3: THEM a ten thirty one exchange is a way for, You,
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  Speaker 3: jim or any of you listening to. SAY i want
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  Speaker 3: to sell my, property my rental, property which might have
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  Speaker 3: a very low basis Because i've been renting. It so
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  Speaker 3: let's SAY i bought it a long time, ago and
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  Speaker 3: so my cost basis is. Low in addition to, That
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  Speaker 3: i've been renting, it so my basis has been reduced
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  Speaker 3: even further via depreciation deduction every year THAT i take
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  Speaker 3: on my income tax. Return and IF i sell, It
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  Speaker 3: i'm going to have a large capital gains. Tax, WELL
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  Speaker 3: i don't want to do, that SO i want to
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  Speaker 3: defer that capital gain till. Later, well you can defer
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  Speaker 3: it by selling it and buying another property within one
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  Speaker 3: hundred and eighty. Days you have one hundred and eighty
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  Speaker 3: days to buy the replacement property if you're going to
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  Speaker 3: do a delayed ten thirty one, exchange and then the
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  Speaker 3: replacement property takes on the basis of the property that you,
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  Speaker 3: sold so there's no gain recognized and it's still built,
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  Speaker 3: in but you're not paying any. Taxes but if you
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  Speaker 3: die owning it because you decided never to sell this
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  Speaker 3: replacement property that you, bought, well then you'll get a
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  Speaker 3: step up in basis inside this irrevocable. Trust, So, jim
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  Speaker 3: this trust is design as a grand or trust for
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  Speaker 3: income tax, Purposes so not only can you direct the
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  Speaker 3: sale and the purchase of another property since you are
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  Speaker 3: treated as the owner for income tax, purposes you are
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  Speaker 3: also able to do a ten thirty one. Exchange just
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  Speaker 3: make sure the trust sells it and the trust buys
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  Speaker 3: the new, property and you will be able to defer
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  Speaker 3: the gain and then die owning the replacement, property and
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  Speaker 3: everything in the trust will get a new step up in,
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  Speaker 3: basis eliminating the built in gain for the, beneficiaries so
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  Speaker 3: then they can sell the property and pay no capital gains,
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  Speaker 3: tax and depending on the size of your, estate there
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  Speaker 3: may be no estate taxes when you pay when you die.
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  Speaker 3: Either so hopefully that gives you some indication of the
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  Speaker 3: flexibility and the benefits of doing. This and, yes you
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  Speaker 3: can do all all of those things with the trust you,
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  Speaker 3: have and anybody else who's got an irrevocable, trust at
• 12:05
  Speaker 3: least ones that we've prepared At cushing And dolan can
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  Speaker 3: do these things as. Well SO i long winded, answer,
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  Speaker 3: sorry but there was a lot going on in that.
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  Speaker 3: Question hopefully that was. Helpful but reach, out don't sell
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  Speaker 3: it on your. Own please contact the office and let's
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  Speaker 3: make sure we do it.
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  Speaker 1: Right.
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  Speaker 3: Folks jim in this case did advance. Planning so kudos To.
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  Speaker 3: Jim he's already gotten past the five year waiting. Period
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  Speaker 3: you've heard all about that and all the things he can.
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  Speaker 3: Do but you know, what there's people who don't do.
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  Speaker 3: It and the guide we're giving away this month allows
• 12:40
  Speaker 3: you to figure out how to protect. Assets last minute
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  Speaker 3: never is, good but better than. Nothing if you're faced
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  Speaker 3: with nursing home, care it's called long term care. Planning
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  Speaker 3: for the, procrastinator it talks about the look back period
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  Speaker 3: that we discussed. Here it talks about, annuities how do
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  Speaker 3: you use these to protect? Money last, minute it talks
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  Speaker 3: about pooled, trusts how to work with a, home a rental,
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  Speaker 3: property a vacation. Home they're all treated. Differently iras treated
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  Speaker 3: differently for married couples and single. People if you're faced
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  Speaker 3: with nursing home, care don't just write the. Check so
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  Speaker 3: for folks who have done no, planning or folks who
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  Speaker 3: have done planning but still have assets outside of this irrevocable.
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  Speaker 3: Trust there's something for everyone in this. Guide if you're
• 13:30
  Speaker 3: faced with going in the nursing, home call and get
• 13:33
  Speaker 3: it eight six six eight four eight five six nine
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  Speaker 3: to nine Or Legal Exchange show dot. Com you can
• 13:40
  Speaker 3: download it there again eight six six eight four eight
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  Speaker 3: five six nine nine Or Legal Exchange show dot.
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  Speaker 2: Com tud quick question for. You we're running out of time,
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  Speaker 2: here but what are the differences for planning for long
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  Speaker 2: term care costs for a married couple versus an? Individual
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  Speaker 2: what are some of the key takeaways is between those
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  Speaker 2: two differences.
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  Speaker 3: You mean from a planning perspective or at.
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  Speaker 2: A planning perspective between a married couple considerations versus a single.
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  Speaker 3: Person, yeah and you know, what there's still the same irrevocable.
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  Speaker 3: Trust so it's a it's a great question for the
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  Speaker 3: amount of time we have, left it's it's it is
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  Speaker 3: still going to be an irrevocable. Trust the difference, is you,
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  Speaker 3: know one is obviously a single person trust and one
• 14:26
  Speaker 3: is a married couple, trust and the and the the
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  Speaker 3: operational differences are very much the, same but for uh tax, Purposes,
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  Speaker 3: uh they're a little, different not for income tax, purposes
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  Speaker 3: but for estate tax. Purposes so for income tax, purposes
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  Speaker 3: operational day to, day you, know using investing the, money
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  Speaker 3: living on the, income all of that is the. Same
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  Speaker 3: paying the income taxes is the. Same but when you're,
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  Speaker 3: married the benefit there is the trust is designed to
• 14:57
  Speaker 3: shelter assets for a state tax as, well so you're
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  Speaker 3: able to do both nursing home planning and estate tax
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  Speaker 3: reduction by doubling the exemption to four million dollars rather
• 15:10
  Speaker 3: than just.
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  Speaker 2: TWO a lot of great information. There thanks so much
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  Speaker 2: for the, Time, Todd we really appreciate. It good luck
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  Speaker 2: to Your steelers this, weekend AND i hope you have
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  Speaker 2: a great rest of the. Week thanks so much for joining, Us, Todd.
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  Speaker 3: Thank you always a.
• 15:21
  Speaker 1: Pleasure this has been Asked todd on The Financial Exchange
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  Speaker 1: By cushing And, dolan Serving massachusetts And New england for
• 15:31
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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: legal or tax. Advice please consult with your legal or
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