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Ask Todd: Your personal bank account should never be in your trust · The Financial Exchange Show

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  Speaker 1: This is Ask Todd on the Financial Exchange Radio Network.
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  Speaker 1: If you have an existing estate plan or in the
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  Speaker 1: market for one, Todd Letsky is here to answer your
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  Speaker 1: questions and help you plan for 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: And we do have Todd Lutsky with us right now
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  Speaker 2: for Ask Todd. Phone lines are wide open for you.
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  Speaker 2: Get those fingers dial in eight eight eight to zero
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  Speaker 2: five two two sixty three. That is the number to
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  Speaker 2: call to Ask Todd your estate planning questions live on
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  Speaker 2: air again. Eight eight eight to zero five two two
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  Speaker 2: sixty three is the number. We usually get two to
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  Speaker 2: three calls that we can get through, so make sure
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  Speaker 2: you call early and often in order to get in line.
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  Speaker 2: That phonemer again is eight eight eight two zero five
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  Speaker 2: two two six three. Mister Lotski, how you doing.
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  Speaker 3: I'm doing great. I'm afraid to ask you.
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  Speaker 2: I actually learned something interesting yesterday.
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  Speaker 3: Yeah, do you have.
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  Speaker 2: The biggest export from Australia is boomerangs. Really it's also
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  Speaker 2: the biggest import, that's true, Wild Yeah, Todd, want to
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  Speaker 2: talk to you a little bit about revocable trusts. Can
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  Speaker 2: you give a quick simple explanation for similarities and differences
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  Speaker 2: as it relates to someone doing their estate plan with
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  Speaker 2: a revocable trust compared to a will.
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  Speaker 3: Yeah, so it makes it. It makes a big difference,
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  Speaker 3: I mean just from a probate standpoints where you have
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  Speaker 3: to start with that. But that's just really the tip
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  Speaker 3: of the the iceberg really, because yeah, everybody wants to
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  Speaker 3: avoid probate and you say, why do I want to
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  Speaker 3: avoid probate, Well, it's a big along process. And if
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  Speaker 3: you have a will, the will absolutely will go to probate.
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  Speaker 3: It's the only state planning document that you must file
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  Speaker 3: at the probate court. So we already know by having
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  Speaker 3: things governed by the probate by the will means it's
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  Speaker 3: going to be governed by the probate court. So a
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  Speaker 3: probate asset is first defined as something you own in
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  Speaker 3: your own name and it is not a designated beneficiary
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  Speaker 3: attached to it. So if it's in your own name,
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  Speaker 3: no designated beneficiary, it's going to probate. What's that A house,
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  Speaker 3: a vacation home, a rental property, right, iras generally have beneficiary,
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  Speaker 3: so you're probably going to luck out there. Jointly hold
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  Speaker 3: accounts also will avoid probate. Not great for a state planning,
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  Speaker 3: but they will avoid probate. And so those are the
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  Speaker 3: typical kinds of own By the way, with probate assets,
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  Speaker 3: remember while it's important to avoid probate just in general, house,
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  Speaker 3: vacation home, rental properties, you know that vacation home might
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  Speaker 3: be in another state, so we want to avoid probate.
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  Speaker 3: We also want to avoid probate in every state. So
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  Speaker 3: when you start talking about the need to avoid probate,
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  Speaker 3: you really need to think about it when you've got
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  Speaker 3: real estate because now you could be going and probating
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  Speaker 3: an ancillary probate in any state that you have property in,
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  Speaker 3: so really important to avoid it. That's the easy part.
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  Speaker 3: The second part is people come in and say, jeez, Todd,
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  Speaker 3: I've done a will, I've got my estate plan all done. Well, No,
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  Speaker 3: not really, because a will's a won't is what I
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  Speaker 3: like to say, meaning it won't do The following things,
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  Speaker 3: and these might be important to you. Well, it won't
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  Speaker 3: avoid probate, as we just explained, it won't likely reduce
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  Speaker 3: a state taxes because it'll probably just say I leave
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  Speaker 3: everything to my spouse and then my kids, so not
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  Speaker 3: avoiding estate taxes. And it won't protect assets from a
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  Speaker 3: nursing home if that's a concern of yours. So to me,
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  Speaker 3: there's three major parts of an estate plan that are
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  Speaker 3: not covered by a will, So a wills it won't.
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  Speaker 3: So I'm thinking we now know the difference because if
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  Speaker 3: we set up a trust, whether it's trevocable or irrevocable,
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  Speaker 3: at least we know it will avoid probate, it will
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  Speaker 3: shelter assets for a state taxes, and it will protect
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  Speaker 3: assets from a nursing home if it's irrevocable.
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  Speaker 2: Talking with Todd Lutsky from the law firm of Kushing
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  Speaker 2: and Dolan segment is your chance to ask Todd your
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  Speaker 2: estate planning questions. Studio line still open. It eight eight
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  Speaker 2: eight to zero five two two six three. That is
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  Speaker 2: the number to call to ask Todd your estate planning
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  Speaker 2: questions live on air right now again it's eight eight
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  Speaker 2: eight to zero five two two six three. Still got
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  Speaker 2: room for you, so again get calling it eight eight
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  Speaker 2: eight to zero five two two six three. We're gonna
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  Speaker 2: take a quick break now, but when we come back,
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  Speaker 2: it's gonna be right to your questions with Todd Lutsky again.
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  Speaker 2: That phone number is eight eight eight to zero five
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  Speaker 2: two two six'.
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  Speaker 1: Three Ask tod With tod Every wednesday at ten thirty
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  Speaker 1: only here on The Financial Exchange Radio. Network you're listening
• 5:08
  Speaker 1: To Ask todd With Todd lutsky on The Financial Exchange Radio.
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  Speaker 4: Network, alrighty let's get right to your calls With Todd.
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  Speaker 2: Lutsky first in the, queue we've Got dave And. Melrose,
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  Speaker 2: dave what's your question For?
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  Speaker 5: Todd good, morning.
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  Speaker 6: GENTLEMEN i have a question beguiding the trust and MONEY
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  Speaker 6: i have to. Trust give you a vocal trust set
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  Speaker 6: up By.
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  Speaker 5: Todd thank, You, todd you did a great. Job thank.
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  Speaker 3: You you're check in the.
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  Speaker 5: MAIL i just want to make Sure i'm not doing
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  Speaker 5: anything wrong by having all my, income like even Social
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  Speaker 5: security that you, know going to the trust and then
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  Speaker 5: take it out into my personal account WHEN i.
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  Speaker 6: Need it or AS i need. It, okay but my
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  Speaker 6: idea is that it'll if it's if there's Any IF
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  Speaker 6: i don't use all the, money it stacks up in the,
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  Speaker 6: trust and that's a good place for it to be
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  Speaker 6: in terms of the nursing.
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  Speaker 3: Home so let me ask you just a couple of.
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  Speaker 3: Questions so you said a couple of. Things that one
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  Speaker 3: one is a little. Alarming but let me so in
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  Speaker 3: the trust you have i'd imagine just some, investments, right, stocks, bonds, money.
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  Speaker 6: Right plus income coming in.
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  Speaker 3: Social i'm going to stop on that just for a,
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  Speaker 3: seconds just for. Now the first question is you do have, stocks,
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  Speaker 3: bonds and money that generates what we call interest and, dividends, right?
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  Speaker 3: Correct so, okay So i'm going to address interests and
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  Speaker 3: dividends as number one and number two social. Security, okay
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  Speaker 3: those are the two items that really need to be.
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  Speaker 3: Addressed this is a very important question for everybody. Listening
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  Speaker 3: so you need to go back and look get my
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  Speaker 3: engagement letter just to remind, you which we talked about
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  Speaker 3: when we funded the. Trust the one ITEM i indicated
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  Speaker 3: should never go in your trust is your personal bank.
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  Speaker 3: Account your personal bank account that receives your social security
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  Speaker 3: and pension for some people should never be in the.
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  Speaker 3: Trust so please stop that from happening because every single
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  Speaker 3: time you deposit that Social security check into that, trust
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  Speaker 3: you start a five year waiting period for medicaid. Eligibility
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  Speaker 3: so you do not ever want your social security to
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  Speaker 3: go into your. Trust that stays in your bank account
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  Speaker 3: outside the. Trust, okay so you're gonna need to fix that.
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  Speaker 3: ASAP i don't know if you want to just take
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  Speaker 3: the account out or tell Social security to redirect the
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  Speaker 3: money to an account that is not in the. Trust,
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  Speaker 3: now the other, part interest and. Dividends the money you
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  Speaker 3: have sitting in the. Trust regarding inter and, dividends absolutely love, it.
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  Speaker 3: Right you can have that money in, there you can
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  Speaker 3: have it, grow you can have capital gains, grow and
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  Speaker 3: you can even have the interest and dividends kicked out
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  Speaker 3: every month automatically to your personal account which is outside the,
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  Speaker 3: trust which is now going to be that same account
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  Speaker 3: that receives your Social Security so as that money comes, out,
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  Speaker 3: perfectly allowed to use it and live on. It but
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  Speaker 3: as you, said you might not you might want to
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  Speaker 3: leave it in there, Perfectly, okay if you want to
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  Speaker 3: leave it in, there we have it's set up as
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  Speaker 3: a grant or trust for income tax. Purposes so In.
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  Speaker 3: English that means you're going to be able to continue
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  Speaker 3: to pay the income taxes on that money at your
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  Speaker 3: own personal, rate even if you don't take it. Out
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  Speaker 3: so there's no tax problem for you leaving it in,
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  Speaker 3: there and it's completely available for you if you choose
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  Speaker 3: not to leave it in. There SO i like that
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  Speaker 3: whole aspect of what you're. Doing and, again even if
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  Speaker 3: it builds up in, there it doesn't. Matter it's an account,
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  Speaker 3: receivable so you can always Take let's, say let's say
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  Speaker 3: it builds up five thousand dollars a year that you're
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  Speaker 3: are a month that you're not taking, out and they're
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  Speaker 3: maybe you, know at the end of three months you
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  Speaker 3: got fifteen thousand dollars in. There well you can take
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  Speaker 3: out fifteen thousand dollars if you need it for. Something
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  Speaker 3: because it's. Income it's an account, receivable it's not and
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  Speaker 3: it's not added to, principle so it doesn't affect your
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  Speaker 3: five year waiting. Period SO i think you're doing a
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  Speaker 3: great job on that. Front just go fix That Social
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  Speaker 3: security account and have it be paid to your personal,
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  Speaker 3: account not the. Trust so hope that was helpful and
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  Speaker 3: hopefully it's helpful for everybody. Listening folks want to tell
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  Speaker 3: you the new guide never been given away. Before it's
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  Speaker 3: new for this month and never be given away. Before
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  Speaker 3: it's really becoming much more in vogue to do a
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  Speaker 3: simply joint revocable trust when you do your. Planning why
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  Speaker 3: because of the new law that passed keeping the estate
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  Speaker 3: tax exemptions. High this trust allows you to cram down
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  Speaker 3: more assets than you could if you divided assets between
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  Speaker 3: husband and, wife so you can shelter more on the
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  Speaker 3: first death for state tax. Purposes you also get a
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  Speaker 3: full step up in basis on the first, death so
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  Speaker 3: you win on that, front and of course it'll play
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  Speaker 3: out to your family the way you wanted. To, Folks
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  Speaker 3: this guide is all about the simplicity of joint revocable.
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  Speaker 3: Trust learn how they work and win on both the
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  Speaker 3: income tax side by getting the step up in basis
• 10:21
  Speaker 3: and the estate tax side by cramming down more on
• 10:24
  Speaker 3: the first death eight six six eight four eight five
• 10:28
  Speaker 3: six nine nine Or Legal exchange show dot. Com you
• 10:32
  Speaker 3: can download it there one more time eight six six
• 10:35
  Speaker 3: eight four eight five six nine nine Or Legal Exchange
• 10:39
  Speaker 3: show dot.
• 10:40
  Speaker 2: Com todd got another one here for. You let's go
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  Speaker 2: to Al In. Marblehead, oh what's your question For?
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  Speaker 1: Todd good, morning.
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  Speaker 7: GUYS i have a question. Tried my neighbor's going into
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  Speaker 7: a nursing home eighty nine years. Old they're in the
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  Speaker 7: hospital right, now and that they've already asked for to
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  Speaker 7: fill out a medicare for, them The Medicaid, yeah, SORRY,
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  Speaker 7: map excuse, ME Map.
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  Speaker 3: Health, yeah it's the same, time.
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  Speaker 7: Okay and she went to the senior center in our local.
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  Speaker 7: Towne she's sixty years, old she sort of, disabled she needs,
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  Speaker 7: help and they've filled out the form with. Her i'm very.
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  Speaker 7: Concerned the house is actually in her. Name she didn't
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  Speaker 7: have much. MONEY i don't know how she's going to live,
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  Speaker 7: there but that's a different. Story but what my question
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  Speaker 7: is he has about forty thousand in. Cash it was
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  Speaker 7: in a joint account with her because she's an only.
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  Speaker 7: Child SO i always lived with them and the wife passed.
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  Speaker 7: On what my question is is it a good idea
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  Speaker 7: for just a senior center to BE i, MEAN i
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  Speaker 7: thought the first one hundred days medicare used to. Pay
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  Speaker 7: why are they asking me to have this form filled
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  Speaker 7: belt even before they go into these?
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  Speaker 3: Facilities, well because if we Know we're going into a nursing, home,
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  Speaker 3: right not an assisted living but a nursing. Home, right
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  Speaker 3: we know that's where we're. Headed, yes you are. Right
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  Speaker 3: medicare AND i wish they wouldn't use the same word
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  Speaker 3: all the. Time but care will pay for the first hundred,
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  Speaker 3: days but not always the first one hundred, days, Right
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  Speaker 3: it will pay up to one hundred. Days so if
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  Speaker 3: you end up needing not skilled care, anymore then there
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  Speaker 3: is there's going to be a, cutoff, Right and you
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  Speaker 3: want to be ready For medicaid to kick, in which
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  Speaker 3: is a different payment, source, Right so you definitely want
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  Speaker 3: to fill out the application because it's a. Process it takes.
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  Speaker 3: Time BUT i don't agree with you that they should
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  Speaker 3: be using The Senior. Center no offense to The Senior,
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  Speaker 3: center but this might be out of their, league AND
• 12:40
  Speaker 3: i would say they should probably seek out a. Lawyer
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  Speaker 3: here's what should happen, Though if there's only forty grand
• 12:45
  Speaker 3: in a, house as long as the house is worth
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  Speaker 3: less than a million, dollars And i'm guessing it, is it,
• 12:51
  Speaker 3: is so if it's worth less than a million dollars and,
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  Speaker 3: change then the house would be considered non. Countable when
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  Speaker 3: you apply For. Medicaid, okay it's non countable as long
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  Speaker 3: as you check a, box know what you're, doing fill
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  Speaker 3: out the, application, right they'll put a lien on, it
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  Speaker 3: but it won't prevent you from becoming eligible For. Medicaid
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  Speaker 3: so the forty, grand of course. Will but, again as
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  Speaker 3: you're going through this, process we would be telling, them,
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  Speaker 3: look why don't you take ten twelve thousand dollars in
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  Speaker 3: pre pay a? Funeral want to cover? That that's perfectly all.
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  Speaker 3: Right now you see we're whittling this. Down now we
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  Speaker 3: got like twenty eight grand. Left all, Right, well, yeah
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  Speaker 3: you're gonna hire a. Lawyer you're gonna have to pay the.
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  Speaker 3: Lawyer take some money out of, that, right is there
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  Speaker 3: anything else you need to?
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  Speaker 1: Pay?
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  Speaker 3: Right and whittle that down a, little and then whatever is. Left,
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  Speaker 3: okay IF i have to private pay the nursing home
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  Speaker 3: for one, month you, Know i'm fine with, that, right
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  Speaker 3: just to get the rest. Down but that's the process
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  Speaker 3: of getting you eligible For, medicaid not just you, know
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  Speaker 3: give all the money to the nursing home and then.
• 13:52
  Speaker 3: Apply but they should be able to get On medicaid
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  Speaker 3: on their own in this. Case but JUST i think
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  Speaker 3: they still might might want to try getting a lawyer
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  Speaker 3: to help him out a.
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  Speaker 2: Little So todd got one more for, you but we're
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  Speaker 2: gonna have to be. Quick jerry In, vermont you've got
• 14:07
  Speaker 2: about thirty seconds. Here what's your question For? Todd thank?
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  Speaker 5: You?
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  Speaker 8: Mother elderly mother and nursing home widow has a house
• 14:17
  Speaker 8: and nothing else else and she's been told she has
• 14:20
  Speaker 8: to sell the house to pay for her.
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  Speaker 3: Bill, okay so great, question and sorry for that, situation of,
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  Speaker 3: course but absolutely. Not you need to go get. Help
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  Speaker 3: you need to get someone to help her fill out
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  Speaker 3: The medicaid. Application she's actually naturally. Eligible you don't even
• 14:36
  Speaker 3: need any fancy planning at this. Point but you also
• 14:39
  Speaker 3: don't need to pay fifteen or sixteen thousand dollars a
• 14:42
  Speaker 3: month to the nursing home and sell the. House you
• 14:44
  Speaker 3: want to keep the, house check the box that it's non.
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  Speaker 3: Countable get On. Medicaid it'll be a much lower, rate
• 14:52
  Speaker 3: so you're lean that runs up against the house will
• 14:54
  Speaker 3: be way smaller than. That plus you still got the house.
• 14:58
  Speaker 3: Right since someone passes, away you get a step up in.
• 15:01
  Speaker 3: Basis kids have an option keep the house or sell.
• 15:04
  Speaker 3: It no capital gains. Tax sorry for the quick, answer
• 15:07
  Speaker 3: but just get some help on that they're going to
• 15:09
  Speaker 3: be eligible for medicaid the way it, is don't sell the.
• 15:12
  Speaker 3: House Todd, lotski thank you so much for joining us.
• 15:14
  Speaker 3: Today always a. Pleasure thank.
• 15:16
  Speaker 1: You this has Been Asked odd on The Financial Exchange radio.
• 15:20
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  Speaker 1: cushing And, dolan Serving massachusetts And New england for more
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  Speaker 1: 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 and
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