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What Happens When Your Fiduciary Disregards Your Wishes · The Legal Exchange

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  Speaker 1: This is the Legal Exchange with Todd Lutsky from the
• 0:04
  Speaker 1: law firm of Cushing and Dolan and Susan Powers of
• 0:07
  Speaker 1: the Armstrong Advisory Group. Each week, Todd and Susan will
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  Speaker 1: discuss many topics including estate planning, how to avoid probate,
• 0:13
  Speaker 1: and protecting your money from a nursing home. If you
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  Speaker 1: need assistance in any of these areas, or have a
• 0:18
  Speaker 1: question about another issue that may affect your future, call
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  Speaker 1: to make an appointment. That's eight sixty six eight four
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  Speaker 1: eight five six ninety nine. Operators are standing by. Now
• 0:31
  Speaker 1: Here are your hosts, Todd Lutsky and Susan Powers.
• 0:37
  Speaker 2: Welcome into the Legal Exchange with Todd Lotsky. I'm Susan Powers,
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  Speaker 2: a financial advisor with the Armstrong Advisory Group, and I'm
• 0:44
  Speaker 2: joined by Todd Lutsky, a partner with the law firm
• 0:47
  Speaker 2: of Cushing and Dolan with a master's in taxation. Welcome Todd.
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  Speaker 2: How are you today?
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  Speaker 3: I'm never better in you.
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  Speaker 2: I am great, Thank you. What do you have for
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  Speaker 2: us this week?
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  Speaker 3: I have two cases.
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  Speaker 4: I got one from Maryland District Court case and these
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  Speaker 4: are always fun. I just liked saying it tortious interference
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  Speaker 4: with an inheritance.
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  Speaker 3: That just sounds fun. I don't know if I know
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  Speaker 3: that term tortious interference.
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  Speaker 4: Yeah, So it's a situation where a child was asked
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  Speaker 4: to change beneficiary designations on fidelity accounts from the children
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  Speaker 4: to the grandchildren and the child wasn't really happy about
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  Speaker 4: doing that and kind of never did it even though
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  Speaker 4: he was supposed to do it, and there was some issue.
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  Speaker 4: So as you might imagine, that results in a very
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  Speaker 4: uncomfortable situation.
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  Speaker 3: So what you know about that?
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  Speaker 4: But again, of course, the real issue with that is
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  Speaker 4: why are we dealing with designated beneficiaries and not planning.
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  Speaker 4: That's what jumps off the page on that one for me.
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  Speaker 4: And then secondly we go over to Indiana where we
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  Speaker 4: have an appellate court case. They are dealing with a
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  Speaker 4: trust contest situation and whether or not the grandeur had
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  Speaker 4: capacity when they were creating the trust. And again it's
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  Speaker 4: a situation where the donors of the trust had diagnosed
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  Speaker 4: with early stages or moderate stages of Alzheimer's and the
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  Speaker 4: question is wasn't too much and if it was too much?
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  Speaker 4: Is there are other things you can do. And I
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  Speaker 4: think these are sort of the lessons we'll learn from
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  Speaker 4: this case. But as you might imagine, it was created nevertheless,
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  Speaker 4: and then of course one of the children decided to
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  Speaker 4: say that no, it shouldn't exist because they probably weren't
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  Speaker 4: happy with what they were getting in the trust. But
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  Speaker 4: at least the trust was done, folks, And that's important
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  Speaker 4: because that's really part of the planning. And we're at
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  Speaker 4: the actually it's the end of the month. It's the
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  Speaker 4: last chance to get the guide, folks. It's estate planning
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  Speaker 4: potholes to avoid, and it really helps us avoid these.
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  Speaker 4: Both of these cases are really pothole oriented, right. Don't
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  Speaker 4: rely on designated beneficiaries and joint accounts, don't rely on
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  Speaker 4: a will. Don't think you don't have enough assets to plan.
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  Speaker 4: You know, things like that if you move, this would
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  Speaker 4: be a pothole. Maybe you should check your estate plan.
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  Speaker 4: If you lose a spouse, what do you do if
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  Speaker 4: you remarry, what do you do? You know, things to
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  Speaker 4: think about even when you're drafting. So at the end
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  Speaker 4: of the day, this estate planning Potholes to Avoid guide
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  Speaker 4: is great. If you haven't done your planning, what to
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  Speaker 4: make sure you avoid and if you have done your
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  Speaker 4: planning and any of these life events have occurred, this
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  Speaker 4: might trigger you to say, how do I need to
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  Speaker 4: review or fix my existing plan? End of the month,
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  Speaker 4: folks call and get it eight six six eight four
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  Speaker 4: eight five six nine to nine or legal Exchange show
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  Speaker 4: dot com again eight six six eight four eight five
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  Speaker 4: six nine to nine or Legal Exchange show dot com.
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  Speaker 4: And you can always go to Cushing Dolan PC or
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  Speaker 4: Instagram page for more information. Over to Maryland. So in
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  Speaker 4: this case, we have a situation where Maria twenty seventeen
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  Speaker 4: decides through her son Jason, who's also a financial advisor.
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  Speaker 4: Just note that opened up two Fidelity bank accounts five
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  Speaker 4: hundred thousand dollars. She designated the brother and her daughter,
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  Speaker 4: so Melissa and Jason yep equally as beneficiaries.
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  Speaker 2: Fair enough, okay.
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  Speaker 4: Maria then remarried later that year pothole. So Maria remarries
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  Speaker 4: and she decides to update her will directing that those
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  Speaker 4: Fidelity accounts be left to her five grandchildren equally.
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  Speaker 2: Instead of her kids.
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  Speaker 4: Correct her two children. Okay, So that's okay, You're allowed
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  Speaker 4: to do that. Of course, there's a lot of other
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  Speaker 4: problems to go with this, okay, so she updated her will.
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  Speaker 4: Why was there not a trust done? Just put that
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  Speaker 4: in the back of your mind. So Maria told Jason,
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  Speaker 4: her son, to go ahead and change the designated beneficiary
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  Speaker 4: on those accounts to be the grandkids. Jason reacted poorly,
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  Speaker 4: but Maria believed that he had changed the designated beneficiaries
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  Speaker 4: as instructed. Turns out that Jason not only did not
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  Speaker 4: change the designated beneficiaries, he ended up providing false and
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  Speaker 4: misleading instructions to Maria on how to change the designated
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  Speaker 4: beneficiaries on those accounts. March twenty twenty four, Maria dies.
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  Speaker 4: Jason then wrongfully takes the death certificate from the funeral
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  Speaker 4: home and uses them to take one half of the
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  Speaker 4: fidelity accounts for himself. Hmm, well, least he only took half.
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  Speaker 2: I guess that's Jason's bigger issues than being a bad
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  Speaker 2: son here.
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  Speaker 4: Melissa, individually, she was the other beneficiary beneficiary individually and
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  Speaker 4: as personal representative, decided to sue her brother, Jason for
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  Speaker 4: tortious interference with an inheritance, arguing, arguing, other and other claims,
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  Speaker 4: but Jason files a motion to dismiss the court denied
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  Speaker 4: the motion to dismiss in part finding many of the
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  Speaker 4: grandkid's complaints that were filed. Obviously they're the ones upset.
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  Speaker 4: We're filed sufficiently and pled sufficiently, so the case must
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  Speaker 4: go on. I don't have an answer for you, but
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  Speaker 4: at least it got o.
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  Speaker 2: I can tell you the answer. The answer is Jason's
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  Speaker 2: not only acting is a son, he's acting as an advisor,
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  Speaker 2: and he's in big trouble.
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  Speaker 3: Oh, you're right, you're looking at it from a home
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  Speaker 3: other perspective.
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  Speaker 2: So yeah, absolutely.
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  Speaker 4: So I think that's going to be a big problem
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  Speaker 4: for them.
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  Speaker 3: Okay, what are some tips and lessons folks?
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  Speaker 4: Whether this case ends up, which I hope is the
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  Speaker 4: right way, that Jason doesn't get this money and that
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  Speaker 4: the grandkids get it. Whether that happens or not, we
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  Speaker 4: don't know. But what can we learn. First, designated beneficiaries.
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  Speaker 4: This is not really a state planning folks, you know,
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  Speaker 4: but for a single person, it would avoid probate. That's
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  Speaker 4: the only thing that I see that it would do. However,
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  Speaker 4: it will not protect the assets from the nursing home
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  Speaker 4: if that was a concern of hers to get it
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  Speaker 4: to the grandchildren.
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  Speaker 3: Right.
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  Speaker 4: Also, it doesn't control how the kids get it, Like
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  Speaker 4: what if you wanted to protect it from future divorces,
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  Speaker 4: if those were concerns or something. Doesn't do it just
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  Speaker 4: allows an exact payout. And also if it's simply a
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  Speaker 4: way to allow the assets to get to the kids
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  Speaker 4: without them owning it while they're alive, that's really all it.
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  Speaker 4: All it does now, changing designated beneficiaries, I'm pretty sure
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  Speaker 4: is an action that the holder of the account needs
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  Speaker 4: to do.
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  Speaker 2: They even need to sign it, or they can log
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  Speaker 2: in themselves and change.
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  Speaker 3: It, sign it or log in themselves.
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  Speaker 4: Now, perhaps I will add one other thing, Susan that
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  Speaker 4: maybe a power of attorney could do it on their behalf. Sure,
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  Speaker 4: so that's a possibility, which is why I always say
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  Speaker 4: be careful who you appoint as power of attorney because she.
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  Speaker 2: Likely put her son on his power of attorney. That's right,
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  Speaker 2: So you're in a couple of hats.
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  Speaker 3: Which is strange.
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  Speaker 4: I was wondering why they were asking the sun to
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  Speaker 4: do it. If you're if you want it done, just
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  Speaker 4: go do it. But maybe people.
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  Speaker 2: Are comfortable online doing things.
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  Speaker 4: So that's a little bit about powers of it of
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  Speaker 4: about designated beneficiaries, folks, not my favorite way to do
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  Speaker 4: planning for sure. What about this will? It's strange to
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  Speaker 4: me here that she updated her will. Now, I guess
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  Speaker 4: it helps to show her intent that she wanted to
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  Speaker 4: leave these assets to her grandchildren. But unless you leave
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  Speaker 4: the asset in your own name without a beneficiary, the
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  Speaker 4: will isn't going to address it. Right, So the will
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  Speaker 4: doesn't even address where these assets go.
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  Speaker 2: Because there's beneficiaries on it.
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  Speaker 3: That's right.
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  Speaker 4: She had a designated beneficiary on the account, and so
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  Speaker 4: it avoids the will avoids probate, which is good, and
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  Speaker 4: goes directly to the beneficiaries. Even our convenience language wouldn't
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  Speaker 4: help in a will. It only covers joint accounts, not beneficiaries,
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  Speaker 4: so the beneficiaries would have got it.
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  Speaker 3: Okay.
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  Speaker 4: Finally, folks, what's the real issue here, biggest pothole? Why
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  Speaker 4: didn't you just replan, I mean, not do a new
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  Speaker 4: will and full around with beneficiary designations.
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  Speaker 3: Why not create a trust?
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  Speaker 4: Maybe if you're saying I want these assets to go
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  Speaker 4: to my grandchildren's that's your new wish that you tried
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  Speaker 4: to make it clear, Well, maybe I want to protect
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  Speaker 4: them from a nursing home to make sure they get there.
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  Speaker 4: Maybe I set up an irrevocable trust, put the assets
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  Speaker 4: in this trust, and now I'm controlling exactly where those
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  Speaker 4: assets go. I ensure through the trust where they go.
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  Speaker 4: I don't need to worry about any change of beneficiary.
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  Speaker 2: Or maybe they're miners too.
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  Speaker 3: Maybe they're and they probably are.
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  Speaker 4: Right this way, you could have even provided for your
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  Speaker 4: husband because she did remarry. Yes, you could have provided
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  Speaker 4: for your husband and ensured the assets go to your
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  Speaker 4: grandkids and kept your children completely out of the mix.
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  Speaker 4: So folks, get your planning done. Don't wait, don't you know?
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  Speaker 4: Just use designated beneficiaries and this guide Estate Planning Potholes
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  Speaker 4: to avoid talks about all of those kinds of issues.
• 10:02
  Speaker 4: Great for people who haven't planned, great for people who
• 10:05
  Speaker 4: have planned. They'll find something in there for everybody. Call
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  Speaker 4: and get the guide eight six six eight four eight
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  Speaker 2: You've been listening to Todd Lutsky, a partner with the
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  Speaker 1: You're listening to the Legal Exchange with Todd Lunsky, an
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  Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
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  Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
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  Speaker 2: and I'm joined by Todd Lutsky, a partner with the
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  Speaker 2: law firm of Cushing and Dolan with a master's in taxation.
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  Speaker 2: Where are we headed now, Todd.
• 14:07
  Speaker 3: We're already in Maryland. Let me get to Indiana. Indiana, Indiana.
• 14:12
  Speaker 4: In this case, we've got a situation where a trust
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  Speaker 4: is going to be contested regarding the grantor's capacity. Okay,
• 14:20
  Speaker 4: So in October of nine, Alice diagnosed with what they
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  Speaker 4: call moderate Alzheimer's. Of course, pause there, we don't know
• 14:28
  Speaker 4: what that means exactly. Alice and her husband Morris, met
• 14:32
  Speaker 4: with an attorney, Carmen, in twenty twelve to update their
• 14:37
  Speaker 4: estate plan. Carmen prepared the revocable trust based plan. Okay,
• 14:42
  Speaker 4: that sounds good, in which the son, Michael, would not
• 14:46
  Speaker 4: receive any of their rental properties. Doesn't sound like he's disinherited.
• 14:50
  Speaker 4: He just doesn't get the rental property.
• 14:52
  Speaker 2: Okay, okay.
• 14:54
  Speaker 4: Alice was quiet. Now she's the one to Alzheimer's. She
• 14:58
  Speaker 4: was quiet during the social meeting and the signing, but
• 15:02
  Speaker 4: Carmen made it a point he's the attorney to discuss
• 15:05
  Speaker 4: the finances and the changes to the estate plan with her,
• 15:08
  Speaker 4: and noted that her assent to them and that she
• 15:12
  Speaker 4: participated appropriately during the signing.
• 15:15
  Speaker 2: So she had capacity to sign them.
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  Speaker 4: Maybe that's what this case is about, right April twenty seventeen.
• 15:24
  Speaker 4: Morris died July twenty twenty one. Alice died October twenty
• 15:30
  Speaker 4: twenty four. Mike, now Mike was the one who was
• 15:35
  Speaker 4: getting no properties, no real estate, decided to file. Mike
• 15:40
  Speaker 4: moved to set aside the trust due to lack of capacity.
• 15:45
  Speaker 2: Three years later.
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  Speaker 4: October I'm sorry. October twenty twenty one, I'm sorry. It
• 15:50
  Speaker 4: died in July of twenty one. October of twenty twenty
• 15:53
  Speaker 4: one looked like a four, but it's a twenty one.
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  Speaker 4: Moved to claim that there was lack of capacity. Mike
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  Speaker 4: decided to depose the attorney, who claimed that he had
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  Speaker 4: no knowledge about the diagnosis or that she was seeing
• 16:08
  Speaker 4: a neurologist and the tests were showing that she was declining.
• 16:12
  Speaker 4: Turns out, of course, there were two emails in the
• 16:14
  Speaker 4: attorney's files showing that he was aware of the diagnosis
• 16:19
  Speaker 4: and asked them to be admitted during evidence. Doug, Mike's brother,
• 16:24
  Speaker 4: objected to this, and the court sustained the objections, prevented
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  Speaker 4: the emails from coming in and allowed no questions to
• 16:30
  Speaker 4: the witnesses about them. Also, that court issued an order
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  Speaker 4: that Alice did in fact have capacity done well. Mike
• 16:41
  Speaker 4: wasn't done, so Mike filed an appeal. The appellate court
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  Speaker 4: reversed and remanded the case, saying that emails were admissible
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  Speaker 4: as prior inconsistent statements from the attorney that could be
• 16:54
  Speaker 4: used to contradict Carmen's testimony.
• 16:58
  Speaker 2: So you know why I am giving you this expression
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  Speaker 2: on my face when you say we've remanded, that means
• 17:04
  Speaker 2: you have no answer for us.
• 17:05
  Speaker 3: No answer.
• 17:06
  Speaker 2: We don't enjoy that.
• 17:07
  Speaker 3: Me and all the listeners, Well, they'll tune in for
• 17:09
  Speaker 3: the follow up.
• 17:11
  Speaker 2: Well, if you have a show just with follow ups,
• 17:13
  Speaker 2: we'd be happy to attend. But I feel like you've
• 17:16
  Speaker 2: just left us hanging.
• 17:17
  Speaker 4: Yeah, so this was one we are hanging on. But again,
• 17:20
  Speaker 4: I think at the end of the day, it sounds
• 17:22
  Speaker 4: like those emails should be admitted and we should find
• 17:24
  Speaker 4: out not in and of itself, is just going to
• 17:27
  Speaker 4: make his testimony, you know, somewhat suspect that does not
• 17:31
  Speaker 4: go to the heart of the matter as to whether
• 17:33
  Speaker 4: or not she had capacity. Right, simply go look at
• 17:36
  Speaker 4: the diagnosis, the records. You know, it's not the end
• 17:39
  Speaker 4: of the story.
• 17:40
  Speaker 2: So you have different levels of capacity where you talk
• 17:43
  Speaker 2: to someone and you're I mean, they're getting everything you're doing.
• 17:47
  Speaker 2: They have capacity to sign their estate planning.
• 17:49
  Speaker 4: Actual capacity versus testimony, testamentary capacity versus Yeah, absolutely, sus
• 17:55
  Speaker 4: In fact, we're going to talk about that. But folks,
• 17:57
  Speaker 4: it is the end of the month, and this is
• 17:59
  Speaker 4: the time to get the guide to state planning potholes
• 18:02
  Speaker 4: to avoid, Like here, what's a huge pothole. How about
• 18:05
  Speaker 4: delaying doing your estate planning until you have Alzheimer's not
• 18:08
  Speaker 4: a good idea. Don't wait around, that's a pothole. What
• 18:11
  Speaker 4: if you get remarried, What if you have a spouse
• 18:14
  Speaker 4: who died, what if you change residencies. These are all
• 18:17
  Speaker 4: things that people have done their planning might need to
• 18:19
  Speaker 4: make sure they address the changes that need to be made.
• 18:23
  Speaker 4: Otherwise you could really screw up an existing plan. And
• 18:26
  Speaker 4: for all of you that haven't planned, don't rely on
• 18:28
  Speaker 4: a will, don't rely on a nominee realty trust. Don't
• 18:30
  Speaker 4: think that you have just beneficiaries on your assets that
• 18:33
  Speaker 4: that'll work. Don't think you don't have enough assets, folks.
• 18:37
  Speaker 4: For people who haven't done the plan, call and get
• 18:39
  Speaker 4: the guide. If you've done it and you have a
• 18:41
  Speaker 4: life event, learn what those are. Eight six six eight
• 18:45
  Speaker 4: four eight five six nine to nine or legal Exchange
• 18:49
  Speaker 4: show dot com. It is the end of the month,
• 18:51
  Speaker 4: folks eight six six eight four eight five six nine
• 18:54
  Speaker 4: nine or Legal Exchange show dot com. You can also
• 18:58
  Speaker 4: go to Christian gohanpiece. See our Instagram page for more information.
• 19:04
  Speaker 4: What do we learn here? Well, as I just said
• 19:08
  Speaker 4: a minute ago, you know, the biggest pothole is, you know,
• 19:11
  Speaker 4: Alzheimer's in a delay?
• 19:13
  Speaker 3: Why are we waiting long? Yeah?
• 19:14
  Speaker 4: Why are we waiting till I have moderate Alzheimer's to
• 19:17
  Speaker 4: do an estate plan However, I want to address this
• 19:19
  Speaker 4: because there are plenty of people who might be listening
• 19:23
  Speaker 4: that are in that very position.
• 19:25
  Speaker 2: Might have had an early onset diagnosis just at the
• 19:29
  Speaker 2: starting phase of it.
• 19:30
  Speaker 4: Absolutely right, So what can you do and how do
• 19:34
  Speaker 4: we proceed? Well, one pothole is obviously to avoid Please
• 19:38
  Speaker 4: don't wait so long. Now, Having said that, just because
• 19:41
  Speaker 4: she has Alzheimer's, depending on the stage of the Alzheimer's
• 19:47
  Speaker 4: she was in, she could still have had testamentary capacity
• 19:51
  Speaker 4: to sign these estate planning documents.
• 19:53
  Speaker 2: And how do you distinct determine that?
• 19:55
  Speaker 3: Todd? How do you know?
• 19:57
  Speaker 1: Well?
• 19:57
  Speaker 4: I mean, when I do things, I'll ask a lot
• 19:59
  Speaker 4: of question. I'll say, you know, so, how many children
• 20:02
  Speaker 4: do you have? If they're able to tell me, oh, three, great,
• 20:05
  Speaker 4: and let's say there's you know, then I might say, okay, well,
• 20:09
  Speaker 4: do you know how many daughters? You have, you know,
• 20:10
  Speaker 4: and they'll say a number. Well, if they've got three
• 20:13
  Speaker 4: sons and they tell me they have two daughters, well
• 20:15
  Speaker 4: that's a problem. But if they don't, that's fine. If
• 20:18
  Speaker 4: they rattle it off, fine, I'll say, you know, what
• 20:19
  Speaker 4: are their addresses?
• 20:20
  Speaker 3: Oh boom boom boom. Oh do you have grandchildren? Yeah?
• 20:23
  Speaker 3: How many?
• 20:23
  Speaker 4: They give me the right number? Do you have them
• 20:25
  Speaker 4: to know where they live? Oh yeah, two live with
• 20:27
  Speaker 4: their parents, one moved out you know.
• 20:28
  Speaker 3: Oh yeah, great. That shows you that they have some
• 20:32
  Speaker 3: understanding of the nature of their bounty, got it?
• 20:36
  Speaker 4: And so I'm like, all right, so they sort of
• 20:38
  Speaker 4: know who everybody is to me, that's really helpful towards
• 20:42
  Speaker 4: testamentary capacity. Whereas if they have no idea, they give
• 20:45
  Speaker 4: me the wrong number of grandchildren, they give me the
• 20:47
  Speaker 4: wrong ages, they give me, you.
• 20:48
  Speaker 3: Know, that's not helpful.
• 20:51
  Speaker 4: Okay, Well, in this case, since they had moderate Alzheimer's,
• 20:54
  Speaker 4: what are some other options, you know, maybe if you
• 20:56
  Speaker 4: don't want to run the risk of this lawsuit, especially
• 21:00
  Speaker 4: I think since they were saying no, they weren't treating
• 21:03
  Speaker 4: everybody equally. They said no rental properties to Mike. So
• 21:06
  Speaker 4: if you're trying to do that. The other option would
• 21:09
  Speaker 4: be get a guardianship. So you know they were in
• 21:11
  Speaker 4: twenty twelve, they had plenty of time before they passed away.
• 21:14
  Speaker 2: Would that help them, Todd?
• 21:15
  Speaker 4: So if you go get a guardianship, the court will
• 21:17
  Speaker 4: appoint up a guardian ad item. The attorney that's doing
• 21:22
  Speaker 4: the estate plan will then meet with the guardian ad
• 21:24
  Speaker 4: item and explain the need for an estate plan. Why
• 21:28
  Speaker 4: are we doing an estate plan? Make sure it's in
• 21:31
  Speaker 4: the ward's best interest, and the guardian d light and
• 21:34
  Speaker 4: will say, yeah, it makes sense.
• 21:35
  Speaker 3: When't avoid probate.
• 21:36
  Speaker 4: We want to make sure their wishes are taken care of,
• 21:37
  Speaker 4: and we've got a healthy spouse, we've got a six spouse,
• 21:41
  Speaker 4: and yeah, this sounds like a great plan and it's
• 21:43
  Speaker 4: in everybody's best interest.
• 21:44
  Speaker 2: And it's certainly going through that process I would think
• 21:47
  Speaker 2: would be much more affordable than the legal battle at
• 21:50
  Speaker 2: the end.
• 21:50
  Speaker 4: Once you're gone, oh sure, yeah, the cost here is irrelevant,
• 21:53
  Speaker 4: right yeah, And then you finally get agreement, You go
• 21:56
  Speaker 4: to the judge and the judge either accepts or doesn't
• 21:58
  Speaker 4: accept the fact that this isn't the best interest of
• 22:00
  Speaker 4: the ward. If it is, now you've got a trust
• 22:03
  Speaker 4: created for the family right now, there would be no
• 22:08
  Speaker 4: basis for challenging the trust for undue influence. Why because
• 22:15
  Speaker 4: I went through this court procedure to ensure that the
• 22:20
  Speaker 4: estate plan was a viable part of it. Right, And
• 22:24
  Speaker 4: so the lesson is, and if you have that, then
• 22:26
  Speaker 4: you're okay. So I don't want you to think that
• 22:28
  Speaker 4: that's one option if you have a guardianship, if you're
• 22:32
  Speaker 4: not sure of capacity and you don't want litigation guardianships
• 22:36
  Speaker 4: and option, or if you happen to have a power
• 22:39
  Speaker 4: of attorney in place. Now, the power of attorney doesn't
• 22:41
  Speaker 4: allow you to do wills and healthcare proxies and all that,
• 22:44
  Speaker 4: but it could allow you if it has the right
• 22:46
  Speaker 4: language in it, to use to create a trust. So
• 22:50
  Speaker 4: like our power of attorney says I grant the power
• 22:52
  Speaker 4: to create and fund revocable and irrevocable trusts, among other language.
• 22:57
  Speaker 3: But that's in there. If you got that, then you
• 22:59
  Speaker 3: can the healthy spouse can just create the estate plan.
• 23:03
  Speaker 4: So, folks, there's some other ways to do this. Maybe
• 23:05
  Speaker 4: then just gamble on you know, a diagnosis and leave
• 23:09
  Speaker 4: yourself open. The big issue, the big learn the big
• 23:12
  Speaker 4: lesson takeaway don't wait, get your planning done, learn what
• 23:16
  Speaker 4: to do, what not to do, get the guide. That's
• 23:18
  Speaker 4: the end of the month, folks, last minute or estate
• 23:20
  Speaker 4: planning potholes to avoid good for both sides.
• 23:23
  Speaker 3: Of the equation.
• 23:24
  Speaker 4: If you have planned, if you haven't planned eight six
• 23:27
  Speaker 4: six eight four eight five six ninety nine or Legal
• 23:31
  Speaker 4: Exchange show dot com again eight six six eight four
• 23:34
  Speaker 4: eight five six nine to nine.
• 23:36
  Speaker 2: You've been listening to Todd Lutsky, a partner with the
• 23:39
  Speaker 2: law firm of Cushing in Dolan. I'm Susan Powers, a
• 23:42
  Speaker 2: financial advisor with the Armstrong Advisory Group, and Todd will
• 23:45
  Speaker 2: be answering your listener questions when we return to the
• 23:48
  Speaker 2: Legal Exchange with Todd Lutsky.
• 23:51
  Speaker 1: Long term care costs can reach thousands of dollars per
• 23:54
  Speaker 1: month and can put a serious strain on your savings.
• 23:57
  Speaker 1: The experts at Cushing and Dolan often see families off
• 24:00
  Speaker 1: guard by that reality. Without the right plan in place,
• 24:03
  Speaker 1: those costs can quickly eat through a lifetime of your
• 24:05
  Speaker 1: hard work. But here's the shocker. Many estate plans don't
• 24:08
  Speaker 1: protect your assets from those expenses. The right strategy may
• 24:11
  Speaker 1: involve specific types of trusts designed to help protect your assets,
• 24:15
  Speaker 1: but timing matters. Cushing and Dolan has a brand new
• 24:18
  Speaker 1: guide called Detour a Head estate planning Potholes to Avoid.
• 24:22
  Speaker 1: It breaks down some of the most common and costly
• 24:24
  Speaker 1: mistakes people make and explains how to help protect your assets,
• 24:28
  Speaker 1: your family and your future. Call eight sixty six eight
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  Speaker 1: copy today. That's eight sixty six eight four eight five
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  Speaker 1: six ninety nine, or you can request the guide online
• 24:39
  Speaker 1: at Legal exchange show dot com. The proceeding with paid
• 24:42
  Speaker 1: for in the views expressed are solely those of Cushing
• 24:43
  Speaker 1: and Dolan. Cushing and Dolan Intoor Armstrong Advisory may contact
• 24:46
  Speaker 1: you offering legal or investment services. Cushing and Dolan and
• 24:49
  Speaker 1: Armstrong Advisory do not endorse each other and are not
• 24:51
  Speaker 1: affiliated AHI.
• 24:52
  Speaker 7: This is Mike Armstrong from the Armstrong Advisory Group. One
• 24:55
  Speaker 7: of the biggest challenges in financial planning is seeing the
• 24:58
  Speaker 7: full picture. When your investments are b read across multiple accounts,
• 25:01
  Speaker 7: it can be difficult to know how much you actually
• 25:03
  Speaker 7: have and whether your strategy is really working. You might
• 25:06
  Speaker 7: be taking on more risk than you realize or missing
• 25:08
  Speaker 7: opportunities to better align your portfolio. Bringing your accounts together
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• 25:15
  Speaker 7: your true allocation, and make more informed decisions about your
• 25:18
  Speaker 7: financial future. Our new guide is called Consolidating Investment Accounts.
• 25:22
  Speaker 7: It walks you through how to get organized, simplify your strategy,
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  Speaker 7: and build a more complete financial plan. Call eight hundred
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  Speaker 7: three nine three for zero zero one to get your
• 25:30
  Speaker 7: free copy today. That's eight hundred three nine three four
• 25:33
  Speaker 7: zero zero one, or you can request the guide by
• 25:36
  Speaker 7: visiting Armstrong Advisory dot com.
• 25:37
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 25:40
  Speaker 1: registered investment advisor. Nothing in the ad or in any
• 25:42
  Speaker 1: Armstrong guide a specific financial, legal, or tax advice. Consult
• 25:45
  Speaker 1: your own financial, tax into state planning advisors before making
• 25:48
  Speaker 1: any investment decisions. Armstrong make contact you to offer investment
• 25:51
  Speaker 1: advisory services. It's important to update your estate plan as
• 25:55
  Speaker 1: changes occur in your life, or you can wind up
• 25:57
  Speaker 1: with significant issues that may affect your future. Get Kushian
• 26:00
  Speaker 1: Dolan's new guide called Detour Head Estate Planning Potholes to
• 26:04
  Speaker 1: avoid Call eight six six eight four eight five six
• 26:07
  Speaker 1: nine nine and get your copy today or request it
• 26:09
  Speaker 1: online at Legal Exchange Show dot com. The proceeding was
• 26:12
  Speaker 1: paid for in The views expressed are solely those of
• 26:14
  Speaker 1: cushingon Dolan. Cushing and Dolan into Armstrong Advisory may contact
• 26:17
  Speaker 1: you offering legal or investment services. Cushing and Dolan and
• 26:20
  Speaker 1: Armstrong Advisory do not endorse each other and are not affiliated. Hi.
• 26:23
  Speaker 6: I'm Michael Valila, adjudent of the Disabled American Veterans Department
• 26:26
  Speaker 6: in Massachusetts. The DAV of Massachusetts provides thousands of hours
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  Speaker 6: of voluntary services at our VA medical centers and soldiers homes,
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• 26:54
  Speaker 1: You're listening to the Legal Exchange and it's time for
• 26:57
  Speaker 1: Ask Todd, the segment where Tod will answer your questions
• 27:01
  Speaker 1: about anything and everything that's included in the estate planning process.
• 27:05
  Speaker 1: Once again, here's Todd, Lutsky and Susan Powers.
• 27:10
  Speaker 2: Welcome back Todd, We have a few questions from listeners
• 27:13
  Speaker 2: for you. First question comes from John and Wooburn, mass
• 27:15
  Speaker 2: and John writes, my wife and I created irrevocable trusts
• 27:19
  Speaker 2: and our house has been transferred into it. Most of
• 27:22
  Speaker 2: our remaining assets are in annuities, some we are taking
• 27:25
  Speaker 2: income from, and some are deferred annuities that we aren't
• 27:28
  Speaker 2: withdrawing from. Can these annuities be transferred into our irrevocable trusts?
• 27:34
  Speaker 2: And can we still receive the income?
• 27:37
  Speaker 4: All right, folks, this is a big part of your
• 27:41
  Speaker 4: estate plan, right, And I guess I would even start
• 27:44
  Speaker 4: off by saying one of the potholes to avoid is
• 27:46
  Speaker 4: making sure your trust is funded. Yes, really, which is
• 27:49
  Speaker 4: what this question is really all about. So you know,
• 27:54
  Speaker 4: what can you? I think we just need to start
• 27:56
  Speaker 4: by saying what can go in these irrevocable trusts and
• 27:58
  Speaker 4: what should not. I'm obviously not jumping up and down
• 28:01
  Speaker 4: about putting this annuity in this trust. So what can
• 28:06
  Speaker 4: go in? Would be houses, rental properties, vacation homes, put
• 28:11
  Speaker 4: them right in, yeah, no problem, Investment portfolios put them
• 28:16
  Speaker 4: in bank accounts, fine, Not so much on life insurance,
• 28:22
  Speaker 4: not so much on iras. Or qualified retirement accounts.
• 28:26
  Speaker 2: Because you'd have to pay a big tax and hard
• 28:29
  Speaker 2: stop on that.
• 28:31
  Speaker 4: Okay, so I get all that tought, But what about annuities. Well,
• 28:35
  Speaker 4: certainly if the annuity is owned inside an IRA, the
• 28:38
  Speaker 4: answer is no, and people always don't. So it's going
• 28:40
  Speaker 4: to say whether it's a qualified annuity or a non
• 28:43
  Speaker 4: qualified and Q annuity. If it's non qualified, at least
• 28:47
  Speaker 4: we know it can go in. Now, the problem with
• 28:50
  Speaker 4: putting it in is you get a new ID number,
• 28:52
  Speaker 4: and almost always the insurance company is going to trigger
• 28:58
  Speaker 4: a tax because they're going to say, when you change
• 29:01
  Speaker 4: the ID number, now we have to tax you on
• 29:04
  Speaker 4: all the built in gain, deferred growth or deferred interest,
• 29:08
  Speaker 4: whatever it is inside this annuity, and you get a
• 29:11
  Speaker 4: nasty ten ninety nine at the end of the year.
• 29:14
  Speaker 3: We don't do that.
• 29:15
  Speaker 4: We make sure we get an email from the insurance
• 29:18
  Speaker 4: company saying they won't do that because we know that
• 29:21
  Speaker 4: under the Internal Revenue Code, seventy two U of the
• 29:25
  Speaker 4: Internal Revenue Code actually says that if you transfer the
• 29:29
  Speaker 4: asset to a grand tour trust in which even though
• 29:33
  Speaker 4: there's a new ID number, the annuitant the owner is
• 29:37
  Speaker 4: still for income tax purposes the same person, so it
• 29:43
  Speaker 4: cannot trigger a taxable event.
• 29:45
  Speaker 2: Okay.
• 29:46
  Speaker 4: Just getting the new ID number alone does not do that. Okay,
• 29:50
  Speaker 4: but you got to make sure you get that email
• 29:52
  Speaker 4: from the insurance company so you have something in writing
• 29:55
  Speaker 4: to support your position.
• 29:56
  Speaker 2: And would that be whether they are just deferred annuities
• 30:00
  Speaker 2: or taking the income from is that specifically for deferred?
• 30:04
  Speaker 4: So now we got to address that piece. So now
• 30:07
  Speaker 4: we know first of all what we need to do
• 30:08
  Speaker 4: before we can even put it in. And then once
• 30:12
  Speaker 4: I would not put in an annuity that is already
• 30:15
  Speaker 4: in what they call payout.
• 30:16
  Speaker 2: Mode, okay, so that income's coming out.
• 30:19
  Speaker 4: And the reason behind that is these Medicaid income only trusts,
• 30:23
  Speaker 4: by its very name, means that the donor is only
• 30:29
  Speaker 4: entitled to the income, not principle. Well, with an annuity
• 30:35
  Speaker 4: that's in payout mode, my understanding is it's paying out
• 30:38
  Speaker 4: a portion of income and a portion of return of
• 30:41
  Speaker 4: principle correct with each payment, and there would be no
• 30:45
  Speaker 4: way to know how much is return of principle and
• 30:49
  Speaker 4: how much of each payment is income, So.
• 30:52
  Speaker 2: You'd be getting principle, which would.
• 30:54
  Speaker 4: Be violating the terms of the trust. So stay away
• 30:57
  Speaker 4: hard stop. If it's in pay out mode, do not
• 31:01
  Speaker 4: put it in. Leave it out, use it, spend it,
• 31:03
  Speaker 4: enjoy it. If it is deferred and you plan on
• 31:06
  Speaker 4: never turning it into an income stream, just liquidating it
• 31:10
  Speaker 4: at some point, then you can stick it in and let.
• 31:12
  Speaker 2: It grow after you get that letter.
• 31:14
  Speaker 3: After you get the letter, folks, don't do it otherwise.
• 31:16
  Speaker 4: So lots to think about there, and it's a great
• 31:19
  Speaker 4: really segue into this guide because that would be one
• 31:22
  Speaker 4: of the many potholes to avoid in your estate plan.
• 31:25
  Speaker 4: You think you got it done, but you haven't funded it.
• 31:27
  Speaker 4: That's a pothole. What if you're getting remarried, you've done
• 31:30
  Speaker 4: your planning, you get divorced. What if you get you
• 31:33
  Speaker 4: lose a spouse. There's things that need to be done
• 31:35
  Speaker 4: when these things happen, right, You need to check all
• 31:39
  Speaker 4: the different life events. If you haven't done your planning.
• 31:42
  Speaker 4: This is for you because it's going to tell you
• 31:44
  Speaker 4: things not to do, like don't rely on a will,
• 31:46
  Speaker 4: don't rely on joint accounts, don't rely on designated beneficiaries.
• 31:50
  Speaker 4: A nominee realty trust not a good idea, folks. There's
• 31:54
  Speaker 4: so many things to think about when you're doing your planning.
• 31:57
  Speaker 4: Don't even think your estate's too small. You don't, You
• 32:00
  Speaker 4: would be surprised how important it is.
• 32:03
  Speaker 3: Call and get the guide.
• 32:04
  Speaker 4: It's the end of the month, folks eight six six
• 32:08
  Speaker 4: eight four eight five six nine nine or Legal Exchange
• 32:12
  Speaker 4: Show dot com again eight six six eight four eight
• 32:15
  Speaker 4: five six nine nine or Legal Exchange Show dot com.
• 32:20
  Speaker 4: And you can always go to Cushion go and pc
• 32:22
  Speaker 4: our Instagram page for more.
• 32:24
  Speaker 2: Our last question comes from Jenna in Dover, mass and
• 32:27
  Speaker 2: Jenna writes, years ago, my parents transferred their home to
• 32:31
  Speaker 2: me and reserved a life estate. I have since gotten married,
• 32:34
  Speaker 2: and unfortunately I am now going through a divorce. Is
• 32:38
  Speaker 2: their home at risk? I'm terrified that my ex will
• 32:41
  Speaker 2: go after it.
• 32:41
  Speaker 3: Well, good, she should be terrified.
• 32:43
  Speaker 4: It's a good It's a terrifying experience, sure is uh?
• 32:48
  Speaker 4: And this is why this is the real reason why
• 32:51
  Speaker 4: we never well, I sent never. I only use life
• 32:54
  Speaker 4: estates three times, only in three situations. But even in
• 32:58
  Speaker 4: those three situations, I would never use the life estate
• 33:02
  Speaker 4: where I would prepare a deed conveying the property, the
• 33:06
  Speaker 4: remainder interest in the property to children right and reserving
• 33:10
  Speaker 4: a life estate and folks, I got to tell you,
• 33:12
  Speaker 4: I've actually gone so far as to have a client
• 33:14
  Speaker 4: who wanted that done, and then I told them, if
• 33:17
  Speaker 4: that's what you want, you need another lawyer.
• 33:19
  Speaker 3: I'm not going to do it.
• 33:20
  Speaker 4: It's okay for me, and I feel that strongly about it.
• 33:24
  Speaker 4: So in this case, this is the problem.
• 33:28
  Speaker 2: This is the worst case scenario, right.
• 33:30
  Speaker 4: Yeah, because you're going to get the divorce now. In
• 33:32
  Speaker 4: all fairness, at least that the parents who need to
• 33:34
  Speaker 4: have some comfort here, the parents should know that they
• 33:38
  Speaker 4: can't be.
• 33:38
  Speaker 3: Moved against the parents.
• 33:39
  Speaker 4: The creditor can't move against the parents, right, So I
• 33:43
  Speaker 4: think the parents are at least going to have the
• 33:45
  Speaker 4: right to live there and they're not going to lose
• 33:47
  Speaker 4: their ability to live there now.
• 33:49
  Speaker 2: And that's because of the life estate. So a little
• 33:51
  Speaker 2: less bad than if they had given it outright to Jenna.
• 33:54
  Speaker 4: Oh yeah, if they had given it completely away. It's
• 33:57
  Speaker 4: just that I don't know what you do, right, You're
• 34:00
  Speaker 4: just in trouble. Better better find an apartment to start renting,
• 34:05
  Speaker 4: or a.
• 34:05
  Speaker 3: Condo or something.
• 34:06
  Speaker 2: Stuff.
• 34:07
  Speaker 4: But at least this case that that nugget of ownership
• 34:10
  Speaker 4: that they kept, called the right to live there, will
• 34:14
  Speaker 4: give them that, however, a completed gift was made to
• 34:20
  Speaker 4: the kids in the form of that remainder interest, So
• 34:23
  Speaker 4: that was a completed vested transaction when they created the
• 34:28
  Speaker 4: life estate.
• 34:29
  Speaker 2: So would that be considered now marital property?
• 34:31
  Speaker 3: Todd, Yeah, I do.
• 34:33
  Speaker 4: I think this is now a vested asset of this
• 34:36
  Speaker 4: person who is now getting divorced. And so what likely
• 34:40
  Speaker 4: will happen and again again thank goodness for the parents,
• 34:44
  Speaker 4: what likely will happen is if the house is worth
• 34:46
  Speaker 4: let's say a million dollars and let's say two hundred
• 34:50
  Speaker 4: thousand based on the age of the mom and dad,
• 34:54
  Speaker 4: you know, represents their.
• 34:56
  Speaker 2: Interest, okay, the value of their of.
• 34:58
  Speaker 4: Their life estate nugget, and leaving us eight hundred thousand
• 35:04
  Speaker 4: for the child as the remainderman, and the child's getting divorced.
• 35:08
  Speaker 4: I think the way the judge might look at that
• 35:10
  Speaker 4: is say, well, four hundred thousand is yours, and four
• 35:14
  Speaker 4: hundred thousand needs to go to your soon to be
• 35:16
  Speaker 4: ex spouse. And you know, of course they don't want
• 35:20
  Speaker 4: that because you don't want to ultimately have an ex
• 35:22
  Speaker 4: spouse owning the property. So probably the way I've seen
• 35:27
  Speaker 4: this resolved is that one person might have to say, well,
• 35:31
  Speaker 4: I'm going to take four hundred thousand of other assets
• 35:35
  Speaker 4: and give that to my ex spouse in exchange for
• 35:38
  Speaker 4: keeping his four hundred thousand dollars potential piece of this remainder.
• 35:43
  Speaker 3: Interest right if you have it, if you have it right.
• 35:46
  Speaker 4: I mean, that's kind of the issue. So yeah, I
• 35:50
  Speaker 4: don't have a definitive answer. I'm just trying to give
• 35:52
  Speaker 4: you what I think might be nothing good, some kind
• 35:55
  Speaker 4: of at least a fair allocation or a fair way
• 35:58
  Speaker 4: of resolving the matter. But boy, folks, that's a pothole,
• 36:03
  Speaker 4: sure is. So speaking of potholes, don't wait to don't
• 36:06
  Speaker 4: do your planning like this, you know, call and get
• 36:09
  Speaker 4: the guy. That's the end of the month, you know,
• 36:11
  Speaker 4: learn what to do before your estate planning and learn
• 36:15
  Speaker 4: if there's been any life events and what to do
• 36:17
  Speaker 4: to fix your estate planner update it as these life
• 36:20
  Speaker 4: events occur. Eight six six eight four eight five six
• 36:25
  Speaker 4: nine to nine or Legal Exchange Show dot com. It's
• 36:28
  Speaker 4: the end of the month, so call and get it
• 36:30
  Speaker 4: eight six six eight four eight five six nine to
• 36:33
  Speaker 4: nine or Legal Exchange Show dot com and you can
• 36:37
  Speaker 4: download it right.
• 36:38
  Speaker 2: There if you have a question. You would like to
• 36:40
  Speaker 2: ask Todd, visit his website Legal Exchange Show dot com
• 36:44
  Speaker 2: and click on the ask Tod tab. Maybe I'll be
• 36:47
  Speaker 2: able to read your question on the air, and hopefully
• 36:49
  Speaker 2: his answer will stop you from becoming one of his
• 36:52
  Speaker 2: next real life stories. You've been listening to Todd Lutsky,
• 36:56
  Speaker 2: a partner with the law firm of Cushing and Dolan.
• 36:59
  Speaker 2: I'm Susan purs, a financial advisor with the Armstrong Advisory Group.
• 37:03
  Speaker 2: We'll be back with more after this quick break on
• 37:06
  Speaker 2: the Legal Exchange with Todd Lutsky.
• 37:09
  Speaker 1: Long term care costs can reach thousands of dollars per
• 37:12
  Speaker 1: month and can put a serious train on your savings.
• 37:15
  Speaker 1: The experts at Cushing and Dolan often see families caught
• 37:18
  Speaker 1: off guard by that reality. Without the right plan in place,
• 37:21
  Speaker 1: those costs can quickly eat through a lifetime of your
• 37:23
  Speaker 1: hard work. But here's the shocker. Many estate plans don't
• 37:26
  Speaker 1: protect your assets from those expenses. The right strategy may
• 37:29
  Speaker 1: involve specific types of trusts designed to help protect your assets,
• 37:33
  Speaker 1: but timing matters. Cushing and Dolan has a brand new
• 37:36
  Speaker 1: guide called Detour a head estate planning potholes to avoid
• 37:40
  Speaker 1: It breaks down some of the most common and costly
• 37:42
  Speaker 1: mistakes people make, and explains how to help protect your assets,
• 37:45
  Speaker 1: your family, and your future. Call eight sixty six eight
• 37:49
  Speaker 1: four eight five six ninety nine to get your free
• 37:51
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• 37:54
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• 37:57
  Speaker 1: at Legal exchange show dot com. The proceeding with pape
• 38:00
  Speaker 1: before in The views expressed are solely those of Cushing
• 38:01
  Speaker 1: and Dolan. Cushing and Dolan Intoor Armstrong Advisory may contact
• 38:04
  Speaker 1: you offering legal or investment services. Cushing and Dolan and
• 38:07
  Speaker 1: Armstrong Advisory do not endorse each other and are not
• 38:09
  Speaker 1: affiliated HI.
• 38:10
  Speaker 5: This is Chuck from the Armstrong Advisory Group. If your
• 38:12
  Speaker 5: financial life feels scattered, you're not alone. Over time, it's
• 38:16
  Speaker 5: easy to end up with accounts in different places, old
• 38:18
  Speaker 5: retirement plans, different banks, multiple apps. It's what we call
• 38:22
  Speaker 5: account sprawl. When you've got your money across the spectrum,
• 38:25
  Speaker 5: things can get missed, like overlapping investments, and bringing everything
• 38:29
  Speaker 5: into focus allows you to spend less time tracking accounts
• 38:32
  Speaker 5: and more time making smart decisions. Our new guide is
• 38:35
  Speaker 5: called Consolidating Investment Accounts and it may offer strategies that
• 38:39
  Speaker 5: can simplify your overall financial picture. Call eight hundred three
• 38:43
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• 38:45
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• 38:49
  Speaker 5: zero one. Where you can request the guide at Armstrong
• 38:52
  Speaker 5: Advisory dot com. That's Armstrong Advisory dot com.
• 38:55
  Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
• 38:58
  Speaker 1: registered investment advisor. Nothing in the app or in any
• 39:00
  Speaker 1: Armstrong Guide to specific financial, legal or tax advice. Consult
• 39:03
  Speaker 1: your own financial tax into state planning advisors before making
• 39:06
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• 39:09
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• 39:10
  Speaker 6: This is Michael Valila, adjudent of the Disabled American Veterans
• 39:13
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• 39:17
  Speaker 6: not their specific illness or injury. Our number one goal
• 39:20
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• 39:24
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• 39:28
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• 39:31
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• 39:34
  Speaker 6: visiting DAV five k dot Boston. That's DAV five k
• 39:39
  Speaker 6: dot Boston.
• 39:40
  Speaker 1: Long term care costs can reach thousands of dollars per
• 39:43
  Speaker 1: month and can put a serious strain on your savings.
• 39:46
  Speaker 1: The experts at Cushing and Dolan often see families caught
• 39:48
  Speaker 1: off guard by that reality. Without the right plan in place,
• 39:51
  Speaker 1: those costs can quickly eat through a lifetime of your
• 39:54
  Speaker 1: hard work. But here's the shocker. Many estate plans don't
• 39:57
  Speaker 1: protect your assets from those expenses. The right strategy may
• 40:00
  Speaker 1: involve specific types of trusts designed to help protect your assets,
• 40:04
  Speaker 1: but timing matters. Cushing and Dolan has a brand new
• 40:07
  Speaker 1: guide called Detour a Head estate planning Potholes to avoid.
• 40:10
  Speaker 1: It breaks down some of the most common and costly
• 40:13
  Speaker 1: mistakes people make and explains how to help protect your assets,
• 40:16
  Speaker 1: your family and your future. Call eight sixty six eight
• 40:20
  Speaker 1: four eight five six ninet nine to get your free
• 40:22
  Speaker 1: copy today. That's eight sixty six eight four eight five
• 40:25
  Speaker 1: six nine nine, or you can request the guide online
• 40:27
  Speaker 1: at Legal exchange show dot com. The proceeding was paid
• 40:30
  Speaker 1: for in the views express are solely those of Cushing
• 40:32
  Speaker 1: and Dolan. Cushing and Dolan, Intoor Armstrong Advisory may contact
• 40:35
  Speaker 1: you offering legal or investment services. Cushing and Dolan and
• 40:37
  Speaker 1: Armstrong Advisory do not endorse each other and are not affiliated.
• 40:41
  Speaker 1: Your tune to the Legal Exchange with Todd Lutsky. If
• 40:44
  Speaker 1: you are a loved one needs a nursing homestay, call
• 40:46
  Speaker 1: Todd right now at eight six six eight four eight
• 40:49
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• 40:51
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• 40:54
  Speaker 1: five six nine nine, or visit him online at Legal
• 40:57
  Speaker 1: Exchange show dot com.
• 41:00
  Speaker 2: Welcome back into the Legal Exchange with Todd Lutsky. I'm
• 41:03
  Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
• 41:07
  Speaker 2: and I'm joined, of course by Todd Lutsky, a partner
• 41:10
  Speaker 2: with the law firm of Cushing and Dolan with a
• 41:12
  Speaker 2: master's in taxation. Todd, it's the end of the month,
• 41:16
  Speaker 2: which I'm okay with this time because it's also the
• 41:18
  Speaker 2: beginning of the summer.
• 41:19
  Speaker 3: Yeah yay.
• 41:21
  Speaker 4: I'm hoping finally, finally, we didn't have a spring, so
• 41:24
  Speaker 4: nice to have some summer.
• 41:25
  Speaker 2: So last chance. You're a state planning potholes to avoid guide? Okay, going,
• 41:31
  Speaker 2: you know, I love to do a rapid fire session.
• 41:33
  Speaker 3: Yeah y on the end end of the month.
• 41:34
  Speaker 2: That's why I want to talk about all of the
• 41:36
  Speaker 2: potholes that are in this guide. Great So let's talk
• 41:39
  Speaker 2: about what's the pothole if you rely on your will
• 41:43
  Speaker 2: as you're only a state plan.
• 41:44
  Speaker 4: And I'm going to give you a rapid fire answer perfect.
• 41:47
  Speaker 4: A will does not avoid probate, a will does not
• 41:50
  Speaker 4: reduce your state tax liability. And a will does not
• 41:54
  Speaker 4: protect assets from a nursing home.
• 41:56
  Speaker 2: So a will is really a won't okay, so will
• 42:01
  Speaker 2: it so won't do anything for your state taxes. It'll
• 42:04
  Speaker 2: get your stuff where it wants to go eventually.
• 42:06
  Speaker 6: You're right.
• 42:07
  Speaker 3: I should have added the one benefit of the will is.
• 42:09
  Speaker 4: It's the one positive thing at least it directs where
• 42:11
  Speaker 4: your assets go when you die, and.
• 42:13
  Speaker 2: You get to go to probate and you get to
• 42:14
  Speaker 2: go from that.
• 42:15
  Speaker 3: Fabulous and sometimes in many states, and I don't.
• 42:18
  Speaker 2: Think people understand the extent to which probate can be.
• 42:22
  Speaker 4: Like a nine month long root canal, that's it's nine months.
• 42:26
  Speaker 4: Nine months is when a tax return is due. You
• 42:28
  Speaker 4: actually have twelve months for the probate. You got to
• 42:30
  Speaker 4: close a year long route can Yeah, people confuse the
• 42:33
  Speaker 4: nine months with the with the probe, with the probate,
• 42:36
  Speaker 4: the tax filing deadline with the probate deadline.
• 42:38
  Speaker 2: And if you go down the path of creating a
• 42:40
  Speaker 2: trust instead, whether it's revocable or irrevocable as opposed to
• 42:44
  Speaker 2: a will, you can check off all those boxes, right.
• 42:48
  Speaker 4: Yeah, So if you have the revocable or the irrevocable,
• 42:52
  Speaker 4: well there's a little bit of a difference. So the
• 42:53
  Speaker 4: revocable is going to avoid the probate. M it's going
• 42:56
  Speaker 4: to check off a state tax reduction or possible in
• 43:00
  Speaker 4: many cases, elimination love that state taxes. It's going to
• 43:04
  Speaker 4: provide probably a much better bloodline plan control from the
• 43:08
  Speaker 4: grave that you could ever do with a will and
• 43:12
  Speaker 4: keep you in complete control. But the irrevocable trust no probate,
• 43:16
  Speaker 4: and I started with that eliminates probate. With the irrevocable trust,
• 43:21
  Speaker 4: it avoids the probate. It can also reduce or in
• 43:25
  Speaker 4: most cases some cases eliminate federal and state estate taxes.
• 43:29
  Speaker 4: Can also provide that control from the grave, asset protection
• 43:33
  Speaker 4: for the children, divorce proofing as well, and it adds
• 43:40
  Speaker 4: protecting assets from the nursing home after the five year
• 43:43
  Speaker 4: lookback period.
• 43:43
  Speaker 3: So very similar things.
• 43:46
  Speaker 4: Both way better than a will one, just adding an
• 43:49
  Speaker 4: additional level of benefits that the irrevocable trust provides that
• 43:54
  Speaker 4: they're revocable, does not perfect.
• 43:56
  Speaker 2: Okay, The next one you have in here is creating
• 43:58
  Speaker 2: a trust ten plus us years ago and assuming it
• 44:02
  Speaker 2: still meets your goals and objectives.
• 44:04
  Speaker 4: I'm older now, I've my assets might have grown or shrunk,
• 44:09
  Speaker 4: depending on that, as the case may be. And maybe
• 44:12
  Speaker 4: I did a revocable trust and now I need to
• 44:14
  Speaker 4: switch to an irrevocable trust.
• 44:15
  Speaker 3: This is why reviewing your plan could be very important.
• 44:19
  Speaker 2: And it's all of those life events that can happen
• 44:21
  Speaker 2: along change.
• 44:23
  Speaker 4: You know, you might need to check that and and
• 44:26
  Speaker 4: oh and the life events situation. Yeah, you could lose
• 44:29
  Speaker 4: a spouse. Now you need to you know, zip back
• 44:31
  Speaker 4: and say, what do I do? I've got one spouse
• 44:33
  Speaker 4: who's died. What if I want to, you know, change up,
• 44:37
  Speaker 4: change residencies? You know, do I have to fix something there?
• 44:41
  Speaker 4: What if I you know, I've got a fiduciary who died.
• 44:44
  Speaker 4: What if I want to fix that? Maybe now I've
• 44:46
  Speaker 4: got a disabled beneficiary that I didn't have before.
• 44:48
  Speaker 2: You need to do special needs trust planning exactly.
• 44:51
  Speaker 4: Right a special needs trust comes up. Or if you
• 44:53
  Speaker 4: just want to change your mind, change your mind. Yeah,
• 44:55
  Speaker 4: I mean there's so many things to think about remarriage, uh,
• 44:59
  Speaker 4: et cetera. Yeah, folks, those are just some We got
• 45:02
  Speaker 4: more to get through. But these are all things listed
• 45:05
  Speaker 4: in the estate Planning Potholes Guide to avoid. It is
• 45:08
  Speaker 4: the end of the month, call and get it. These
• 45:10
  Speaker 4: are things to think about. Whether you've done your planning
• 45:13
  Speaker 4: and have a life event that changed, you need to
• 45:16
  Speaker 4: see how that affects your plan, or whether just many
• 45:19
  Speaker 4: years have gone by if you've not done your planning.
• 45:23
  Speaker 4: This is a great guy to figure out, well, what
• 45:25
  Speaker 4: should I be doing to make sure I don't have
• 45:28
  Speaker 4: problems in the future. These are some things to avoid
• 45:31
  Speaker 4: in creating your estate plan. Something for everyone. End of
• 45:35
  Speaker 4: the month, folks, call and get it eight six six
• 45:38
  Speaker 4: eight four eight five six nine nine or Legal Exchange
• 45:42
  Speaker 4: Show dot com. Get off the dime eight six six
• 45:46
  Speaker 4: eight four eight five six nine nine or Legal Exchange
• 45:50
  Speaker 4: Show dot com. And you can always go to Cushing
• 45:52
  Speaker 4: dolean PC our Instagram page for more information.
• 45:56
  Speaker 2: This is a big one, sire away. Assuming your trust
• 45:59
  Speaker 2: has been fun oh funded, yeah, well that can be
• 46:02
  Speaker 2: quite a down.
• 46:03
  Speaker 3: Please don't.
• 46:04
  Speaker 4: That's probably the biggest mistake I spent all this money.
• 46:06
  Speaker 4: I did my planning, and you know what, nothing is
• 46:09
  Speaker 4: titled to the document.
• 46:11
  Speaker 2: And I know at Cushian Dolan, you guys always move
• 46:14
  Speaker 2: the real estate and you prepare those deeds right when
• 46:16
  Speaker 2: they're signing their trust. You work with advisors like us
• 46:19
  Speaker 2: and others relutely to get those investment accounts in. But
• 46:22
  Speaker 2: there are some things that the client has to do
• 46:25
  Speaker 2: to get that funded.
• 46:26
  Speaker 4: There is, so if they're working with the attorney and
• 46:30
  Speaker 4: the advisors, that's pretty easy. You know, we're going to
• 46:32
  Speaker 4: send the trust over to the advisor. We're going to
• 46:34
  Speaker 4: send the language, the verbiage that needs to go on
• 46:37
  Speaker 4: the document. All they need to do is sign. Hopefully
• 46:39
  Speaker 4: the advisor will say here, sign here and put it in.
• 46:43
  Speaker 4: We will have recorded the deeds for them. So that's
• 46:45
  Speaker 4: all done.
• 46:46
  Speaker 3: Homeowners insurance is a big one you got to make.
• 46:48
  Speaker 4: You know, lots of times we can't talk to the
• 46:50
  Speaker 4: homeowners insurance people right away. They have to get that
• 46:53
  Speaker 4: ball rolling by talking with their agent to add the
• 46:56
  Speaker 4: trust as an additional insured. So that's a that's a
• 46:59
  Speaker 4: big one that many people overlook, right, but please don't
• 47:03
  Speaker 4: get that done. So yeah, mostly everything can be done
• 47:06
  Speaker 4: changing beneficiaries on iras. They can work with their advisor
• 47:09
  Speaker 4: on that. Again, we'll give the verbiage, so please fund
• 47:14
  Speaker 4: the trust.
• 47:15
  Speaker 2: Here's one that could be quite a surprise when you
• 47:18
  Speaker 2: pass away is relocating from Massachusetts to an estate tax
• 47:23
  Speaker 2: re state like Florida or New Hampshire and assuming your
• 47:26
  Speaker 2: estate will not owe Massachusetts a state tax.
• 47:30
  Speaker 3: Yeah, folks.
• 47:31
  Speaker 4: The best way to describe this as a seminar that
• 47:33
  Speaker 4: I did a few years ago, actually a year ago,
• 47:36
  Speaker 4: where I said the name of the seminar was, so
• 47:39
  Speaker 4: you think you changed your residency. Doesn't always work so well, folks.
• 47:43
  Speaker 4: You got to make sure you take steps to make
• 47:46
  Speaker 4: sure that Massachusetts is not going to tax you. The
• 47:49
  Speaker 4: biggest step is if you become a non resident but
• 47:52
  Speaker 4: left property in Massachusetts, Massachusetts will tax you on real
• 47:58
  Speaker 4: estate in Massachusetts as a non resident. Be careful, get
• 48:02
  Speaker 4: that into an LLC in Massachusetts.
• 48:06
  Speaker 3: Extra step.
• 48:07
  Speaker 4: But by putting it in an LLC, you converted to
• 48:10
  Speaker 4: an intangible and Massachusetts cannot tax non residents on intangibles.
• 48:16
  Speaker 3: They can.
• 48:17
  Speaker 4: They can tax residents on intangibles and tangibles and intangibles
• 48:21
  Speaker 4: like Fidelity account, a stock account. They can't for non residents.
• 48:27
  Speaker 4: And if you convert it that real estate into an LLC,
• 48:30
  Speaker 4: you converted it from a real estate to stock in
• 48:33
  Speaker 4: an LLC, and now it's it's an intangible and not
• 48:36
  Speaker 4: taxable in mass. But there's a whole list of other
• 48:39
  Speaker 4: things you need to do when you change your residence.
• 48:41
  Speaker 4: We don't even have time for it today.
• 48:43
  Speaker 2: How about empty and your spouse's trust when they pass away.
• 48:47
  Speaker 4: Oh my gosh, this would be the worst possible solution
• 48:50
  Speaker 4: you could ever come up with. First of all, it's
• 48:52
  Speaker 4: not permitted, so you'd be violating fiduciary duties because it
• 48:55
  Speaker 4: doesn't allow it to even happen.
• 48:58
  Speaker 3: But I've seen it. Oh yeah, call you.
• 49:00
  Speaker 4: But my husband died and I didn't think anything needed
• 49:02
  Speaker 4: to be done. But I always remembered I'm supposed to
• 49:04
  Speaker 4: just take everything for my husband's trust and put it
• 49:06
  Speaker 4: in my trust, misremembering.
• 49:08
  Speaker 3: Oh you misremembering. You never heard that.
• 49:10
  Speaker 4: So that's a really complicated That would really destroy your
• 49:14
  Speaker 4: estate plan because now you've wasted the ability to shelter
• 49:18
  Speaker 4: assets on the first death.
• 49:20
  Speaker 2: So really big there goes that A state tax elimination, Yeah,
• 49:23
  Speaker 2: really big problem. How about not filing a separate trust
• 49:26
  Speaker 2: tax return during life and after death.
• 49:30
  Speaker 4: So yeah, that's important too, because during life, if you
• 49:33
  Speaker 4: have an irrevocable revocable you won't need to file tax returns.
• 49:38
  Speaker 4: But what then irrevocable You might need to file an
• 49:41
  Speaker 4: income tax return for the trust while you're alive, and
• 49:46
  Speaker 4: then when you died a different trust income tax return
• 49:50
  Speaker 4: is required because it's no longer a grant to our trust.
• 49:52
  Speaker 2: Got it.
• 49:53
  Speaker 4: And if it's a revocable trust when you're alive and
• 49:55
  Speaker 4: then you die, it becomes an irrevocable trust, and now
• 49:58
  Speaker 4: you have to start filing income tax returns for the
• 50:03
  Speaker 4: revoc the once revocable trust.
• 50:05
  Speaker 2: Call your attorney.
• 50:07
  Speaker 3: Someone dies, Please call the attorney.
• 50:09
  Speaker 2: We didn't get the game are but they're all in
• 50:11
  Speaker 2: the guide.
• 50:12
  Speaker 4: There's more, much more in the guide, folks. It's the
• 50:15
  Speaker 4: end of the month, call and get it. I hope
• 50:17
  Speaker 4: you got a flavor of all the things that could
• 50:19
  Speaker 4: be thinking about when you're doing your estate plan eight
• 50:23
  Speaker 4: six six eight four eight five six ninety nine or
• 50:27
  Speaker 4: Legal Exchange show dot Com. Again, this was a flavor
• 50:30
  Speaker 4: of how many things to be thinking about. Get the
• 50:33
  Speaker 4: guide to understand them all. Eight six six eight, four, eight, five, six,
• 50:39
  Speaker 4: nine nine, or go to our website Legal Exchange show
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  Speaker 2: Todd Lutsky from the law firm of Cushing and Dolan,
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  Speaker 2: thank you so much.
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  Speaker 3: Thank you, Susan. Always a pleasure.
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  Speaker 2: I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
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  Speaker 2: We thank you for joining us today and we'll be
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  Speaker 2: back again next week on the Legal Exchange with Todd Lutsky.
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  Speaker 1: Long term care costs can reach thousands of dollars per
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