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Ask Todd: Understanding the basic estate planning documents · The Financial Exchange Show

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  Speaker 1: This is Ask Todd on the Financial Exchange Radio Network.
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  Speaker 1: If you have an existing estate plan or in the
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  Speaker 1: market for one, Todd Lutsky is here to answer your
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  Speaker 1: questions and help you plan for later life. Ask Todd
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  Speaker 1: is presented by Cushing and Dolan, serving Massachusetts and New
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  Speaker 1: England for more than thirty five years, helping families with
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  Speaker 1: a state and tax planning, medicaid planning, and probate law.
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  Speaker 1: Visit Cushingdolan dot com. Now here's Todd Lutsky.
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  Speaker 2: Every Wednesday, we're joined by Todd Lutsky from Cushion Dolan
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  Speaker 2: for a weekly segment of Ask Todd. For any of
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  Speaker 2: you out there who have any estate planning questions, whether
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  Speaker 2: it's regarding estate taxes, Medicaid, probate, a voids, give our
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  Speaker 2: studio linea call at eight eight eight two zero five
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  Speaker 2: two two sixty three. Again that number for any of
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  Speaker 2: your questions out there. Eight eight eight to zero five
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  Speaker 2: two two six ' three. Todd. How we doing today?
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  Speaker 3: I am never better in you.
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  Speaker 2: Doing quite well?
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  Speaker 1: Todd.
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  Speaker 2: Question four for folks out there, one of the basic
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  Speaker 2: tackling blocks for an estatement and oftentimes is avoiding probate
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  Speaker 2: and I was wondering if you could just kind of
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  Speaker 2: give the listeners a sense for what types of the
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  Speaker 2: assets may be probatable and the impact it would have
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  Speaker 2: on their airs if their assets were to go to
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  Speaker 2: probate because they had not done a proper estate plan.
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  Speaker 3: Yeah, and I think I'm going to answer that in
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  Speaker 3: line with the guide that we're given away this month,
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  Speaker 3: which is back to the basics, because in that guide,
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  Speaker 3: one of the things it talks about a lot is
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  Speaker 3: the basic documents in addition to the trust that's involved
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  Speaker 3: in that particular guide, but it really spends the time
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  Speaker 3: we need on basic documents like a will, a healthcare proxy,
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  Speaker 3: a power of attorney, a living will, a hip of form.
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  Speaker 3: These are basic docs that don't get as much attention.
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  Speaker 3: I say that because probate and the will go hand
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  Speaker 3: in hand, and since your question is on probate, I
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  Speaker 3: can tell you first and foremost that, folks, but do
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  Speaker 3: a will. Please don't think that that's an estate plan.
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  Speaker 3: They think it is. They come in they say, I've
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  Speaker 3: got my estate planning all done. I got a will. Well,
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  Speaker 3: it's better than nothing. I can certainly tell you the
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  Speaker 3: will at least will ensure your assets go where you
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  Speaker 3: want them to go and how and when they're going
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  Speaker 3: to get there. However, I like to tell people that
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  Speaker 3: a wills won't because what it won't do is it
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  Speaker 3: won't avoid probate, which I'm going to get to them.
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  Speaker 3: I know I'm getting there, but it won't avoid probate.
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  Speaker 3: It also won't reduce your estate tax. So if you're
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  Speaker 3: married and you leave assets to each other in a
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  Speaker 3: simple will, you didn't do anything to reduce your estate
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  Speaker 3: tax liability, so not a probate avoidance deal and not
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  Speaker 3: an estate tax savings. And if one of your goals
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  Speaker 3: is to protect assets from the cost of long term care,
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  Speaker 3: also a will won't do that. So those are generally
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  Speaker 3: things that are used to make up an entire estate plan,
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  Speaker 3: and the will misses all of them. Now, the big
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  Speaker 3: thing it misses is it's the only document that has
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  Speaker 3: to be filed at the probate court. And when you
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  Speaker 3: get into probate, you now are looking at about a
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  Speaker 3: year long process. Number one. Number two, it's costly, right,
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  Speaker 3: you've got to file things, and it's not even the
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  Speaker 3: filing fees so much, folks, As it is likely you're
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  Speaker 3: going to hire a lawyer and it's the legal fees
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  Speaker 3: that you're dealing with for the next year when you
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  Speaker 3: go through the process and it actually appoints an executor
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  Speaker 3: or a personal representative, who, by the way, has no
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  Speaker 3: power until you're actually appointed. So please don't think just
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  Speaker 3: because you're listed that you're automatically the pr You've got
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  Speaker 3: to go through filing a petition at the court notifying
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  Speaker 3: all the heirs at law so they have an opportunity
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  Speaker 3: to object to you being appointed. And then finally when
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  Speaker 3: you get a return date to the court, now you're appointed.
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  Speaker 3: And only after you're appointed can you run to that
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  Speaker 3: bank or to that brokerage account And with the petition
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  Speaker 3: or the appointment from the court in one hand and
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  Speaker 3: the death certificate in the other, will you be able
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  Speaker 3: to finally access that money or sell a piece of
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  Speaker 3: property or move real estate. So it doesn't happen right away.
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  Speaker 3: So that's a good sixty to ninety days just to
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  Speaker 3: do that right, And then of course there's inventories and
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  Speaker 3: accountings and on and on we go, folks. But I
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  Speaker 3: hope that gives you a little flavor of why you
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  Speaker 3: don't want to be there.
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  Speaker 2: I've seen it with clients that I've dealt with firsthand,
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  Speaker 2: going through that probate process, like you mentioned, just a
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  Speaker 2: real administrative burdens, so it's important to try your best
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  Speaker 2: to avoid that. We're going to take a quick break here,
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  Speaker 2: but if you have any questions for Todd Lutsky here
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  Speaker 2: from Cushion Dolan, give our cell our studel Lina, call
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  Speaker 2: it eight eight eight two zero five two to two
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  Speaker 2: sixty three. Again, anything in the estate planning realm, any
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  Speaker 2: questions you may have, give our studel Ana call eight
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  Speaker 2: eight eight two zero five two to two sixty three.
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  Speaker 2: When we come back from break your questions next with
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  Speaker 2: Todd Lutsky.
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  Speaker 1: Ask Todd with Todd lets every Wednesday at ten thirty
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  Speaker 1: only here on the Financial Exchange Radio Network. You're listening
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  Speaker 1: to Ask Todd with Todd Lutsky on the Financial Exchange
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  Speaker 1: Radio Network.
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  Speaker 2: Coming back from break here, we're here with Todd Lutsky
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  Speaker 2: from Cushian Dolan. For any of your estate planning questions,
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  Speaker 2: give us a call at eighty eight two zero five
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  Speaker 2: two two sixty three. We're gonna go to our first caller,
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  Speaker 2: John and Waterbury, Connecticut. You're on with Todd Lutsky.
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  Speaker 4: Hi does Connecticut accept handwritten wills.
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  Speaker 3: Hand written wills, well, I don't think it's the handwriting
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  Speaker 3: that matters. I think what matters is that it has
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  Speaker 3: the testamentary language that you need in it, Like it
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  Speaker 3: needs to have in the very beginning language that says
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  Speaker 3: I hereby revoke all former wills, right, all prior wills.
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  Speaker 3: So that needs to be in there. Whether that is
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  Speaker 3: typed or whether you hand wrote it, I don't believe matters. Now,
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  Speaker 3: I'm going to give you that as sort of a
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  Speaker 3: with a grain of salt, because I don't know off
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  Speaker 3: the top of my head. I'm just going to give
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  Speaker 3: you what I think the legal requirements of a will are.
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  Speaker 3: I've never heard that a will has to be typed
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  Speaker 3: in order for it to be valid. I mean, think
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  Speaker 3: about wills that existed before we had typewriters. I mean
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  Speaker 3: they did, they were handwritten, and they worked. So I
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  Speaker 3: think you just need to make sure that the will
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  Speaker 3: has the testamentary language. That's number one. Number two probably
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  Speaker 3: is going to need at least two witnesses and likely
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  Speaker 3: a notary. So you got to have at the end
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  Speaker 3: the notary and the two witnesses. So that has to
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  Speaker 3: be in there, So I think if you can get
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  Speaker 3: those kinds of things, and usually there's a self proving
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  Speaker 3: affidavid language at the end as well. So as long
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  Speaker 3: as you've got that requirement or any other Connecticut, because folks,
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  Speaker 3: I say this, every state might have a few different
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  Speaker 3: rules as to what makes up a valid will in
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  Speaker 3: that state, so please look to your state. But I
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  Speaker 3: do think as long as you have those requirements that
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  Speaker 3: make a will a will, then it's valid. Whether it's
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  Speaker 3: typed or handwritten, I don't think is the determining factor
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  Speaker 3: for making it a valid will. Great question though, and
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  Speaker 3: it does go back to this guide, which is back
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  Speaker 3: to the basics right. It does talk about all of
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  Speaker 3: the basic documents in detail, wills, healthcare proxies, powers of attorney, hipoforms,
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  Speaker 3: living wills. It also gives you an idea about how
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  Speaker 3: to pick a lawyer. It talks about what to think
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  Speaker 3: about when you're doing your estate plan, how much you're worth,
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  Speaker 3: valuing your assets, family dynamics, you know, all things that
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  Speaker 3: you need to think about. And then it's basically my
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  Speaker 3: lead recommendation to a made up family with made up
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  Speaker 3: family dynamics and assets. And then I give the description
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  Speaker 3: as to exactly how to accomplish all of their estate
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  Speaker 3: planning needs culminating with an irrevocable trust. So get the guide.
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  Speaker 3: It'll help you get started at a bare minimum. And
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  Speaker 3: who knows, when you put your family situation into this
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  Speaker 3: fact pattern, maybe this is actually a recommendation for you.
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  Speaker 3: Call and get the guide eight six six eight four
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  Speaker 3: eight five six nine nine or Legal Exchange Show dot com.
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  Speaker 3: Back to the basics eight six six eight four eight
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  Speaker 3: five six nine nine or Legal Exchange Show dot com.
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  Speaker 2: We're gonna go to our second caller here, Mike in Boston.
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  Speaker 2: You're on with Todd Lutsky.
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  Speaker 5: How you doing, Todd. My name is Mike. I'm in Boston.
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  Speaker 5: My family, my parents put together a real estate portfolio
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  Speaker 5: which they put into irrevocable trust. My father passed away
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  Speaker 5: and now it's my mom, my brother, and I and
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  Speaker 5: Suppress Press. My brother and I do not get along
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  Speaker 5: in that way, and we're inheriting these properties in the trust,
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  Speaker 5: and we're both concerned about how the the business, the
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  Speaker 5: real estate portfolio is run after my mom passes, and
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  Speaker 5: so I'm concerned about you know him, he's concerned about me.
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  Speaker 5: Is it important? Is my best option to put into
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  Speaker 5: place a what I'm calling a non biased trustee member
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  Speaker 5: to oversee the trust and kind of manage the funds,
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  Speaker 5: and and then the importance of getting an operating agreement
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  Speaker 5: to kind of pull each other account of.
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  Speaker 3: So let me ask you this is are all these
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  Speaker 3: docs are all these rental properties in an LLC?
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  Speaker 5: They're currently not, but the firm that we've hired is
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  Speaker 5: pushing to get them into LLCs.
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  Speaker 3: So I would think an LLC is a good idea.
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  Speaker 3: And I think the shares of and maybe multiple LLCs,
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  Speaker 3: I don't mean to say one, and then all of
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  Speaker 3: the shares themselves should be owned in these irrevocable trusts.
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  Speaker 3: If that's what they've chosen. Irrevocable, I don't. I don't
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  Speaker 3: know if that's the right way to go or not.
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  Speaker 3: But doesn't matter because you're concerned more about what happens
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  Speaker 3: when they both pass, and the trust of course at
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  Speaker 3: that point will be irrevocable. I wouldn't jump to the
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  Speaker 3: conclusion that you need to get an independent trustee right away.
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  Speaker 3: The most important thing is that you guys decide, and
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  Speaker 3: you're going to have to talk to each other to
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  Speaker 3: decide what you want to do. You got to read
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  Speaker 3: the document to see. Does it say divide the property
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  Speaker 3: and pay it out to you kids and walk away.
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  Speaker 3: Does it say hold it in trust for your lives,
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  Speaker 3: in discretionary trust for your lives, and then you've got
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  Speaker 3: to run and manage the company. I don't know. You
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  Speaker 3: need to read the document to see what it says.
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  Speaker 3: If it says divide it, pay it out, walk away.
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  Speaker 3: Our trusts usually have language it says, look property sold
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  Speaker 3: unless you all want it. Well, if you both don't
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  Speaker 3: want them, then it's going to be sold. And if
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  Speaker 3: one wants it and one doesn't, then the one who
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  Speaker 3: wants it can buy out the one who doesn't at
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  Speaker 3: fair market value. So again, fighting or not, you're gonna
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  Speaker 3: be able to at least get past that walk away
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  Speaker 3: with what you want.
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  Speaker 1: Right.
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  Speaker 3: Maybe they don't want to be. Maybe one brother says,
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  Speaker 3: I just want the dough. Okay, Well you have to
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  Speaker 3: arrange to have it purchased and bought out. So I
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  Speaker 3: would look to try to not cause any more fighting
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  Speaker 3: to say, Look, from a selfish standpoint, we're both working
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  Speaker 3: towards the same goal. You get what you're supposed to get.
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  Speaker 3: I get what I'm supposed to get and we don't
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  Speaker 3: have to work together. If we want to work together, yeah,
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  Speaker 3: I would have it in an LLC, and you guys
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  Speaker 3: should be managers of your own your own buildings, and
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  Speaker 3: you're in and sit back and collect rent and just say, hey,
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  Speaker 3: we're just going to not be friendly, but we're just
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  Speaker 3: going to be, you know, business partners, and money will
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  Speaker 3: come in and half will go to each of you
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  Speaker 3: and and that'll be the end of it. So I
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  Speaker 3: don't think there's a separate agreement you can have that
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  Speaker 3: says you're not going to fight, so that that isn't
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  Speaker 3: gonna work. I think you just need to work through
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  Speaker 3: it and look at what the document says first and
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  Speaker 3: foremost and take it from there. But I do like
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  Speaker 3: the fact that they've done some planning, so I hope
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  Speaker 3: that helps a little.
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  Speaker 2: We're gonna go to our last caller here, Mary and Waltham.
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  Speaker 2: You're on with Todd Lusky.
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  Speaker 4: Hello, my other ponent is ringing. I hope it isn't
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  Speaker 4: sturb via. I'm calling actually on my brother's piet. He
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  Speaker 4: goes with his wife but they don't get along, and
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  Speaker 4: two of their three adult sons goes with them, but
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  Speaker 4: he wants to have a separate will so that, you know,
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  Speaker 4: if he passes first, the house could be possibly split
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  Speaker 4: to so that the wife doesn't get the whole asset.
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  Speaker 4: He wants some to go to the wife and the
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  Speaker 4: three sons and the house these souls because he said,
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  Speaker 4: when these sons eventually inherited, say, I'm not good with money,
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  Speaker 4: and they would probably lose the house. So is there
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  Speaker 4: a way he can do a separate will when there's
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  Speaker 4: the house involved?
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  Speaker 3: So if their marriage still and it sounds like they
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  Speaker 3: are married, correct, Yeah, so you can't technically disinherit your spouse.
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  Speaker 3: I mean there's always a forced airship that allows them
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  Speaker 3: to get some amount. Now, as long as you provide
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  Speaker 3: an amount equal to the amount they would get under
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  Speaker 3: the forced share, it's probably going to be okay. So
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  Speaker 3: do we do separate wills? Well, you always do separate
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  Speaker 3: wills when you're married, one for husband, one for wife.
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  Speaker 3: I think what they need is way more than a will.
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  Speaker 3: I think they need a trust, and I think the
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  Speaker 3: trust needs to be designed, you know, to take care
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  Speaker 3: of the spouse. But by the same token as you said,
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  Speaker 3: maybe you know, not just give it to her if
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  Speaker 3: that's the case, and therefore provide for it. And I
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  Speaker 3: assume these are their own kids. It's not a second marriage, right, yes, right,
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  Speaker 3: So they're each going to want to take care of
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  Speaker 3: their kids anyway, so this will provide for it. And
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  Speaker 3: I probably would have language in the trust again, not
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  Speaker 3: just a will, but a trust that not only protects
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  Speaker 3: it from potential nursing home claims and taxes, but that
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  Speaker 3: it could hold it in trust for these children who
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  Speaker 3: might not be great with money, as you said, and
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  Speaker 3: if need be, the trustees could always sell the house
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  Speaker 3: the money could go in, and then the money could
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  Speaker 3: be used to take care of these children with discretionary
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  Speaker 3: distributions for their needs, their health, their education, welfare support,
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  Speaker 3: you know, so that it stretches out the money a
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  Speaker 3: little bit so that it can be used to better
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  Speaker 3: their life rather than just you know, dump it in
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  Speaker 3: their hands, and then that could cause way more harm
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  Speaker 3: than good. So I think they're going to need to
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  Speaker 3: do a little bit more than separate wills. I think
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  Speaker 3: they should sit with a lawyer and learn how a
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  Speaker 3: trust can really take care of both of them. And
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  Speaker 3: they don't need to really be angry with each other
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  Speaker 3: when they're doing this estate plan because the common goal
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  Speaker 3: was the kids here.
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  Speaker 2: Absolutely, Todd, thanks so much for taking time with us
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  Speaker 2: this week. Happy early birthday to you.
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  Speaker 3: Oh thank you. Always a pleasure.
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  Speaker 1: This has been asked on on the Financial Exchange Radio network.
• 14:54
  Speaker 1: Askedd with Todd Ludskey has been presented by Cushing and Dolan,
• 14:58
  Speaker 1: serving Massachusetts and New England for more than in thirty years,
• 15:00
  Speaker 1: helping families with the state and tax planning, Medicaid planning,
• 15:03
  Speaker 1: and probate law. Call eight hundred three nine three four
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  Speaker 1: thousand one or visit Cushingdolan dot com. The views expressed
• 15:10
  Speaker 1: in this segment are solely those of Cushing and Dolan
• 15:12
  Speaker 1: Armstrong Advisory. He does not provide any legal or tax advice.
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  Speaker 1: Please consult with your illegal or tax advisor on such matters.
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  Speaker 1: Cushing and Armstrong do not endorse each other and are
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  Speaker 1: not affiliated