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Naming your ex-spouse as a beneficiary · The Legal Exchange

0:01
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
0:10
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
0:16
Speaker 1: need assistance in any of these areas, or have a
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Speaker 1: question about another issue that may affect your future, call
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Speaker 1: eight six six eight four eight five six ninety nine
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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.
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Speaker 2: Welcome into the Legal Exchange with Todd Lutsky. I'm Susan Powers,
0:40
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
0:46
Speaker 2: of Cushing and Dolan with a master's in taxation. Welcome Todd,
0:51
Speaker 2: How are you today?
0:52
Speaker 3: I am never better in you.
0:54
Speaker 2: I'm great? Thank you? What do you have for us
0:56
Speaker 2: this week?
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Speaker 3: Couple of things? Got a Louisiana appellate court case and
1:00
Speaker 3: head over to California, so we're all over the country.
1:03
Speaker 3: First one is you know, basically, you know, when you
1:06
Speaker 3: name your ex wife a beneficiary of an IRA, is
1:10
Speaker 3: is that okay? Basically you'll see the update. Yeah, you'll
1:15
Speaker 3: see here how these this couple was married for about
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Speaker 3: thirty years, got divorced and you know, had agreements and everything,
1:21
Speaker 3: but you know, there's automatic revocation statutes and nevertheless, the
1:26
Speaker 3: ex wife is the beneficiary on the IRA and we'll
1:29
Speaker 3: find out how that how that plays out when when
1:32
Speaker 3: the participant dies, So stay tuned for that and of
1:38
Speaker 3: course how that could be fixed in better state planning world.
1:44
Speaker 3: And then we're gonna head over to California. We got
1:45
Speaker 3: an appellate court case there and it's basically, you know,
1:48
Speaker 3: how do you revoke a will? In this case, a
1:52
Speaker 3: holographic will was prepared and I'll have to explain what
1:54
Speaker 3: that is, Star Treking holographic will. And then the traffic
2:00
Speaker 3: will got revoked. But did it really get revoked? And
2:04
Speaker 3: we'll see how it maybe did or didn't. And again,
2:07
Speaker 3: it's not all about the results of these cases. It's
2:09
Speaker 3: about what you can do to not be in this problem.
2:13
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3:34
Speaker 3: You can download it right there. Let's head over to Louisiana.
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Speaker 3: So in this case, we've got you know, Jim and Jackie.
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Speaker 3: They're married for thirty years before they get a divorce.
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Speaker 3: In May of twenty fifteen, they did a partition in
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Speaker 3: a community property agreement in which they agreed to transfer
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Speaker 3: and assign any interest they had in any each other's property.
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Speaker 2: Okay, it back completely to the other. Yeah, okay.
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Speaker 3: So James then later died, and of course during his
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Speaker 3: estate administration, the executor discovered Jackie was listed this is
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Speaker 3: the ex wife. Jackie was listed as the designated beneficiary
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Speaker 3: on several iras and annuities. Well, the estate decided to
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Speaker 3: sue Jackie and the life insurance company to prevent the
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Speaker 3: distribution of the IRA and annuities to and to declare
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Speaker 3: that the estate is the lawful beneficiary, not Jackie the
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Speaker 3: ex wife. Correct. Well, arguments were made through the process
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Speaker 3: and they did discover that three of the accounts really
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Speaker 3: did belong to the estate. However, the estate pushed for
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Speaker 3: the IRA, saying that the IRA, under Minnesota law, there's
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Speaker 3: an automatic revocation statute of beneficiaries when you get a divorce. Therefore,
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Speaker 3: it invalidated the designated beneficiary form listing Jackie. Jackie said, no,
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Speaker 3: that's not true, because these forms were completed post divorce. Therefore,
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Speaker 3: this constitutes a redesignation of the beneficiary. Now, the lower
5:10
Speaker 3: court wasn't having any of that. They granted summary judgment
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Speaker 3: in favor of the estate. Yeah, Jackie wasn't happy. No,
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Speaker 3: so Jackie appealed in the appellate court.
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Speaker 2: Reversed, Good, it sounds like they should.
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Speaker 3: And they said, while there is an automatic revocation statute
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Speaker 3: the designated beneficiary of a spouse following a divorce, the
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Speaker 3: holder of the IRA can redesignate the ex spouse or
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Speaker 3: anybody as a designated beneficiary. Therefore, this new designated beneficiary
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Speaker 3: form is not revoked, and the estate goes to Jackie
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Speaker 3: or the IRA goes to Jackie. I think ultimately that's
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Speaker 3: the right result.
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Speaker 2: I agree.
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Speaker 3: I'm scratching my head wondering how on earth you know
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Speaker 3: Jim in this case decided to re sign a designated
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Speaker 3: beneficiary form naming his ex wife after a divorce.
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Speaker 2: Well, you know, it's interesting. I have a client that
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Speaker 2: did the exact same thing. He was divorced, and he
6:19
Speaker 2: was still friendly with his wife, his ex wife his
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Speaker 2: new wife, and he wanted to name them both as
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Speaker 2: beneficiaries on an account. And I took copious notes that
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Speaker 2: Damn'm like, really you want to do this? And I
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Speaker 2: took goodness because he wanted to do it. They were
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Speaker 2: friendly and he wanted to take care.
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Speaker 3: Of her too, And that's perfectly okay then, And that's
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Speaker 3: why the statute allows for that kind of activity, you know.
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Speaker 3: And again, it's not always about the result of these cases,
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Speaker 3: whether we like him or not. For us, it's the
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Speaker 3: tips and lessons that we can learn from them. And
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Speaker 3: I think in this case there's a lot to think about. Really.
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Speaker 3: It's what I got from this is when should I
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Speaker 3: be reviewing my est ap plan.
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Speaker 2: And so life events? Right? The red flag slaps across
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Speaker 2: the base exactly.
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Speaker 3: There are many of them, right, There's many times, not
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Speaker 3: just divorce, And so I figured I'd spend a few
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Speaker 3: minutes just helpful reminding us you know that there are,
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Speaker 3: in fact, many reasons. You know. They could be from aging,
7:14
Speaker 3: it can be from moving out of state, changes in
7:18
Speaker 3: family dynamics, loss of a spouse, you know, but of
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Speaker 3: course most importantly getting a divorce. Yes, right, So these
7:24
Speaker 3: are just some of the reasons that you would do it. Now,
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Speaker 3: Remember not all states have this automatic revocation statute, so
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Speaker 3: I don't want you to rely on that.
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Speaker 2: Do we have that here in Massachusetts?
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Speaker 1: Do you know?
7:36
Speaker 3: We do? We do, But I don't love relying on it.
7:39
Speaker 3: Let's let's play out the string. Right, So, even if
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Speaker 3: you have this designated beneficiary statute and it does work
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Speaker 3: and you get revoked or the beneficiary gets revoked, well,
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Speaker 3: now you're naming the estate the beneficiary. Well that's not
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Speaker 3: helpful because now not only is it a probate asset,
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Speaker 3: but it's got to come up out over five years.
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Speaker 3: So you could have a huge income tax problem if
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Speaker 3: it's an If it's an IRA, that's what I'm talking about,
8:07
Speaker 3: the iras right. If the IRA right, it's gonna be
8:11
Speaker 3: come out over five years, you're gonna have a huge
8:13
Speaker 3: income tax problem. And can you imagine if you have
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Speaker 3: children that are actually working, making good money and they're
8:18
Speaker 3: getting big distributions from an IRA, pushing them into an
8:22
Speaker 3: even higher income tax bracket. So you got to probate
8:25
Speaker 3: and an income tax problem relying on a revocation statue.
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Speaker 3: So yeah, it might get where you want it to go,
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Speaker 3: but or at least where you don't want it to go,
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Speaker 3: but you're going to have a tax problem. But then again,
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Speaker 3: even then does it go really where you want it
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Speaker 3: to go? Because if you didn't do any planning and
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Speaker 3: it is in your estate and you don't have a will,
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Speaker 3: well then the interstate succession statute is going to take over, and.
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Speaker 2: Which basically means the state is deciding who gets your assets, right.
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Speaker 3: And it may very well be your next closest next
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Speaker 3: of kin, which is your children, and that would be okay,
8:57
Speaker 3: I guess if it's okay with you, so you know,
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Speaker 3: just being mindful.
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Speaker 2: Of that, But there are lots of people who don't
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Speaker 2: have children, so they may I know, I have a
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Speaker 2: client without children who absolutely did not want it to
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Speaker 2: go to their siblings because a couple of them are
9:09
Speaker 2: in the nursing home.
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Speaker 3: Could be yeah, absolutely, yeah, that's right. So if you
9:12
Speaker 3: don't want to go to could be siblings, nieces, nephews, depends,
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Speaker 3: so don't rely on that. But nevertheless another one, really,
9:20
Speaker 3: death of a spouse is a really big one. Right,
9:22
Speaker 3: make sure you fund your marital share and remainder share.
9:25
Speaker 3: If you did planning right, you know, close out the
9:27
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9:30
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9:33
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9:35
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9:39
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9:42
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9:44
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9:47
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9:49
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9:51
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9:54
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9:57
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10:00
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Speaker 2: You've been listening to Todd Lutski, a partner with the
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Speaker 2: Welcome back into the Legal Exchange with Todd Lotsky. I'm
13:55
Speaker 2: Susan Powers, a financial advisor with the Armstrong Advisory Group,
13:59
Speaker 2: and I'm joined by Hod Lutsky, a partner with the
14:01
Speaker 2: law firm of Cushing and Dolan with a master's in taxation.
14:05
Speaker 2: Where are we headed now, Todd?
14:07
Speaker 3: California?
14:08
Speaker 2: Okay, I'll take that.
14:09
Speaker 3: You'll take that.
14:09
Speaker 2: I'll friends out there. I'd like to visit.
14:11
Speaker 3: That's nice. I don't want to live there, but I
14:13
Speaker 3: could visit there.
14:15
Speaker 2: Yeah, I'm going into the ocean. Threat is just you
14:19
Speaker 2: know much.
14:21
Speaker 3: So here's how this works. How do you revoke a will?
14:24
Speaker 3: Seems easy, maybe not what row? So Layola in two
14:31
Speaker 3: thousand and six executed a holographic will. I know what
14:35
Speaker 3: that mean. So this is a will that is handwritten
14:39
Speaker 3: and signed by Layola by the person. Okay, no witnesses,
14:44
Speaker 3: no notary, Okay. Certain states recognize these. California is one
14:51
Speaker 3: of them. Now, these can be a little harder to prove,
14:54
Speaker 3: as you might imagine. So the will left everything to
14:58
Speaker 3: their daughter, a nouche. In twenty eighteen, Robert I believe
15:04
Speaker 3: it is the son who is not included in the
15:08
Speaker 3: holographic will.
15:09
Speaker 2: Nor in the oddball naming convention.
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Speaker 3: Right prepared a document stating that Loyola revoked all prior
15:19
Speaker 3: estate planning documents and she signed it mm hm. And
15:25
Speaker 3: that was in twenty eighteen. In twenty twenty, Loyola died
15:29
Speaker 3: while Anushe of course, petitioned the court with the two
15:32
Speaker 3: thousand and six holographic will. Makes sense, Robert countered, saying
15:38
Speaker 3: that this was revoked. The Trio Court found that Loyola
15:43
Speaker 3: died without a will intestate because the document signed was
15:48
Speaker 3: a valid cancelation of the will even without a physical act.
15:53
Speaker 2: So it wasn't a new will she signed. She just
15:55
Speaker 2: revoked everything.
15:56
Speaker 3: That's exactly what happened. A very good point, though, Susan. Yeah,
16:00
Speaker 3: well you might imagine a niche wasn't happy with that result,
16:03
Speaker 3: so a nuche appealed and the appellate court reversed. Now, really, yes,
16:09
Speaker 3: And because the count member of state. By state laws, folks,
16:12
Speaker 3: always these are state specific. The California Statute requires that
16:18
Speaker 3: a will can be revoked two ways, by doing a
16:22
Speaker 3: new will, which clearly was not done here, or by
16:27
Speaker 3: a physical act with the intent purpose of revoking it
16:33
Speaker 3: and an intent to revoke. So when you do it,
16:36
Speaker 3: it has to be a physical act obliterate, destroy, burn, torn.
16:42
Speaker 3: These are listed in there, So a physical act with
16:45
Speaker 3: the intent of revoking it well, an intent to revoke
16:49
Speaker 3: standing alone is insufficient. So the twenty eighteen document did
16:54
Speaker 3: not constitute a new will, which certainly it wasn't and
16:57
Speaker 3: therefore and it was not a testamentary act, and therefore
17:01
Speaker 3: the holographic will wins. So you did not officially revoke
17:07
Speaker 3: it here, and this, strangely enough, holographic will carries the day.
17:13
Speaker 3: Of course, whether we like this result or we don't
17:17
Speaker 3: isn't the issue. But I've got a lot of lessons
17:19
Speaker 3: to learn here, and I think we'll leave it with
17:21
Speaker 3: this idea, why are we doing this alone?
17:25
Speaker 2: Why are you trying to prepare the medical work? That's it.
17:28
Speaker 2: That's the life rule. No legal, no medical.
17:31
Speaker 3: So that's my first comment, right, why are we trying
17:33
Speaker 3: to do this alone? Guidance alone might have helped Loyola
17:36
Speaker 3: a lot in this situation, and we're going to go
17:39
Speaker 3: through that and give you some guidance. But before we do,
17:41
Speaker 3: this is just a will. I don't know that that's enough.
17:45
Speaker 3: I think an estate plan is more appropriate. A lot
17:47
Speaker 3: of us think in a state plan as a will.
17:50
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Speaker 3: six nine nine or Legal Exchange Show dot com and
18:32
Speaker 3: you can download it right there. All right, what do
18:36
Speaker 3: we learn here? What do I say?
18:37
Speaker 1: Right?
18:37
Speaker 3: We're not going to do this alone?
18:39
Speaker 2: No?
18:39
Speaker 3: Now, remember it's difficult enough to do your planning. Don't
18:44
Speaker 3: do something leave something like this to do alone. First issue,
18:48
Speaker 3: I see, a will doesn't even avoid probate. I mean
18:52
Speaker 3: a little guidance here might have.
18:54
Speaker 2: But some people say I don't need to trust I
18:56
Speaker 2: have a will. I'm all said on them to go
18:57
Speaker 2: to probate.
18:58
Speaker 3: I know, And that's exactly why a little guy Gidans
19:00
Speaker 3: would be helpful. You're absolutely right, Susan. I hear that
19:03
Speaker 3: all the time, and that's my first point. A second,
19:08
Speaker 3: you know, did she really want to protect these assets
19:12
Speaker 3: for her daughter? I mean that would have been my
19:13
Speaker 3: first question if you're leaving everything to one daughter. I'm
19:16
Speaker 3: assuming now with Robert that there's more than one kid, right,
19:20
Speaker 3: you know, if they're important to get to your daughter,
19:24
Speaker 3: then and trust of some kind, probably irrevocable, would have
19:29
Speaker 3: been needed in case you went to a nursing home
19:31
Speaker 3: or in case you know, lost it in some other way.
19:33
Speaker 3: So I always ask clients when you're doing your planning,
19:36
Speaker 3: do you want to just leave things whatever happens to
19:38
Speaker 3: be left to certain people, or do you really want
19:41
Speaker 3: to make sure things get to certain people? Right, there's
19:43
Speaker 3: two ways of looking at how you leave assets, and
19:46
Speaker 3: so I think a little more guidance there would have helped. Again,
19:49
Speaker 3: why are we trying to do this on our own?
19:51
Speaker 3: We could have avoided probate. Two, we could have protected
19:54
Speaker 3: assets a little better for our daughter, if that's our
19:58
Speaker 3: true wish. Third, you know, the trust would have also
20:03
Speaker 3: made it harder for the sun to terminate, so another
20:07
Speaker 3: important factor. Fourth, you know, if you really wanted to
20:12
Speaker 3: keep Robert out, maybe you should have put a no
20:15
Speaker 3: contest clause in as well. Right, Remember, folks, whenever you're
20:19
Speaker 3: doing planning and you're not treating the kids equally, you
20:24
Speaker 3: should add a no contest.
20:25
Speaker 2: Clause, which means you can't complain.
20:27
Speaker 3: It can't complain, you get what you get and you
20:29
Speaker 3: don't get upset, and if you do, you lose everything
20:32
Speaker 3: if you sue. So language bad idea. And you know
20:39
Speaker 3: it's important. And I've gotten to a point really in
20:42
Speaker 3: our practice where you know, even if you do leave
20:44
Speaker 3: things equally to kids, things change, and so why not
20:47
Speaker 3: just have that clause in there? Is there is there
20:49
Speaker 3: really any harm in just putting it into all your documents.
20:53
Speaker 2: It avoids the fighting. I'm going to say, probably noting anyways.
20:58
Speaker 3: Right, you know, and then what about me? You know?
21:00
Speaker 3: Another idea might be divorce proofing, right, I mean mm hmm.
21:03
Speaker 3: Think about how you leave it to your daughter. Maybe
21:06
Speaker 3: you want to protect it from your daughter's future creditors
21:09
Speaker 3: in this in this particular case. Right, So a lot
21:12
Speaker 3: of guidance could have been offered here to Leyola. So
21:17
Speaker 3: I think my main lesson from everybody is just don't
21:21
Speaker 3: this is not a do it yourself thing, right, right?
21:24
Speaker 2: Because she did it herself to say this is how
21:26
Speaker 2: I want to leave things. But then she was not
21:28
Speaker 2: legally able to revoke it herself, right, so she didn't know.
21:32
Speaker 3: What you know, she missed so many things that could
21:35
Speaker 3: have been done. And by the way, when I say
21:37
Speaker 3: don't do it yourself, I got to tell you also,
21:39
Speaker 3: I've had clients come in with very bad experiences on
21:42
Speaker 3: those online wills dot com or whatever it is that
21:45
Speaker 3: they have out there. They don't offer any guidance. You
21:49
Speaker 3: basically are pushing buttons and are on your own.
21:51
Speaker 2: Trying to figure out everything. You want to do what
21:53
Speaker 2: to do, and you don't know when something's wrong.
21:55
Speaker 3: Yeah, it's just I've just that's just been my feedback
21:58
Speaker 3: from what I've gotten with clients that have tried it.
22:00
Speaker 3: So you think it's cheaper, but again, you get what
22:03
Speaker 3: you pay for. So this is an important part in
22:05
Speaker 3: your life. Don't leave it alone. Also, you know it
22:08
Speaker 3: didn't come up here, but you know, how on earth
22:12
Speaker 3: was this not an undue influence? I mean, this was
22:15
Speaker 3: clearly undue influence. Right, Robert drafts the document, Robert gets
22:20
Speaker 3: Mom to sign the document revoking her entire estate plan.
22:23
Speaker 3: At the end of the transaction, Robert gets more than
22:25
Speaker 3: he would have gotten had he not acted, right. I mean,
22:28
Speaker 3: that's that's the definition of undue influence. So I have
22:34
Speaker 3: to believe that that should have come up in this
22:37
Speaker 3: argument somewhere. It turns out it didn't need to be
22:39
Speaker 3: because they weren't able to revoke it. So what and
22:43
Speaker 3: then you know, when if you in this case, you know,
22:46
Speaker 3: if this, if this didn't work out and this will
22:49
Speaker 3: was revoked, well then he would have gotten more because
22:51
Speaker 3: again you're dealing with an intestate succession statute there, so
22:54
Speaker 3: he probably would have gotten more than you would have gotten,
22:57
Speaker 3: you know, otherwise. So just keep these things in mind
23:02
Speaker 3: when you're drafting. You know, it's it's it's good to
23:04
Speaker 3: get some guidance and get some planning advice when you're
23:08
Speaker 3: doing estate planning because just it's too big of a
23:12
Speaker 3: deal to leave on your own. And to that end, folks,
23:15
Speaker 3: I just want to mention the guide again, it's the
23:18
Speaker 3: top seven estate planning trusts. Really gets into how they
23:23
Speaker 3: operate so that you can understand the tax implications and
23:28
Speaker 3: the dos and don'ts for you. It'll really help you
23:30
Speaker 3: get started eight six six eight four, eight five six
23:34
Speaker 3: nine nine or Legal Exchange show dot com.
23:37
Speaker 2: You've been listening to Todd Lutsky, a partner with the
23:40
Speaker 2: law firm of Cushing and Dolan. I'm Susan Power as
23:43
Speaker 2: a financial advisor with the Armstrong Advisory Group. Todd will
23:46
Speaker 2: be answering your listener questions when we return to the
23:49
Speaker 2: Legal Exchange with Todd Lutsky.
23:52
Speaker 1: A trust isn't just a document. It's a powerful tool
23:55
Speaker 1: that can help protect your assets from the nursing home
23:57
Speaker 1: and even reduce or eliminate a state taxes. Cushing and
24:00
Speaker 1: Dolan are leaders in elder Law, estate planning and asset protection.
24:04
Speaker 1: This month, they're offering a free guide called Demistifying the
24:07
Speaker 1: Top seven estate Planning Trusts. This guide breaks down the
24:10
Speaker 1: most common types of trusts, explains the pros and cons
24:13
Speaker 1: of each, and helps you understand which might be right
24:15
Speaker 1: for you and your family. Trust come with different rules, benefits,
24:19
Speaker 1: and tax treatment, and choosing the wrong one could cost you.
24:22
Speaker 1: Learning the differences now can help you make smarter decisions
24:25
Speaker 1: for your future and your loved ones. Trusts are a
24:27
Speaker 1: critical part of any well designed estate plan, but they
24:30
Speaker 1: can be complex. Don't guess your way through it. Get
24:33
Speaker 1: the facts first. Call Cushing and Dolan now at eight
24:36
Speaker 1: sixty six eight four eight five six nine nine to
24:39
Speaker 1: request your free copy, or visit legal exchange show dot com.
24:42
Speaker 1: The proceeding was paid for in the views exprest Or
24:44
Speaker 1: Sole leaders of Cushing and Dolan. Cushing and Dolan and
24:46
Speaker 1: or Armstrong Advisory may contact you're offering legal investment services.
24:49
Speaker 1: Cushing and Dolan and Armstrong Advisory do not endorse each other.
24:51
Speaker 1: In or not affiliated HI.
24:53
Speaker 4: This is Mike Armstrong from the Armstrong Advisory Group. When
24:55
Speaker 4: it comes to legacy planning, having a will is important,
24:58
Speaker 4: but it may not be enough. A will only covers
25:00
Speaker 4: probate assets, and the probate process can be slow, public,
25:03
Speaker 4: and expensive. That's where trusts come in. Trust can help
25:06
Speaker 4: you avoid probate, keep your wishes private, and control how
25:10
Speaker 4: and when your assets are distributed. Whether you're looking to
25:12
Speaker 4: support family, minimize taxes, or prepare for the unexpected, a
25:16
Speaker 4: well designed plan can make a meaningful difference. Our new
25:19
Speaker 4: free Guide, Leaving a Lasting Legacy, covers wills, trusts, and
25:23
Speaker 4: other strategies to help you build a strong retirement plan.
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Speaker 4: Take the first step towards clarity by calling eight hundred
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Speaker 4: three nine three for zero zero one right now and
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Speaker 4: asking for your free guide today. That number again is
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25:37
Speaker 4: requested online at Armstrong Advisory dot com.
25:40
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:42
Speaker 1: registered investment advisor. Nothing in the ad or in any
25:44
Speaker 1: Armstrong guide a specific financial, legal or tax advice. Consult
25:47
Speaker 1: your own financial tax into state planning advisors before making
25:49
Speaker 1: any investment decisions. Armstrong make contact you to offer investment
25:52
Speaker 1: advisory services. The holidays are just around the corner, so
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Speaker 1: dot com. You're listening to the Legal Exchange and it's
26:56
Speaker 1: time for Ask Todd, the segment where Todd will answer
26:59
Speaker 1: your questions about anything and everything that's included in the
27:02
Speaker 1: estate planning process. Once again, here's Todd, Lutsky and Susan Powers.
27:09
Speaker 2: Welcome back to I have a few questions from listeners
27:11
Speaker 2: for you. First question comes from Elane in Westboro, mass
27:15
Speaker 2: And Elaine writes, my husband and I have irrevocable trusts
27:19
Speaker 2: that we created in two thousand and five. This is
27:21
Speaker 2: with you, by the way I'm going to say, and
27:23
Speaker 2: this is a mutual client. He passed away five years
27:26
Speaker 2: ago and at the time we worked with your office
27:28
Speaker 2: to file the estate tax return. We both have money
27:31
Speaker 2: in our trusts. I would like to make some moderate
27:34
Speaker 2: gifts to my children to help them out. What is
27:37
Speaker 2: the best way for me to gift from his trust,
27:41
Speaker 2: my trust, or my bank account that isn't in the trust.
27:46
Speaker 3: This is really a good question, and this is what
27:49
Speaker 3: you need to think about, folks. When you do your
27:52
Speaker 3: planning right, they are living, breathing, sort of evolving entities.
27:58
Speaker 3: That's the way I'd like to think of planning. Not
27:59
Speaker 3: I signed my documents and.
28:00
Speaker 2: I'm done, set it and forget it.
28:02
Speaker 3: As much as I say that a lot, it really
28:05
Speaker 3: does require some attention.
28:07
Speaker 2: It's those life events right right right.
28:10
Speaker 3: If you I always tell people, if you're going to
28:13
Speaker 3: do something that you think might impact your estate plan, please.
28:18
Speaker 2: Call first, pick up the phone.
28:21
Speaker 3: Right, If you tell me, oh, by the way, here's
28:23
Speaker 3: what I did, I might not be able to help.
28:27
Speaker 2: Then sometimes it's better to ask for forgiveness rather than permission.
28:32
Speaker 2: This is not one of those times.
28:33
Speaker 3: Right, That's exactly right, And so so I the answer
28:39
Speaker 3: here is I have to ask a few more questions.
28:41
Speaker 3: So two thousand and five we did irrevocable trust.
28:45
Speaker 2: They had two What do we.
28:46
Speaker 3: Think they're worth today? From an estate valuation standpoint?
28:51
Speaker 2: Today his trust has about two million in it, and
28:56
Speaker 2: her trust has about one million in it, and outside
29:02
Speaker 2: there is probably a couple hundred thousand in the bank.
29:06
Speaker 3: Okay, so we're looking at a three point two million
29:11
Speaker 3: dollar estate. The two million in his trust is tucked
29:14
Speaker 3: away in the remainder share. Folks, that's not what you're
29:17
Speaker 3: asking about here. But that has been sheltered for estate
29:20
Speaker 3: taxes and will not be included in her estate when
29:24
Speaker 3: she dies. So this is the analysis you have to
29:26
Speaker 3: go through. Then I look at her estate and I say,
29:30
Speaker 3: if she died tomorrow, she'd be worth one point two Yes,
29:33
Speaker 3: the two outside and the one in which is also
29:36
Speaker 3: below the million dollar threshold. So I'm sorry, the two
29:40
Speaker 3: million dollar threshold in Mass that was changed so it's
29:43
Speaker 3: below the two million dollar threshold. So I'm not really
29:50
Speaker 3: worried about estate tax savings here, okay. And the reason
29:54
Speaker 3: that's important is because where you gift from can help
29:57
Speaker 3: with that. Right, Do I want to reduce the estate tax?
30:03
Speaker 3: If I did, then I'd want to be giving things
30:05
Speaker 3: away from the you know, the two hundred thousand in
30:09
Speaker 3: her bank account, which will help reduce her estate tax.
30:13
Speaker 3: But I don't need to do that because it doesn't
30:15
Speaker 3: seem like there's going to be any savings in the
30:17
Speaker 3: estate tex.
30:17
Speaker 2: And if she were over two million, then.
30:19
Speaker 3: I might focus on that, okay, But here's the flip side.
30:23
Speaker 3: These are irrevocable trusts, and if I make a gift
30:26
Speaker 3: from the two hundred thousand in her personal bank account,
30:30
Speaker 3: while it would help to reduce the estate for estate
30:32
Speaker 3: tax purposes, which here I do not need any help
30:36
Speaker 3: because it's already going to be none, it would create
30:39
Speaker 3: a new five year waiting period for medicaid eligibility.
30:43
Speaker 2: Yeah, and she is in failing health.
30:45
Speaker 3: So if that's the case, then I'm not going to
30:48
Speaker 3: gift from there, right, I'm going to gift from the
30:51
Speaker 3: irrevocable trust, probably his, Okay, well, actually it could be
30:56
Speaker 3: hers either way, as long as they've been done in
30:59
Speaker 3: two thousand and five, it doesn't matter which one. So
31:02
Speaker 3: either one of these trusts, and so since his is
31:04
Speaker 3: already sheltered for a state taxes, might as well gift
31:07
Speaker 3: from hers and get the best bang for your buck.
31:09
Speaker 3: So in this case, I would gift away from her
31:12
Speaker 3: trust whatever she wants. There's language in there that says
31:16
Speaker 3: distributions can come out of these irrevocable trusts to kids
31:20
Speaker 3: of all generations. So make the gift and have at it.
31:23
Speaker 3: And that way you don't reset the five year waiting period,
31:26
Speaker 3: and you help reduce her state taxes. Folks, lots to
31:30
Speaker 3: think about even after your plan is done. But before
31:34
Speaker 3: your plan is done, if you don't know how to
31:36
Speaker 3: get started, you're not sure which trust is right for you,
31:40
Speaker 3: call and get this guide the top seven estate planning
31:43
Speaker 3: trusts that we use generally this they deal with the revocable,
31:47
Speaker 3: the irrevocable, many kinds of irrevocables. They deal with special
31:51
Speaker 3: needs trusts and pool trusts, and more importantly, I think
31:55
Speaker 3: than anything is they explain in here how they work.
31:59
Speaker 3: The tax issue, the operational issues, the designated beneficiary issues.
32:05
Speaker 3: This will help you get started or change your trust
32:07
Speaker 3: if you need to change one from what you have started.
32:10
Speaker 3: Get the guide eight six six eight four eight five
32:14
Speaker 3: six nine nine or Legal Exchange Show dot com again
32:18
Speaker 3: eight six six eight four eight five six nine nine
32:21
Speaker 3: or Legal Exchange Show dot com.
32:24
Speaker 2: Our last question comes from Dennis in Braintree, mass and
32:27
Speaker 2: Dennis writes, my wife and I created an irrevocable trust
32:31
Speaker 2: with you several years ago. We put our home in
32:34
Speaker 2: land into the trust. We did not have any liquid
32:37
Speaker 2: assets to put into the trust before. We are now
32:40
Speaker 2: going to be selling the land. How do I handle
32:43
Speaker 2: the sale of the land and the proceeds.
32:47
Speaker 3: So again, great news. It's an irrevocable trust and as
32:51
Speaker 3: many of you might always think, I've given up control
32:54
Speaker 3: and it's inflexible and rigid. No, not true to any
32:57
Speaker 3: of those, and this is a good example of that.
33:00
Speaker 3: If you want to sell, can you absolutely you direct
33:03
Speaker 3: the trustee to sell put it on the market. Okay?
33:07
Speaker 3: Is there different paperwork that needs to be signed? Nope,
33:10
Speaker 3: exactly the same paperwork. The only difference is the trustee
33:15
Speaker 3: signs all the paperwork. Okay, the trustee has no liability.
33:19
Speaker 3: The trust trustee is just signing the paperwork to do
33:23
Speaker 3: the selling of the property for the trust. So the
33:26
Speaker 3: trust sells it, the deed goes out, and the new
33:30
Speaker 3: money liquid assets come in to the trust.
33:33
Speaker 2: So if they didn't have any liquid assets before, they
33:36
Speaker 2: likely were an issued to tax ID numbers. So how
33:38
Speaker 2: do they get that good point?
33:40
Speaker 3: So they if we've never gotten a tax ID number,
33:43
Speaker 3: because there's no need to tell the irs you have
33:46
Speaker 3: these trusts. Until there is a need tell the irs
33:48
Speaker 3: you have these trusts.
33:49
Speaker 2: It's none y for now.
33:51
Speaker 3: And so when you want to open the bank account
33:53
Speaker 3: to receive those proceeds, you need to get an ID number,
33:57
Speaker 3: which we would help you with, and then you would
34:00
Speaker 3: open up a bank account, would give you the name,
34:02
Speaker 3: the name of the trust, the trustee, and then you
34:06
Speaker 3: deposit the money into that bank account and that part
34:10
Speaker 3: would be done. And the nice part about this is
34:12
Speaker 3: that that transaction doesn't restart the waiting period because it
34:19
Speaker 3: says and I was going to ask you about this, Susan,
34:21
Speaker 3: if you knew it, It says that they did it
34:23
Speaker 3: several years ago.
34:25
Speaker 2: Yeah, so this is actually our client. All your clients
34:28
Speaker 2: are listening now. So this was I want to say,
34:30
Speaker 2: probably four years ago. They created their trust and then
34:35
Speaker 2: relocated and now selling that land.
34:38
Speaker 3: And again the flexibility of moving you bring up, I
34:40
Speaker 3: didn't hear.
34:41
Speaker 2: That they moved out to a different state.
34:43
Speaker 3: Actually, so that's great. So they can move. That isn't
34:46
Speaker 3: a problem with the irrevocable trust. And they can sell,
34:50
Speaker 3: which they did, and they may want to buy now.
34:54
Speaker 3: But the money that's sitting in there. If this was
34:57
Speaker 3: done four years ago and now we sold, so.
35:02
Speaker 2: We had a land and then the land's been sold,
35:04
Speaker 2: so now there'll be money.
35:06
Speaker 3: So the land was converted into dollars, and so now
35:10
Speaker 3: the dollars are in the trust and the five year
35:13
Speaker 3: waiting period is still five years, but four have ticked off.
35:18
Speaker 2: So don't we start that by changing that land to.
35:21
Speaker 3: Cash exactly right. So if that house, if that land
35:24
Speaker 3: would have been protected in one more year, this money
35:28
Speaker 3: will be protected in one more year. You didn't reset.
35:31
Speaker 2: So what can he do with that money?
35:34
Speaker 3: Well, now he can either invest it if he doesn't
35:36
Speaker 3: want to rebuy a house, but you could take an
35:39
Speaker 3: invested and really, at the breath of the market, there's
35:42
Speaker 3: no limitation on what you can buy as an investment
35:47
Speaker 3: inside the trust. Or I guess if he's moving out
35:51
Speaker 3: of state and he needs that money to buy the
35:53
Speaker 3: new home that he's going to live in in the
35:56
Speaker 3: new state, that's certainly ok too. Just would write the
35:59
Speaker 3: check again, direct your trustee to buy money, goes out,
36:04
Speaker 3: same paperwork, and a house comes in, and.
36:07
Speaker 2: The tax is the same, the tax implication.
36:10
Speaker 3: Tax is the same. It's a grand tour trust. So
36:12
Speaker 3: for income tax purposes we need to, you know, have
36:18
Speaker 3: it taxed at his rate, which we do, so there's
36:21
Speaker 3: no adverse income tax at all. Folks. This is an
36:24
Speaker 3: example of how flexible these irrevocable trusts are. In fact,
36:27
Speaker 3: both of them are. They are some of the trusts
36:30
Speaker 3: that are in the guide. Get the guide Top seven
36:32
Speaker 3: estate planning trusts eight six six eight four eight, five
36:36
Speaker 3: six nine nine.
36:38
Speaker 2: If you have a question you would like to ask Todd,
36:40
Speaker 2: visit his website Legal Exchange Show dot com and click
36:44
Speaker 2: on the ask Tod tab. Maybe I'll be able to
36:46
Speaker 2: read your question on the air, and hopefully his answer
36:49
Speaker 2: will stop you from becoming one of his next real
36:52
Speaker 2: life stories. You've been listening to Todd Lutsky, a partner
36:56
Speaker 2: with the law firm of Cushing and Dolan. I'm Susan Powers.
37:00
Speaker 2: You'll advise with the Armstrong Advisory Group. We'll be back
37:03
Speaker 2: with more after this quick break on the Legal Exchange
37:06
Speaker 2: with Todd Lutsky.
37:08
Speaker 1: A trust isn't just a document. It's a powerful tool
37:11
Speaker 1: that can help protect your assets from the nursing home
37:13
Speaker 1: and even reduce or eliminate a state taxes. Cushing and
37:16
Speaker 1: Dolan are leaders in elder law, estate planning, and asset protection.
37:20
Speaker 1: This month, they're offering a free guide called Dmistifying the
37:23
Speaker 1: Top seven estate Planning Trusts. This guide breaks down the
37:26
Speaker 1: most common types of trusts, explains the pros and cons
37:29
Speaker 1: of each, and helps you understand which might be right
37:31
Speaker 1: for you and your family. Trust come with different rules, benefits,
37:35
Speaker 1: and tax treatment, and choosing the wrong one could cost you.
37:38
Speaker 1: Learning the differences now can help you make smarter decisions
37:41
Speaker 1: for your future and your loved ones. Trusts are a
37:43
Speaker 1: critical part of any well designed estate plan, but they
37:46
Speaker 1: can be complex. Don't guess your way through it. Get
37:49
Speaker 1: the facts first. Call Cushing and Dolan now at eight
37:52
Speaker 1: sixty six, eight four eight five six ninety nine to
37:54
Speaker 1: request your free copy or visit legal exchange show dot com.
37:58
Speaker 1: The proceeding was paid for in the views express Sole.
38:00
Speaker 1: Leaders of Cushian Dolan, Cushingan Dolan d or Armstrong Advisory
38:02
Speaker 1: may contact you offering legal or investment services. Cushing and
38:05
Speaker 1: Dolan and Armstrong Advisory do not endorse each other, in
38:07
Speaker 1: or not affiliated. The holidays are just around the corner,
38:11
Speaker 1: so now is the time to plan your winter escape.
38:14
Speaker 1: Trade in the cold for sunshine, sea breezes, and island
38:18
Speaker 1: vibes in the US Virgin Islands, America's Caribbean paradise. Whether
38:23
Speaker 1: it's a romantic retreat, a family celebration, or a solo
38:26
Speaker 1: recharge before the new year. Saint Croix, Saint Thomas, and
38:30
Speaker 1: Saint John offer the ultimate warm weather getaway. Lounge on
38:34
Speaker 1: sun drenched beaches, explore vibrant culture and celebrate the holiday's
38:39
Speaker 1: island style. No passport, no hassle, just warm weather, clear
38:44
Speaker 1: blue water and unforgettable memories. This is where the stress
38:48
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Speaker 1: Your tune to the Legal Exchange with Todd Lutsky. If
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Speaker 1: Todd right now at eight six six eight four eight
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Speaker 1: Exchange show dot com.
40:58
Speaker 2: Welcome back into the Exchange with Todd Lutsky. I'm Susan Powers,
41:02
Speaker 2: a financial advisor with the Armstrong Advisory Group. And I'm joined,
41:06
Speaker 2: of course by Todd Lutsky, a partner with the law
41:09
Speaker 2: firm of Cushing and Dolan with the Masters in Taxation. So, Todd,
41:13
Speaker 2: I feel like we spend an awful lot of time
41:15
Speaker 2: discussing irrevocable trust and protecting assets from the nursing home,
41:19
Speaker 2: but not really as much time on revocable trusts. Okay,
41:24
Speaker 2: So who should actually consider having a revocable trust?
41:28
Speaker 3: You know, it's strange that you say that, but I
41:31
Speaker 3: would say almost almost everyone. Let's let's who would you
41:35
Speaker 3: clarify that a little for you?
41:37
Speaker 2: Yeah?
41:38
Speaker 3: So, I mean, if you're young and single, you know,
41:47
Speaker 3: let's say I'm I'm in my twenty five, thirty years old.
41:52
Speaker 3: You know you're not gonna have it in college, right,
41:54
Speaker 3: so everyone until you read out in the workforce, it
41:57
Speaker 3: doesn't even matter. But you know, let's say you're thirty
42:00
Speaker 3: years old and single, Well, it might not be overly
42:04
Speaker 3: important for you, again, depending on how much you're worth.
42:06
Speaker 3: I mean, you don't have any children yet, you don't
42:08
Speaker 3: have anyone you're dying to leave assets to overly important.
42:13
Speaker 3: Now that's sorry for the punt, but but you know,
42:20
Speaker 3: might not be overly relevant, but you know, if you
42:22
Speaker 3: have nieces and nephews you want to take care of,
42:24
Speaker 3: or you just want to avoid probate and stuff, trust
42:27
Speaker 3: trust is helpful.
42:28
Speaker 2: What about if you own real estate, like if you're
42:31
Speaker 2: thirty years old and you you rent an apartment only
42:33
Speaker 2: of bank accounts and investment accounts or for one case
42:36
Speaker 2: or whatever different story.
42:37
Speaker 3: Right to avoid probate, that would be an item, whereas
42:40
Speaker 3: you could do it without it, if you have just
42:42
Speaker 3: bank accounts and so forth. You're right, you could. You
42:44
Speaker 3: could easily just put beneficiaries on and you don't really
42:47
Speaker 3: need an estate plan. But if you want to avoid
42:49
Speaker 3: probate with real estate, a trust would would help you
42:52
Speaker 3: do that. So I like that idea. But staying with
42:55
Speaker 3: the young people, because we don't talk a lot about
42:57
Speaker 3: young people doing planning, but I've gotten some lately there
43:00
Speaker 3: and they're starting to catch on. If you're married and
43:04
Speaker 3: have young children, it's a hard stop, right, you got
43:07
Speaker 3: to do it. Why because the main reason might not
43:11
Speaker 3: be to avoid a state taxes right. For federal purposes,
43:13
Speaker 3: you might not have that much, although you'd be surprised
43:15
Speaker 3: a couple of life insurance policies, and now you're looking
43:18
Speaker 3: at state death tax. Yeah, so it's more about it
43:23
Speaker 3: may be about avoiding state death tax and probate when
43:26
Speaker 3: you're married with kids as well, but the bigger reason
43:31
Speaker 3: is miners can't own anything.
43:33
Speaker 2: So something happens to both of you.
43:35
Speaker 3: Yeah, I don't want some guardian owning everything. Not to
43:37
Speaker 3: mention the fact I need a will at least that
43:39
Speaker 3: to appoint a guardian. I don't want the court appointing
43:42
Speaker 3: a guardian for my kids.
43:43
Speaker 2: To decide who's going to take custody.
43:44
Speaker 3: You can take custody right, So at a bare minimum
43:47
Speaker 3: you want a will, but you really want to trust
43:49
Speaker 3: and a will so you can get the guardian appointed.
43:52
Speaker 3: And you don't want the guardian owning all your stuff,
43:56
Speaker 3: so the trust can own it. And sometimes the guardian
43:59
Speaker 3: in the trustee can be different people.
44:01
Speaker 2: Well, checks and balances, Yeah, I got you.
44:03
Speaker 3: Take care of the kids, and this is where you
44:04
Speaker 3: go to get the money. And then you can control
44:07
Speaker 3: how those assets are owned and how they're used, and
44:10
Speaker 3: how your children benefit from them because they can't own it.
44:14
Speaker 3: So to me, young people even should have revocable trusts,
44:18
Speaker 3: and and as you get older, then the value of
44:22
Speaker 3: your estate grows and you're thinking now more about reprobate
44:26
Speaker 3: and reducing estate taxes. But then your children might have
44:30
Speaker 3: grown and now you're thinking about how do I leave
44:32
Speaker 3: it to them? So divorce proofing credit or protection right through.
44:37
Speaker 2: The credit or protection through the revocable.
44:40
Speaker 3: Absolutely you can. So I think that's you know, sort
44:43
Speaker 3: of how it evolves. Right. And then if you get
44:45
Speaker 3: older and your kids are older and you have grandkids,
44:48
Speaker 3: now you're talking about generation skipping, and you can do
44:51
Speaker 3: that planning with a revocable trust, getting it to the
44:54
Speaker 3: next generation without paying taxes. And of course if you're
44:57
Speaker 3: even older and you have a large estate, now it's
44:59
Speaker 3: just tax in general. So see, there's so much to
45:03
Speaker 3: talk about, folks, and there's so much to learn about
45:07
Speaker 3: in the estate planning world. This guide the top seven
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Speaker 3: estate planning trust will help you understand more about estate
45:14
Speaker 3: planning and maybe get you started as to which one
45:17
Speaker 3: is right for you, from revocable to irrevocable trust to
45:20
Speaker 3: pooled trust, and if you've got special needs children, to
45:23
Speaker 3: a special needs trust, and of course, most importantly the
45:26
Speaker 3: one many of you have heard about, Nominee Realty trusts
45:29
Speaker 3: tops the list as the most confusing of all these trusts.
45:33
Speaker 3: But it's in here, it's explained to you and it
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Speaker 3: six nine nine or Legal Exchange show dot com.
45:46
Speaker 2: So you figure out you need a revocable trust, what
45:49
Speaker 2: kind of assets should you be transferring into those trusts?
45:53
Speaker 3: So if we're talking about revocable only, I would say,
46:00
Speaker 3: and you hate to get quick cart blanche answers, but
46:03
Speaker 3: this one you can, I would say, almost everything except
46:08
Speaker 3: your IRA, your four oh one K you're qualified retire, Yes,
46:14
Speaker 3: that's I would say, that's the only ones that can't
46:16
Speaker 3: go in.
46:17
Speaker 2: So your home you would put in absolutely what happens
46:20
Speaker 2: todd if you have a mortgage on your home, because
46:22
Speaker 2: if you're younger and planning, you're likely going to have
46:24
Speaker 2: a mortgage on there. So how do you handle that?
46:26
Speaker 2: Can you still do it?
46:27
Speaker 3: Fair? Fair question? And the answer is with revocable trusts,
46:31
Speaker 3: absolutely you can do it. And it does not need
46:36
Speaker 3: to trigger the du on sale clause. It cannot and
46:39
Speaker 3: there is no need to even tell the bank. Okay,
46:42
Speaker 3: because the Guard Saint Germain Act says that when you
46:46
Speaker 3: put it into a revocable trust, it cannot trigger the
46:51
Speaker 3: due on sale clause because you really still own it
46:55
Speaker 3: for bank purposes.
46:56
Speaker 2: Okay, So if you have it in your revocable trust.
46:59
Speaker 2: I'm thinking about where we are today with mortgage rates
47:02
Speaker 2: being so high. Let's say someone you know, a couple
47:05
Speaker 2: of years from now rates finally drop down and they
47:08
Speaker 2: want to refinance their home. Can they do that right
47:10
Speaker 2: through the trust?
47:11
Speaker 3: Well, you know the answer is that it's going to
47:13
Speaker 3: be up to the bank. So here's the problem. Banks
47:16
Speaker 3: are all, you know, finicky, so there is no legal
47:21
Speaker 3: reason why you cannot just refinance it right inside the trust.
47:26
Speaker 3: What many of you will find out, though, is that
47:29
Speaker 3: the bank will likely tell you, oh, it's in the trust,
47:35
Speaker 3: why don't we take it out of the trust, put
47:37
Speaker 3: it back in your name, close the deal on the
47:42
Speaker 3: mortgage in your name, and then they'll tell you it's
47:47
Speaker 3: okay now to put it back in the trust, the
47:50
Speaker 3: revocable trust.
47:51
Speaker 2: So there's no restrictions taking it out and putting it
47:53
Speaker 2: back in again.
47:54
Speaker 3: No tax issues, no restrictions, no nothing. It's just just
47:59
Speaker 3: just comes out. Because it's revocable, you could reach into
48:02
Speaker 3: your trust. Anytime you want, take out anything you want,
48:05
Speaker 3: put it back in your name, and that's what they
48:07
Speaker 3: do here. So we oftentimes just prepare the deed out,
48:10
Speaker 3: let them close on the mortgage, and put the deed
48:13
Speaker 3: back in.
48:13
Speaker 2: Okay. So, in terms of taxes, you mentioned the estate
48:18
Speaker 2: taxes and so forth, a lot of people won't have
48:21
Speaker 2: to worry about a state taxes when they're just starting
48:22
Speaker 2: out if they're young. Correct specifically, so what about a
48:26
Speaker 2: tax return? People hate taxes as it is. Do I
48:28
Speaker 2: have to file a separate new tax return if I
48:32
Speaker 2: have a revocable trust?
48:34
Speaker 3: So great question. Again, this is sort of the operational
48:38
Speaker 3: type questions of these trusts, the dos and don'ts. Right, So,
48:41
Speaker 3: so far we're learning that you can pretty much put
48:43
Speaker 3: in and take out anything you want. So there's really
48:45
Speaker 3: no do's and don'ts for you on a revocable trust,
48:50
Speaker 3: and no problem with the mortgage. And you're going to
48:53
Speaker 3: find also no problem with administrative issues like tax returns.
48:59
Speaker 3: There's no reason to file a tax return for this
49:02
Speaker 3: trust because it is a revocable grand tour trust. Now
49:07
Speaker 3: there's many kinds of grand tour trusts, different ways to
49:11
Speaker 3: create grand to r trust. But when it's a revocable trust,
49:15
Speaker 3: that in and of itself makes it a grand tour
49:18
Speaker 3: trust for income tax purposes, which means you're the owner
49:23
Speaker 3: for income tax. So you report everything on your ten
49:26
Speaker 3: forty and when you open up the bank accounts or
49:32
Speaker 3: you retitle the Fidelity or Schwab accounts to the trust
49:36
Speaker 3: right and put things in there. Everything that's retitled we
49:40
Speaker 3: talked about earlier to the trust is in your social
49:45
Speaker 3: Security number.
49:47
Speaker 2: Okay.
49:47
Speaker 3: There is no tax ID number for the trust. Don't
49:51
Speaker 3: get one.
49:52
Speaker 2: Different than an irrevocable trust, like we talked about.
49:54
Speaker 3: Different than an irrevocable trust, No need to get an
49:58
Speaker 3: ID number. It's your social Security number. And therefore the
50:02
Speaker 3: ten ninety nine's that are generated from these investment portfolios
50:07
Speaker 3: will come in your social Security number. Okay, so your
50:10
Speaker 3: accountant will just say, oh, no problem, just put it
50:12
Speaker 3: on the tenth.
50:13
Speaker 2: Even though the the ten ninety nine says powers family
50:16
Speaker 2: revocable trust, it's got my or my husband's social audit,
50:20
Speaker 2: so that just gets lumped in with all our other stuff.
50:22
Speaker 3: It's exactly right. Okay, there's absolutely no difference, So folks,
50:26
Speaker 3: I hope that helps, but that's a really good explanation
50:28
Speaker 3: of revocable trust. But cal and get the guide for
50:31
Speaker 3: the top seven estate planning trust because there's many more
50:34
Speaker 3: you can learn about to find out which one's right
50:36
Speaker 3: for you eight six six eight four eight five six
50:40
Speaker 3: ninety nine or Legal Exchange show dot com.
50:43
Speaker 2: Todd Lutsky from the law firm of Cushing and Dolan,
50:46
Speaker 2: thank you so much.
50:47
Speaker 3: Thank you, Susan, Always a pleasure.
50:49
Speaker 2: I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
50:53
Speaker 2: We thank you for joining us today and we'll see
50:55
Speaker 2: you again next week on the Legal Exchange with Todd Lutsky.
51:00
Speaker 1: A trust isn't just a document. It's a powerful tool
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Speaker 1: expressed or sole leaders of Cushing and Dolin. Cushing and
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Speaker 1: Dolin in or Armstrong Advisory may contact you're offering legal
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Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
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Speaker 1: Armstrong Guide a specific financial, legal, or tax advice. Consult
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