The Legal Exchange: Saturday Edition - Saturday, May 4, 2024

Episode Transcript

(00:00):
This is the Legal Exchange with ToddLutsky from the law firm of Cushing and
Dolan and Susan Powers of the ArmstrongAdvisory Group. Each week, Todd and
Susan will discuss many topics, includingestate planning, how to avoid probate,
and protecting your money from a nursinghome. If you need assistance in any
of these areas, or have aquestion about another issue that may affect your
future, call eight six six eightfour eight five six ninety nine to make

(00:24):
an appointment. That's eight six sixeight four eight five six ninety nine.
Operators are standing by. Now Hereare your hosts, Tod Lutsky and Susan
Powers. Welcome into the Legal Exchangewith Todd Lotsky. I'm Susan Powers,
a financial advisor with the Armstrong AdvisoryGroup, and I'm joined by Todd Lotsky,

(00:45):
a partner with the law firm ofCushing and Dolan with a master's in
taxation. Welcome Todd. How areyou today? I'm never better in you?
I am great? Thank you?What do you have for us this
week? Couple of cases, oneout of Virginia the Cord case than a
Wisconsin carase, but Interestingly enough,they both deal with what we like to
call smaller documents, but nevertheless superimportant, and I think we need to

(01:08):
talk about them because even with ourguide, it's all about avoiding potholes,
and potholes come in all sizes,flavors, and colors. So in this
case, the Vermont was about,you know, do you really require accountings
under powers of attorney? Are theymandatory? And do you need them?
And how do they work? Andwe're going to learn a lot about powers

(01:30):
of attorney. The next one isa Wisconsin Appelled Cord case where you know,
is it really easy just to revokea healthcare proxy and in favor of
a guardianship? And we're going totalk You'll see in this case it's about
guardianships, whereas powers of attorney alsocome in the flavor of conservatorships. So
we'll compare the guardianships and conservatorships.Even when we compare in this case,

(01:53):
how easy is it to revoke apower of a healthcare proxy in favor of
a guardianship? And I'll explain toyou why someone wanted to do that and
whether or not they are successful indoing that. So these are both seemingly
minor documents, healthcare proxies, powersof attorney, guardianships, conservatorships. But

(02:14):
you know what, folks, itall comes down to our new guide for
the month. It is a brandnew month, and the new guide is
avoiding estate planning potholes right and potholes. As I said, come in all
sizes, shapes and colors. Yes, making sure you have your powers of
attorney and healthcare proxies in place important. You know. Don't rely on a

(02:36):
will thinking that's your estate plan somany people do. Maybe I've not done
my planning for ten or fifteen years. Maybe I should review it. Right?
What if I'm changing residency, doesthat mean I should review my plan?
And have you successfully changed residency?You might not know all the things
you need to do to accomplish that. It's not always so easy. Don't
think your estate's too small, folks. There's so many potholes to avoid.

(03:00):
Call and get the guide. It'snew this month. Detour head estate planning
potholes to avoid eight six six eightfour eight five six nine nine, or
go to our website legal exchange showdot com. You can download it there
again eight six six eight eight fivesix nine nine or Legal Exchange Show dot

(03:22):
com. Let's head over to Virginia. So here's the situation. Margaret did
a power of at terming attorney,naming Carl, and for like the next
ten years, Carl managed all ofher affairs just fine, all the financial
affairs. Doris, some niece,decided to file a petition for an accounting

(03:45):
under the Uniform Power of Attorney Act. That says, you've mismanaged the funds
and you've resulted in Margaret being transferredfrom a private nursing home to a Medicaid
funded nursing home. Could happen justbecause you run out of money? Right,
I mean? So anyways, Okay, Well, the trial court dismissed

(04:05):
the claim for failure to state acclaim, basically saying, you really didn't say
anything in this claim. So sheamended her complaint. Doris the niece did
and she says, well, nowI'm going to argue that there was a
breach of fiduciary duty because you causedthe loss of one hundred thousand dollars.
I don't know where that number camefrom. And she's entitled to an accounting

(04:29):
as a niece because she's still aninterested party under the state statue. Hmm
okay, Well, the trial courtdenied the petition again saying you lack standing,
you don't even have interest here.Well, the appellate court agreed that
Doris did have standing because obviously theywent to the appeal. Appellate court did

(04:51):
have standing. But just because youhave standing to bring an action to argue
that you want a an accounting done, all you get is the right to
a hearing, and the court hasdiscretion as to whether to order the accounting
or not. And here the appellatecourt agreed with the trial court, saying

(05:15):
you really didn't violate your discretion trialcourt in denying the accounting. So go
away, Doris the niece. Andyou know what, folks, I find
that to be the correct answer here. But let's just try to understand what
was involved. Why does this evenmatter? Well, they did have a

(05:36):
power of attorney in place, andthey're good to have. What do they
do and why do we need them? Very important? They allow you to
pick somebody to make financial decisions foryou, access accounts, make gifts,
transfer real estate, you name it. Yes, you do have a fiduciary
duty that is true to act inthe best interest of the person who appointed

(06:00):
you, So nothing wrong with that. And what we love about them is
they allow you to make quick actiondecisions. You know, something happens,
you can do. And by theway, you don't even have to be
sick you can grant. I mean, my wife and I have given each
other power of attorney and if I'munavailable for some reason and she needs to
sign my name, she can.So the kind we do anyway, are

(06:26):
not requiring. They're not called springingpowers of attorney. They don't require me
to be incapacitated to function. Okay, and we'll see how that's different than
a healthcare proxy in a minute.But so that's how that works, and
I think that's an effective way tohave somebody help you with this. Is
there anything they can't do on yourbehalf? Taught? Is basically everything you

(06:47):
could do financially, they can dofor you pretty much, pretty much.
And some of them, you mightsay, you know, do we even
want them to have an act ofself dealing? Like can you make gifts
to yourself? And a lot oftimes they'll put that in. They might
limit the amount that you can do, but hey, if you've got a
fiduciary duet to you, you're goingto limit how you give to yourself,

(07:08):
so you can restrict it. Now, remember, a conservatorship is different than
a help, than a power ofattorney. If you've not got a power
of attorney, then you need aconservatorship, which is the power over money
through a court. Right. Thenit's no quick decisions. That's the difference.
Right, you have to deal withcourt approval. You have accountings to

(07:29):
the court. How the money movein and out of these accounts? Why
are you doing things? And youknow what, if you have nothing else,
you got to get that. Yep. If you want to help someone
with their finances. But I don'tlove it over a power of attorney,
When do I love it? Again? There's things to learn about all these
things, pros and cons. Ifyou're in a dysfunctional family and you're named

(07:53):
power of attorney and you're worried thatthe siblings are going to be out of
the woodwork, chasing you, arguing, fighting with you, you blaming you,
good point, then you might say, you know what, I don't
want the power of attorney. I'mgoing to go instead and get a conservatorship

(08:13):
because now everything I do is blessedby the court. Yeah, it takes
more time. But it's going tokeep my family at baby because they're going
to say, what did you whatdid you do? What did you do?
And I'm going to say, Idid everything in accordance with the court
approval. So there's guidance, youknow, looking over that. So in
this case, I think Denise wasreally just fishing because remember Medicaid rate,

(08:37):
private pay rate very different. Ifyou're private paying, it's not uncommon to
run out of money, right,I mean, and you could go on
Medicaid just because you ran out ofmoney. And those facilities can be one
and the same because those private payfacilities, you could have someone in the
same room one perfecs private, oneperson's private paying, and right next to
him getting the same care who's onMedicaid exactly. And that's why I think

(09:01):
it's so important people understand that.Right. But again, a pothole to
avoid is not having a healthcare proxyin place, and a bigger pothole is,
well, why not take it onestep further? If I've got the
healthcare proxy, looks in this case, they actually ended up in a nursing
home. Why not set up thetrust? Why not set up an irrevocable

(09:22):
trust in which I can protect theseassets so that if I got to a
point where I needed nursing home care, which sounds like that happened here,
the assets that would be in thetrust wouldn't have to have been spent down.
They would have been able to beused. You know, they would
have been protected from the cost oflong term care by tucking them away in

(09:46):
there. Yes, they also wouldavoid probate. They also would have,
you know, been provide a nicebloodline plan for the family. Folks,
don't run into these potholes. Learnwhat these potholes are and how to avoid
them by getting the guide the StatePlanning Potholes to avoid. It's our new
guide for the month. And don'tjust rely on things like oh, I

(10:09):
got a nominee realty trust. I'mall set, folks eight sixty six eight
four eight five six nine nine,or go to our website Legal Exchange Show
dot com. You've been listening toTodd Lutsky, a partner with the law
firm of Cushing in Dolar. I'mSusan Powers, a financial advisor with the
Armstrong Advisory Group. We've got muchmore to come when we return to the

(10:33):
Legal Exchange with Todd Lutsky. Creatingthe right estate plan to help secure your
future takes effort. There are plentyof mistakes that you can make, any
one of which could have a dramaticand damaging effect on your financial strategy.
Cushing and Dolan are experts in estateplanning. Their brand new guide is called
Detour a Head Estate Planning Blunders toAvoid. In it, you'll learn about

(10:54):
these critical layers so that you canmake the right decisions to always protect your
assets. As an example, ifyou've created a trust more than ten years
ago and haven't updated it, since, you're setting yourself up for problems.
Cushingan Dolan's new guide will help youaddress issues like this. So call right
now eight six six eight four eightfive six ninety nine and ask for your
copy of our new free guide calledDetour Head His State Planning Blunders to Avoid.

(11:16):
That's eight sixty six eight four eightfive six nine nine, or requested
online from their website Legal exchange showdot com. That's legal exchange show dot
com. The proceeding was paid forand the views expressed are solely those of
Cushing and Dolan. Cushing and Dolanand or Armstrong Advisory may contact you offering
legal or investment services. Cushing andArmstrong do not endorse each other and are
not affiliated. The US Virgin Islandsis the perfect destination for your next vacation.

(11:41):
Visit Saint Croix, Saint Thomas orSaint John and to experience incredible weather,
iconic history, Christine Beach's world classcuisine, and a vibrant night life.
Book now and you might just makeit in time for the Saint Croix
Mango Mayley on July seventh. Thefamily friendly event offers food demonstrations and taste,
cultural dance performances, and the everpopular mango eating contest. From the

(12:05):
moment you arrive, you'll fall naturallyin rhythm with the heartbeat of the islands.
There's no money to exchange, nopassport required, and travel from New
England could not be easier. Makeyour plans now by going to visit USVII
dot com. Learn about all threeislands and plan the ideal vacation for you
and your family. America's Caribbean paradiseis waiting for you, so head to

(12:28):
visit USVII dot com for more informationand to reserve your trip today. That's
visit USVII dot com. A recentreport from law depot dot com says that
only three out of every ten adultsin the US have taken the time to
create in a state plan. Don'tbe a member of that group. Hi,
this is Mike Armstrong from the ArmstrongAdvisory Group. A sound estate plan

(12:48):
can give you control over your assetsand peace of mind as you enter your
retirement years. Our new guide iscalled Leaving a Financial Legacy, and in
it we look at a state planningfrom a financial perspective. It's important to
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(13:11):
today by calling eight hundred three tonine three four zero zero one. That
number again is eight hundred three ninethree four zero zero one, or you
can also request the guide online atArmstrong Advisory dot com. The proceeding was
paid for by Armstrong Advisory Group,a registered investment advisor. Nothing in the
ad or in any Armstrong guide aspecific financial, legal or tax advice.
Consult your own financial, tax,and estate planning advisors before making any investment

(13:33):
decisions. Armstrong may contact you tooffer investment advisory services. You're listening to
the Legal Exchange with Todd Lunsky,an expert in elder life planning and taxation.
Need help with your estate plan?Comtid right now and make an appointment.
Eight sixty six eight four eight fivesix nine nine. That's eight six
six eight four eight five six ninetynine. Welcome back into Legal Exchange with

(13:54):
Todd Lutsky. I'm Susan Powers,a financial advisor with the Armstrong Advisory Group,
and I'm joined by Todd Letsky,a partner with a law firm of
Cushing and Dolan with a master's intaxation. Where are we headed now,
Todd, Well, let's go toWisconsin. We got done talking about powers
of attorney and conservatorships. Let's switchgears and talk about healthcare proxies and guardianships.

(14:22):
That's the two that go hand inhand there. So in this case,
Sarah, she has a neurocognitive disorder, and so her healthcare proxy was
activated by the doctors on July twentytwenty one. And that's important, folks.
It was activated. Unlike the powerof attorney, which can work all

(14:45):
the time, the healthcare proxy needsto be activated, meaning you have to
not be you have to be deemednot to be able to answer questions medically
for yourself, Okay, before that, before doctors can count on talking to
the healthcare agent. Well, inthis case, the grandmother was the primary

(15:07):
agent, interestingly enough, and notthe mother. The mother was the alternate.
Okay. Well. In December twentytwenty one, Nina, a nurse
manager over Sarah, filed for guardianshipand protective placement from where she was because

(15:28):
the healthcare proxy agents, she says, are not readily available to make heightened
medical decisions. And sometimes Sarah wouldrun away and you couldn't find her.
And if she can't find her,they're worried that she's not getting proper food
and shelter, and so you know, they don't the healthcare agents, they

(15:48):
don't go looking for her. Andso interestingly enough, they said they also
noted that Sarah is in some leastrestrictive setting at the moment, which you're
allowed to be in the least restrictivesetting. Well, that was interesting.
So Sarah then testifies for herself thatshe doesn't want a guardianship, right,
she says, I've got family decisionfamily people that can help me make decisions.

(16:11):
So query how dysfunctional perhaps or cognitivelyimpaired perhaps Sarah is, but nevertheless,
well, the trial court granted thepetition and the guardianship and the placement,
putting her into a protective placement,institutionalizing Kay, yeah, I guess

(16:33):
that's what that means. I assumeshe wasn't there and now she is.
Well. Sarah didn't like that,so she appealed. Sarah said that she's
got health care proxy in place,and they make decisions, and basically searching
for someone when they run away isnot a duty of a healthcare proxy.
That's not a medical decision. Callthe police maybe, but you don't have

(16:56):
to physically go search for somebody.And all the parties actually agreed to that
fact that that is not a medicaldecision. They went on to say that
there's really been no evidence presented thatthe healthcare proxies were not available in any
way, that they were not makingmedical decisions as needed, and so they
basically said, we're going to reverse, right, you need to show that,

(17:18):
and they reverse saying that you reallyfailed to show that there was a
need for a private placement or aneed to get rid of these health care
proxies and put a guardianship in place. And folks, remember that's important.
That's why we do a healthcare proxybecause we don't want a guardianship. We
don't want to have to pay someoneto get involved. We don't want to

(17:41):
have to go to court all thetime and get permission for everything we do.
It's better to have a health careproxy and have family members to try
to have your basic docs in place. And folks, this is just a
simple document, but again, apothole to avoid thinking you don't need a
healthcare proxy or a power of attorney. I think that's a pothole to avoid.

(18:06):
Another thing, think about these otherpotholes. You know what about after
someone dies, people take all themoney out of one trust and put it
in the other trust. Folks,that's a huge pothole. Don't do that,
right, don't forget to file incometax returns for your surviving for the
trust that lives on after one dies, you'll need to file different income tax

(18:29):
returns. Don't sit back and sayI just got a will, I'm all
set. You know, how doyou know your trust is funded? Look?
Check it out. Make sure it'sfunded. If it's not funded,
it's not helping you. So there'sso many things to think about in your
estate plan, and if you haven'tdone them, this will help you to
think about them before you do them. And if you've already done your plan,

(18:52):
this will dust it off and makesure you've got these ducks in a
row. State planning potholes to avoideight six six eight four or eight five
six nine nine or Legal exchange Showdot com New Guide for the Month eight
six six eight four eight five sixnine nine or Legal Exchange show dot com.

(19:14):
Where are we headed now? Overto? Oh, we're still in
Wisconsin. We got to talk.We got I'm ahead of myself. We've
got to we've got to learn whywe What can we learn from this case?
Well, here's what we learned.First, what is a healthcare proxy?
A healthcare proxy, if you haven'tfigured it out, is it allows
somebody else to make medical decisions.And I focus on the word medical because

(19:37):
it's medical decisions. It's not goingto bind a guardian, it's not going
to bind an arbitration agreement. Wetalked about that medical decisions. Apparently,
running after someone when they run awayis not a medical decision, and it's
nice to have those. It's betterthan a guardianship. Remember, without a
healthcare proxy, well, the medicaldecisions are important. You can't even place

(19:57):
someone into a long term care facility, right, like a spouse isn't allowed
to do that. You need tohave the healthcare proxy. If you don't,
then you will need to go geta guardian, a guardianship, because
remember, the guardianship is over theperson. The conservatorship is over the money.
Okay, So when I'm picking ahealth care proxy, who do I

(20:18):
pick? Well, again, Ithink in this case geography matters. Not
my number one child now meaning theoldest, right, meaning the oldest,
Yes, because I'm the youngest andI was your number one anyway. Yeah,
So when I say geography, right, you want someone that's relatively close
by, so they can, youknow, come see you, they can

(20:41):
get you to a doctor, theycan they can be readily available to run
in and talk to a doctor.And and so having someone you know close,
not necessarily emotionally close, but geographicallyclose is important. And remember pick
the person too that's good with thosedecisions, that's emotionally strong. So when

(21:03):
you're picking it, do that Now, a guardianship, as I said,
is the power over the person,and these can still be helpful. We
talked about the healthcare proxy. Whenwould you use the guardianship? Again,
not so easy to revoke a healthcareproxy, which is nice, that's why
you do them. But sometimes ifyou don't have the healthcare proxy in place,

(21:25):
or even if you do, butyou realize that one of the potholes
I want to avoid is not havingmy planning done. And you realize at
this point that oh my gosh,we're in a healthcare situation or where you
know, and we got someone who'skind of losing capacity, but they haven't
done their trust. I want tomake sure we get the trust done.

(21:47):
How do we go about that ifthere is a healthcare proxy and and no
documents in place? Two options oneguardianship. Guardianships do have a place and
they can be used. The guardianshipallows you then to have the court appoint
a guardian, a guardian ad lightemover the ward. You then explained to

(22:14):
the ward why it's a good ideato do the planning. Yep. And
then you and the and the guardianad lightem. I'm sorry, you explained
to the guardian ad lightem and thenboth the guardian ad lightem which is an
attorney appointed by the court, andyou your attorney, go to the court
and explain we both agree that doingthis estate plan is in the best interest

(22:36):
of the ward. Great, theybless it, and you go do an
estate plan like a trust. Can'tdo a will, but you can do
the trust. Great, get itdone, get it in place time.
If you don't have your basic docksin place, pothole is certainly a pothole,
is not planning at all, Butthat's helpful. Or double check your
power of attorney. The power ofattorney we talked about earlier might give you

(22:59):
the po to create and fund revocableand irrevocable trust. That's the language you
want to see in the power ofattorney. If it's there, you might
be able to get the power.You might be able to use the power
of attorney to create the trust.So even if no planning was done,
it's never too late. You mightneed the guardianship. Folks, avoid all

(23:21):
these potholes of not planning, orif you've done your planning, learn about
some of these mistakes that might bemade, like my trust is funded or
not funded estate planning Potholes to Avoideight six y six eight four eight five
six nine nine or Legal Exchange showdot com. You've been listening to Todd
Lutsky, a partner with the lawfirm of Cushing and Dolan. I'm Susan

(23:42):
Powers, a financial advisor with theArmstrong Advisory Group. Todd will be answering
your lessener questions next when we returnto the Legal Exchange with Todd Lutsky.
Creating the right estate plan to helpsecure your future takes effort. There are
plenty of mistakes that you can make, any one of which could have a
dramatic and damaging effect on your financialstrategy. Cushing and Dolan are experts in

(24:04):
estate planning. Their brand new guideis called Detour Ahead Estate Planning Blunders to
Avoid. In it, you'll learnabout these critical layers so that you can
make the right decisions to always protectyour assets. As an example, if
you've created a trust more than tenyears ago and haven't updated it, since,
you're setting yourself up for problems.Cushing and Dolan's new guide will help
you address issues like this, Socall right now eight six six eight four

(24:26):
eight five six niney nine and askfor your copy of our new free guide
called Detour a head estate planning Blundersto Avoid that's eight six six eight four
eight five six ninety nine, orrequested online from their website Legal exchange show
dot com. That's Legal exchange showdot com. The proceeding was paid for
and the views expressed are solely thoseof Cushing and Dolin. Cushing and Dolan

(24:47):
and or Armstrong Advisory may contact youoffering legal or investment services. Cushing and
Armstrong do not endorse each other andare not affiliated. At twenty twenty three,
report from law depot dot com showsthat seventy three percent of US adults
don't have a document to the stateplan. Hi. This is Mike Armstrong
from the Armstrong Advisory Group. Youdon't want to be a member of that
group. Proper estate planning is acritical element to you being able to pass

(25:08):
along your assets to your family intoenjoying your retirement years. If you want
to avoid making mistakes that could preventyour family from benefiting from your financial success,
then call our office today and askfor a copy of our new guide
called Leaving a Financial Legacy. Wetackle critical estate planning topics such as long
term care costs, estate taxes andmore, all from a financial standpoint.

(25:29):
Call today at eight hundred three ninethree for zero zero one and get your
copy of this free guide eight hundredthree nine three for zero zero one,
or you can request it online fromour website Armstrong Advisory dot com. The
proceeding was paid for by Armstrong AdvisoryGroup, a registered investment advisor. Nothing
in the ad or in any Armstrongguide is specific financial, legal or tax
advice. Consult your own financial taxinto state planning advisors before making any investment
decisions. Armstrong may contact you tooffer investment advisory services. The US Virgin

(25:55):
Islands is the perfect destination for yournext vacation. Visit Saint Croix or Saint
John and to experience incredible weather,iconic history, Christine Beach's world class cuisine,
and a vibrant nightlife. Book nowand you might just make it in
time for the Saint Croix Mango Maleeon July seventh. The family friendly event
offers food demonstrations and tastings, culturaldance performances, and the ever popular mango

(26:21):
eating contest. From the moment youarrive, you'll fall naturally in rhythm with
the heartbeat of the islands. There'sno money to exchange, no passport required,
and travel from New England could notbe easier. Make your plans now
by going to visit USVII dot com. Learn about all three islands and plan
the ideal vacation for you and yourfamily. America's Caribbean paradise is waiting for

(26:44):
you, so head to visit USVIIdot com for more information and to reserve
your trip today. That's visit USVIIdot com. You're listening to the Legal
Exchange, and it's time for AskTodd, the segment where Todd will answer
your questions about anything and everything that'sincluded in the estate planning process. Once
again, here's Todd, Lutsky andSusan Powers welcome back to We have a

(27:08):
few questions from listeners. First questioncomes from Ron in Freetown, mass and
Ron writes, my wife is currentlyin a rehab facility after having fallen recently,
and it's likely she'll not be ableto return home due to her memory
issues. We haven't done any planningto protect our assets, but we do
have a revocable trust of power attorneyin the healthcare proxy. Our home is

(27:30):
worth four hundred thousand. We havearound eight hundred thousand in iris split evenly
and other investments and savings of fourhundred thousand. What are my options now?
So this is certainly a pothole,but it's one that again could have
been avoided by doing planning. Butthe planning they did was not nursing home

(27:52):
planning, and that happens to alot of people, right, it's not
that it's a bad thing. Maybewhen they did this, they were much
younger and they felt that revoke trustplanning made sense and they never what revisited
their estate plan over time. Soyou're faced with what we call last minute
looks like last minute medicaid type planninghere because the revocable trust, while they

(28:15):
have it, never will start thefive year clock running, folks, So
it will never help you protect theassets. So what can we do or
we're going to take it out,We're going to empty the revocable trust.
We're going to say, put thehome ron in your name alone. And

(28:36):
by the way, you're allowed totransfer assets between spouses, so that's not
a disqualifying transfer, and Ron,as a healthy spouse, is allowed to
live in the house. It doesnot matter how much the house is worth,
it will be considered non countable andnon leanable. Nice, very helpful.

(29:00):
So it's yours that comes off thetable, and that was worth about
four hundred. But okay, westill have eight hundred thousand dollars it looks
like in iras and iras, soabout four each and another four hundred in
investments off of that. Yep.So unfortunately we're going to take the four

(29:22):
out of her Ira. So justcompletely withdraw it. Yeah, you have
to. It's a big tax bill, it is. But I think at
four hundred thousand, I can probablystomach that. Right, four hundred it'll
put you. It won't be inthe top bracket for all of it.
Remember that's going to be staggered.So even if you average thirty percent,
right, you know, four timesthrees, I lose one hundred and twenty

(29:42):
thousand dollars. Yeah, but ifit's if I'm saving fifteen thousand a month
from the nursing home, I don'tthink it's going to take very long to
make up one hundred and twenty thousanddollars and then some because it would just
keep bleeding after that. So Ithink you do have to consider the income
tax. But in this case,the number small enough that I would probably

(30:03):
take the hit, move the moneyover to the four hundred thousand in the
savings and checking accounts, take thatcombined eight hundred thousand, and buy a
Medicaid annuity for Ron, converting theasset yep, no for Ron, my
wife from sorry, buying it forRon. So then Ron would would convert

(30:27):
that asset to an income stream andthat asset goes away and he gets a
monthly check. So that's not countable, right, not countable. That still
leaves his four hundred thousand in theIRA, which we don't have to liquidate
and take out, but we wouldneed to buy a separate annuity inside the
IRA. In that way you're notgetting hit with the huge taxis spreading it

(30:48):
right, you're spreading that out,and so the money would be the same
idea converting the money in the IRAto a annuity. You know. Again,
remember he gets to keep one hundredand fifty thousand in cash, so
you can keep that as well.So can there be something done? Yes,
So that was a huge pothole thatwe were able to navigate in this

(31:08):
case. And so run if youneed help on that, please seek it
and don't write to check. Butfor everybody else, avoid these potholes.
Get your estate planning done. Inthis case, if they had revisited their
trust planning, which is a potholeto avoid, right, they might have
said it's time to change from arevocable to an irrevocable trust years ago.

(31:30):
So some potholes are you think you'vedone your planning ten years ago and you're
all set, pull it out,look at it, revisit it. You
think yours is funded, look atit see if the assets are in there.
It might not be funded. Don'trely on a will, don't say
I've got a nominee realty trust thatI'm all set. I mean, folks,
these are things to think about.Look at your existing plan or learn
if you're going to do your ownplanning, about potholes to avoid before you

(31:53):
start. Eight six six eight foureight five six nine nine or Legal Exchange
Show dot com again New guide eightsix six eight four eight five six nine
nine or Legal Exchange Show dot comtodd. Our last question comes from Sharon
in Woostermass and Sharon Wrights. Myparents created an irrevocable trust thirteen years ago.

(32:17):
I used your tip and checked thetax bill, but the trust isn't
listed. My parents are I founda copy of the deed they signed in
two thousand and three, but itdoesn't look like it was ever recorded by
the attorney. Has all this timebeen wasted? Is there anything we can
do now to back the date onthat transfer? So again, these are

(32:38):
potholes. These are problems that peopledo run into when you happen. Now
in this case, we're gonna wipeour brow again. Both of these were
We were able to manage the pothole, but you have to understand how and
why. So in this case,I had an actual fair hearing like this
once where very similar facts, butthe person actually was headed into the nursing

(33:01):
home right. And someone else appliedfor medicaid and got denied. They got
denied because they had found the deedunrecorded and recorded it and then applied for
medicaid. And the state said,well, since you just recorded the deed,

(33:22):
your five years hasn't run, whichis what you're asking in this or
which is what Sharon's asking in thisquestion. And so I took a look
at the regulations and I couldn't findanything in the medicaid regulations that said the
deed had to be recorded in orderfor the transfer to be completed. And

(33:46):
so then I closed those books andopened the books for Massachusetts real estate law
and wanted to find out what thelaw is regarding the transference of property and
the property. It says, aslong as it's a two pronged test,

(34:07):
if you have an executed deed,which clearly they have here, and you
have delivery, which is obviously thehardest thing to prove, then the ceremonial
recording at the Registry of Deeds isnot required to transfer title. Interesting,

(34:30):
so I said, wow, sothe recording isn't what matters at all.
Go and record the deed which thisperson did do, and that should not
restart the five year clock. Infact, it should not begin the five
year clock. In fact, ithas no bearing on the five year clock.
So then you just have to beable to go back and in this

(34:51):
case figure out whether or not youhave the executed deed what you do,
and that delivery part is the problem, where you were able to ensure that
it was delivered to the person whogot it right. So in my case
that I had the fair hearing forthere was a trust put together an irrevocable
medicaid trust and the property was rented, and so I was able to show

(35:15):
that. The trustee opened up abank account, got an ID number for
the trust. Deposits were made intothat trust account. Tax returns were filed
for that trust reflecting the rent thatwas being deposited in the trust. And
I said, clearly, you havedelivery. If you didn't have delivery,
the trustee wouldn't know to do allthis stuff. So we were able to

(35:35):
prove delivery. We were able toshow the execute a deed, and we
were able to win that fair here. So it kind of sounds to me
like this ceremonial recording of the deedsit's just a money grab for recording fees
from the state. Well, it'sgood to let the world know who owns
the property. That's really what it'sdesigned to. Yeah, some people will
do those changes with their deeds andthey won't even know that. Like you

(35:59):
think of the people that put theirhouse in the name of their kids,
Mmm, not recommending, I don'tknow, and then the kids find out
later on they actually own their parents'house. That's right, They didn't even
know. Yeah, I mean,and that's the thing but again you go
to the registry. These are thethings that are done. So that's the
issue, folks. But I thinkthe better approach here is to make sure
that you revisit your plan once ina while. Learn about the potholes to

(36:22):
avoid eight six' six eight foureight five six nine nine, or go
to our website Legal Exchange Show dotcom to avoid making mistakes, or learn
about ones you've already made and maybehow to fix them. If you have
a question you would like to askTodd, visit his website Legal Exchange Show
dot com and click on the askTod tab. Maybe I'll be able to

(36:45):
read your question on the air,and hopefully his answer will stop you from
becoming one of his next real lifestories. You've been listening to Todd Lutsky,
a partner with the law firm ofCushing and Dolan. I'm Susan Powers,
a financial advice with the Arts StrongAdvisory Group. We'll be back with
more after this quick break on theLegal Exchange with Todd Letsky. Creating the

(37:07):
right estate plan to help secure yourfuture takes effort. There are plenty of
mistakes that you can make, anyone of which could have a dramatic and
damaging effect on your financial strategy.Cushing and Dolan are experts in estate planning.
Their brand new guide is called DetourAhead Estate Planning Blunders to Avoid.
In it, you'll learn about thesecritical a layors so that you can make
the right decisions to always protect yourassets. As an example, if you've

(37:30):
created a trust more than ten yearsago and haven't updated it, since,
you're setting yourself up for problems.Cushing and Dolan's new guide will help you
address issues like this. So callright now eight six six eight four eight
five six nine nine and ask foryour copy of our new free guide called
Detour Head Estate Planning Blunders to Avoid. That's eight six six eight four eight
five six ninety nine, or requestedonline from their website Legal exchange show dot

(37:52):
com. That's Legal exchange show dotcom. The proceeding was paid for and
the views expressed are solely those ofCushing and Dolin. Cushing and nolanand or
Armstrong Advisory may contact you offering legalor investment services. Cushing and Armstrong do
not endorse each other and are notaffiliated. A recent report from law depot
dot com says that only three outof every ten adults in the US have
taken the time to create an astate plan. Don't be a member of

(38:15):
that group. Hi, this isMike Armstrong from the Armstrong Advisory Group.
A sound estate plan can give youcontrol over your assets and peace of mind
as you enter your retirement years.Our new guide is called Leaving a Financial
Legacy, and in it we lookat a state planning from a financial perspective.
It's important to have a strategy thataddresses your investment portfolio and all of
your holdings, including real estate.We'll also focus on other issues, such

(38:37):
as how to manage long term careexpenses that may affect you down the road.
Get your guide today by calling eighthundred three nine three four zero zero
one. That number again is eighthundred three nine three four zero zero one,
or you can also request the guideonline at Armstrong Advisory dot com.
The proceeding was paid for by ArmstrongAdvisory Group, a registered investment advisor.
Nothing in the ad or in anyArmstrong guide a specific financial, legal,

(38:59):
or tax advice. Consult your ownfinancial, tax into state planning advisors before
making any investment decisions. Armstrong maycontact you to offer investment advisory services.
The US Virgin Islands is the perfectdestination for your next vacation. Visit Saint
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(40:05):
com. To be engaged, youmust feel included and valued. The dav
Department of Massachusetts Nurture is a culturewhere inclusiveness is a reflex not an initiative,
where there's a deep sense of pride, passion, and belonging that is
unified in our shared commitment, dedicationand patriotism for our country. We know
through experience that different ideas, perspectives, and backgrounds create a stronger and more

(40:29):
creative organization that delivers better results forthe veterans and families we strive to assist.
For more information, visit dav Madot org. He'll exchange with Todd
Lutsky. If you are a lovedone needs a nursing homes day, call
Todd right now at eight sixty sixeight four eight five six ninet nine and
let him make sure your assets areprotected. That's eight six six eight four

(40:49):
eight five six nine nine, orvisit him online at Legal Exchange show dot
com. Welcome back into the LegalExchange with Todd Lutsky. I'm Susan Powers,
financial Advisor of the Armstrong Advisory Groupand I'm joined, of course by
Todd Lutsky, a partner with thelaw firm of Cushing and Dolan with a
master's in taxation. You know,throughout the course of today's show you've alluded

(41:13):
to folks should be kind of dustingoff their plan and reviewing it occasionally,
other than saying, oh, tenyears has gone by, kind of as
a timeline, you need to makesure it's still doing what it should be
doing for you. There are certainlife events that can trigger either a review
of your documents or a revision.Something might need to be changed. So

(41:37):
I just want to go through sopeople know when these things happen in their
lives, something might need to bedone in terms of their estate plan.
Sure, what do you do whenyou lose a spouse? Yeah, that's
a great one. You know,when you lose a spouse, you know
one you might have an estate planalready in place. Please go to your
lawyer and explain you've lost a spouse, because there are going to be things

(42:01):
that needed to be done. Right. One, there's a state work to
be done, dealing with the decedentstrust, making sure that it's funded properly,
making sure the buckets are created toshelter assets for a state tax purposes,
making sure that they advise you notto empty it and put all the

(42:21):
assets in the surviving spout. Right, get that stuff done. That's the
estate side, yep. But nowyou're single, you now need to modify
your existing plan as a single person. It might be simply just updating your
health care proxy, power of attorneyand will to name a new primary since

(42:43):
the primary fiduciary is deceased, anda new alternate and that might be all
you need. If you had,on the other hand, done perhaps revocable
trusts when you were before your spousedied, might be time to revisit and
switch what kind of trust you did. Who knows, but absolutely attention is

(43:05):
required at that point. So aswe age, our children may get married,
We may or may not enjoy thecompany of our children's spouses. What
if you have concerns that your childis going to end up divorced in the
future. Yeah, I mean,I think that's important for a lot of
reasons. Number One, you sayas we age, right, So as
we age, you might have doneyour planning years ago, and now kids

(43:29):
have grown married, have kids,and who they're married maybe triggers that response,
yep, Or just because they've beenmarried a long time and you're seeing
cracks in the marriage, right,So any of those things are reasons to
look at it, and if so, pull out your documents. That you've
already done, and check how you'releaving the assets. That was all last

(43:52):
month. Remember how you leave assetsto beneficiaries, and see if it's outright.
When I say outright, I meandivide into as many equal shares as
there are children and pay it out. Oh, all bets are off.
If you do that, you knowthe assets are going to be at risk
for the divorce. If, onthe other hand, if there is,

(44:15):
then you've got to change. Ifon the other hand, it says we're
holding assets in trust to be paidout in the sole discretion of the disinterested
trustee to the kids, well nowit's protected right now. At least I'm
just giving you the rough language.But at least that gives you reason to
say, oh, pause, maybeI'm okay, I'm protected right. In

(44:36):
fact, I got to call yesterdayor the other day last week about a
client long time daughters getting divorced.They're asking about our state planning documents,
and I said, okay, hegoes, but didn't we provide divorce protection.
We looked it up and I said, yeah, we've got the divorce
language in there. So I said, you're all set. Well, they're

(44:59):
going to probably subpoena the documents.I said, save them the trouble send
it over. Yeah, I go. I think you're gonna be fine.
So but that's important, right tothink about that. So, so those
are changes that you might need tomake. You know what, folks,
I think there could be other reasonsyou need to check your estate plan and
detours for estate planning potholes ahead toavoid would mean if you've done your plan,

(45:23):
we've just described why you should dustit off and look at it.
If you haven't done your planning,learn about read this and it'll give you
ideas as to what you should doright. We're not going to rely on
our estate planning documents as a willonly. You're going to fund your trust
and if it's not funded, getit funded right. Check and see how

(45:44):
what needs to be done after aspouse dies. Learn about the best way
to get your estate plan in asgood an order as you can get this
guide eight six six eight four eightfive six nine nine or Legal Exchange Show
dot com and avoid the estate planningpotholes eight sixty six eight four eight five

(46:07):
six nine nine or Legal Exchange Showdot com. So, Todd, let's
say you started, you did yourplaning. You did revocable trust planning when
you're a little bit younger. Nowyou're older and you've accumulated a higher net
worth, At what point does yournet worth warrant changing how the type of

(46:29):
planning that you're doing. So thisis, I guess an interesting idea.
You have to look at state lawand federal law. State exemptions and federal
exemptions. So clearly, if you'reworried about the federal exemption, which is
good, and I'm going to starttalking about it. In terms of the
twenty twenty six number, which isaround seven million, we're guessing around seven

(46:52):
million. So if you're married andyou have fourteen million, or you're worried
you're less than fourteen million in overseven you're really not even thinking about nursing
home planning at all, right,because your self insured. So if you're
thinking about the federal exemption, you'reprobably not worried. Period. If you

(47:14):
have to pause and look at thestate exemption, well, now maybe it's
lower. Right. The state exemptionis two million per person if you plan,
so that's four million. So ifyou're somewhere in the two million range
three million range, and you're sayingand again, a lot of that might
be real estate, might be homein a vacation home, and we'll grow
it, will continue to appreciate.That's not liquid. And if you're saying,

(47:36):
well, jeez, if I getsick and go to the nursing home,
I might not have the ability topay very long. I might be
concerned about protecting my spouse who's notsick, and wanting my spouse to be
able to live comfortably and maintain thereal estate that we have. Yeah,
well, I think then you couldsay, well, I only have a

(47:57):
revocable trust in place, which willinfact utilize my four million dollars of Massachusetts
exemption as a married couple, avoidprobate, and provide for the bloodline plan
for the family. But then yourealize it's not doing anything for the nursing
home. And now that I'm older, I should consider that. So yes,

(48:22):
that's when I would consider it andswitch from the revocable to the irrevocable,
because now I can accomplish everything Iwas doing with the revocable, but
add nursing home protection, so youcan accomplish both the state tax reduction and
protection. It really does add alot, and I think You're right,

(48:45):
Susan. Increasing your net worth andyour age are two very important things to
put together when you're looking at updatingyour estate plan. So a lot of
people have the dream of relocating somewherewarm when they get into retirement. If
you've done your planning, whether it'srevocable or irrevocable, what do you have

(49:07):
to do if you're going to relocateto another state. Well, that's going
to be an entire show. Giveme the crib sheets. I can tell
you that there's so many things tothink about when you're doing that, folks.
But you know, I think thatthe quick answer is moving by itself
is not enough. You need toupdate your estate planning documents for sure.

(49:29):
Maybe not your trust revocable or irrevocable, but your healthcare proxy, your power
of attorney. We talked about thosein the show today. State specific,
Yeah, the will state specific.You want those, and then again that
helps show your intent that I'm nowa resident of this state. So changing
those critically important. And another thingthat is critically important. Again, this

(49:52):
is not an exhaustive list, butyou know, did I leave any Massachusetts
real estate? Five left Massachusetts?Yeah? And is it in my name?
And if it is, I can'tleave it that way because the government
is going to tax it even thoughI'm a non resident. If I'm successful
in proving so, hi, I'ma non resident, and so you need

(50:14):
to convert that into an intangible byputting it into an LLC. Just quick
answers for that and loll on theguide. Lots more to note, folks.
Get the guide, learn about theestate planning potholes to avoid, how
to fix your plan, how tochange it, make it better eight six
six eight four eight five six ninenine, or Legal Exchange show dot com

(50:36):
and download it there. Todd Lutskyfrom the law firm of Cushing and Dolan,
thank you so much. Thank you, Susan, always a pleasure.
I'm Susan Powers, a financial advisorwith the Armstrong Advisory Group, and we
thank you for joining us today andwe'll be back again next week on the
Legal Exchange with Todd Lutsky. Creatingthe right estate plan to help secure your
future takes effort. There are plentyof mistakes that you can make, any

(51:00):
one of which could have a dramaticand damaging effect on your financial strategy.
Cushing and Dolan are experts in estatePlanning. Their brand new guide is called
Detour Ahead Estate Planning Blunders to Avoid. In it, you'll learn about these
critic a layers so that you canmake the right decisions to always protect your
assets. As an example, ifyou've created a trust more than ten years
ago and haven't updated it, since, you're setting yourself up for problems.

(51:22):
Cushing and Dolan's new guide will helpyou address issues like this. So call
right now eight six six eight foureight five six nine nine and ask for
your copy of our new free guidecalled Detour a Head Estate Planning Blunders to
Avoid. That's eight six six eightfour eight five six nine nine, or
requested online from their website Legal Exchangeshow dot com. That's Legal exchange show

(51:43):
dot com. The proceeding was paidfor and the views expressed are solely those
of Cushing and Dolan. Cushing andDolan and or Armstrong Advisory may contact you
offering legal or investment services. Cushingand Armstrong do not endorse each other and
are not affiliated. The US VirginIslands is the perfect destination for your next
vacation. Visit Sant Saint Thomas orSaint John and to experience incredible weather iconic

(52:04):
history, Christine Beach's world class cuisine, and a vibrant nightlife book now and
you might just make it in timefor the Saint Croix Mango Melee on July
seventh. The family friendly event offersfood demonstrations and tastings, cultural dance performances,
and the ever popular mango eating contest. From the moment you arrive,
you'll fall naturally in rhythm with theheartbeat of the islands. There's no money

(52:28):
to exchange, no passport required,and travel from New England could not be
easier. Make your plans now bygoing to visit USVII dot com. Learn
about all three islands and plan theideal vacation for you and your family.
America's Caribbean paradise is waiting for you, so head to visit USVII dot com
for more information and to reserve yourtrip today. That's visit USVII dot com.

(52:53):
A twenty twenty three report from lawdepot dot com shows that seventy three
percent of US adults don't have adocumented estate plan. Hi, this is
Mike Armstrong from the Armstrong Advisory Group. You don't want to be a member
of that group. Proper estate planningis a critical element to you being able
to pass along your assets to yourfamily and to enjoying your retirement years.

(53:13):
If you want to avoid making mistakesthat could prevent your family from benefiting from
your financial success, then call ouroffice today and ask for a copy of
our new guide called Leaving a FinancialLegacy. We tackle critical estate planning topics
such as long term care costs,estate taxes, and more, all from
a financial standpoint. Call today ateight hundred three nine three for zero zero
one and get your copy of thisfree guide eight hundred three nine three for

(53:37):
zero zero one, or you canrequest it online from our website Armstrong Advisory
dot com. The proceeding was paidfor by Armstrong Advisory Group, a registered
investment advisor. Nothing in the ador in any Armstrong guide is specific financial,
legal or tax advice. Consult yourown financial, tax into state planning
advisors before making any investment decisions.Armstrong make contact you to offer investment advisory services.