The Legal Exchange: Saturday Edition - Saturday, February 8, 2024

Episode Transcript

Speaker 1 (00:00):
This is the Legal Exchange with Todd Lutsky from the
law firm of Cushing and Dolan and Susan Powers of
the Armstrong Advisory Group. Each week, Todd and Susan will
discuss many topics, including estate planning, how to avoid probate,
and protecting your money from a nursing home. If you
need assistance in any of these areas, or have a
question about another issue that may affect your future, call

(00:21):
eight sixty six eight four eight five six ninety nine
to make an appointment. That's eight six six eight four
eight five six ninety nine. Operators are standing by. Now
Here are your hosts, Tod Lutsky and Susan Powers.

Speaker 2 (00:36):
Welcome into the Legal Exchange with Todd Letsky. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Whoop, and I'm
joined by Todd Lotski, a partner with the law firm
of Cushing and Dolan with a master's in taxation. Welcome Todd.
How are you today?

Speaker 3 (00:51):
I am never better in you.

Speaker 2 (00:52):
I'm great? Thank you. What do you have for us
this week?

Speaker 3 (00:54):
Couple of things. One, we've got a Texas Supreme Court case,
so it's like the super Bowl. Well it's Super Bowl.
So a Texas Supreme Court case dealing with basically a
lost will, but more importantly how and whether or not
unsworn testimony regarding the lost will and the presumption of
revocation of a lost will that goes with it should

(01:18):
or should not be taken into account in deciding whether
the will was in fact presumed revoked or not. So
and of course there's lots of other lessons I'm going
to teach you from this particular case, and then I'm
back to a real life story. So I haven't had
a fair hearing in a while, which is great news
telling everybody that the Medicaid trusts actually work. And this

(01:41):
one was a New Hampshire situation. So I want to
explain that, and it's our trust, and it was a
big win weally for a irrevocable Medicaid trust to explain
how it works, why it works, how they lived with
it their whole lives until someone did get sick. And
then the problem that occurred here is, of course the
kids decided to apply for medicaid on their own. Well,

(02:03):
that didn't go over so well, and so they called us,
and then we had to get things back on track,
but a very very good positive story on irrevocable trusts,
which actually leads me to the guide because the guide
is back to the basics, but it's it's really more
about a real life story. It's your fact pattern, it's

(02:24):
a person, it's a family fact pattern. Assets listed. You
can put your own assets into this and then see
it's not like an engagement letter. I recommend an entire
estate plan in here, So if you've never gotten started
doing estate planning, this guide is for you. It does
deal with an irrevocable trust that was their decision, but
it also talks about the will and the health care

(02:46):
proxy and the power of attorney and the hip a
guide and all the basic documents that kind of get
you know, a cursory review all the time, but they
lay it out in this guide for you as well.
So it really brings a whole estate plan to together,
the basic documents and a recommendation for the client on
an irrevocable trust in this case and how it works.

(03:08):
See how you can get started with your estate plan.
Back to the basics, folks will really get you off
and running eight six six eight four eight five six
nine nine or legal Exchange show dot com. You can
download it there again eight sixty six eight four eight
five six nine nine or legal exchange show dot com Texas.

(03:31):
Let's go there.

Speaker 2 (03:32):
I'd like to probably a little warmer.

Speaker 3 (03:34):
Yeah, well, I don't know, they got snow lately. So
Myrtle created a will in August of two thousand and nine,
naming her cousin Annabelle the beneficiary and the PR. Well,
they had a falling out shortly after that, so Myrtle
did a new will in October of two thousand and nine,

(03:57):
so it wasn't that much later. She pointed to Beverly
the PR and the beneficiary. I'm sorry, Beverly was the
PR and the beneficiary was the Humane Society, so now
she's gone to charity. Well, shortly after that, Kathy, an attorney,
was appointed guardian for Myrtle, And so that makes me

(04:18):
think about capacity issues. Why was did we need a
guardian for Myrtle shortly after she created that will? But
that really didn't come up much. Myrtle then died in
August of twenty eighteen, so nine years later, well, Beverly
was appointed the PR, so she probated a copy of

(04:42):
the October will. Stating that they couldn't find the original
will and it couldn't locate it and that it was
accidentally disposed of during the guardianship. Well, Kathy the attorney
and the guardian she filed a determination of airship at

(05:02):
and the Humane Society, and Beverly objected. Well, Cathy had
unsworn testimony saying that the caretakers were stealing from her
the papers when she got there had all gone through,
they were all in disorder, disarray. She searched for the will,
she couldn't find the will. All this testimony she has,
and you know, and Myrtle was very easily exploited. So

(05:25):
Cathy searched, couldn't find the will, and no one objected
to her unsworn testimony. Okay, Well, the trial court refused
to probate the October will, saying, you know what, there
wasn't enough evidence presented to prove that the October will
had not been revoked. Folks. Remember, there's a presumption of
revocation when you can't find the will, the original will,

(05:48):
presumption of revocation, and you've got to overcome that presumption.
And the trial court said, Nope, we're not going to
do it because there wasn't enough. So where does that
leave you. Well, maybe the August nine will, if that's around,
that's going to carry the day. Well, the Humane Society
didn't like this, so they appealed, and the appelled court

(06:09):
affirmed the trial court. Well, they still didn't like it,
so they appealed again to the Supreme Court, who reversed.
Really now why they reverse, Well, they said the lower
court really should have considered the unsworn testimony of Kathy.
They didn't. They ignored all that testimony of Kathy because
it was not sworn testimony. No one objected, right, So

(06:32):
the Supreme Court said, look, Kathy is not only an attorney,
she's an officer of the court and a guardian. And
no one objected to her testimony, so her testimony should
have been considered. Yeah, when determining this case. So they
remanded it. I know you don't like that.

Speaker 2 (06:52):
You didn't give us an answer, So.

Speaker 3 (06:56):
They remanded the case to say, listen to this testimony.
Now remember if you didn't, So what do we learn here?
You know, first and foremost, keep your records right. So
we don't know right now if the October will is
going to work or not. I think at the end
of the day when they listen to her testimony, that

(07:16):
that's enough evidence to show that they overcame the presumption
of revocation. They couldn't find it for all these bad
reasons that the you know that was being done to
the to the caretaker by the caretakers. I'm sorry, the
caretakers were stealing all our papers. That's probably what happens. Oh,
that might be a reason that we can't find it,

(07:37):
not that it was revoked, so they can overcome that presumption.
So I think we're probably going to be okay here,
but we don't know. What do we learn here? Folks
keep your records right always, and this is why when
you work with a lawyer, right like, I know what
we do it. We keep the originals. Clients can have them,
but if they want them, but they always let us
keep the originals. We provide a nice book, we provide

(07:58):
a thumb drive. We say, if you lose your book,
print off another one on your thumb drive. We keep
the originals and a soft copy. You lose everything, you
call us up, we give you another one. Not a problem.
So by working with a lawyer, you generally will not
have this lost document right problem. I mean that should

(08:19):
be the kese. So that's first and foremost. Another lesson
we learned is I get a common practical question from people.
They're always asking me, you know, okay, we did all
this to stay planning. Well, how do we know it's
going to work when we're dead? Fair question? And I
can tell you thirty years of doing this, folks, it
is almost instinctive. The kids find the book. Yes, they

(08:44):
open the book. There's our letterhead. Yep, they say, better
call this number because we don't know what to do next.

Speaker 2 (08:52):
See what the next step is?

Speaker 3 (08:53):
Absolutely, and so folks, it really does just work, and
it really works like that. So so they come in
and then we explain everything, We tell them the next steps,
and everything goes smoothly. Now, lastly, right, this was an
you know what would happen here? What's the result one
way or another? Right? So, if the October will is

(09:16):
no good, the charity's out right. And if the October
will is no good, but they found the November the
August will, and that will prevail because it says it
revokes prior will, so that will prevail. Right, And it
seems like the cousin Annabelle would take well, if there's

(09:37):
no will altogether, Annabelle still might be the one that takes,
depending on who's the next closest next of kin. Basically, folks,
A will, though, is a won't. It won't avoid probate,
it won't reduce the state taxes if you're married. It
won't protect assets from the nursing home.

Speaker 1 (09:53):
You know.

Speaker 3 (09:53):
It just directs where your assets go. My advice to
you is do way more planning than just a will.
Get the guide, get back to the basics and get
your plan going today. Learn how to do it eight
sixty six eight four eight five six nine nine or
Legal Exchange show dot com. Back to the basics will

(10:14):
get you off the dime and help you know which
way to plan.

Speaker 2 (10:19):
You've been listening to Todd Lutsky, a partner with the
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group. We've got much
more to come when we return to the Legal Exchange
with Todd Lutsky.

Speaker 1 (10:34):
If you're nearing retirement agent are concerned about how to
protect your assets, you need to call Cushing and Dolan
the experts and know their law. Their new guide is
called Back to the Basics, and it will help you
create a plan that will help you understand issues like
avoiding probate, passing your assets along to your family, and
potentially eliminating your estate taxes. This free guide has all
the information you need to build a safe and secure

(10:56):
estate plan that will give you peace of mind as
you close in on retirement. Call eight eight four eight
five six ninety nine right now and request your free
guide today. You can also request a no obligation consultation
to review any current planning you've done. Cushing and Dolan
have been helping families like yours for thirty years. Let
them help you too. Get their new guide, called Back
to the Basics today Call eight six six eight four

(11:18):
eight five six ninety nine, or request the guide online
by visiting Legal exchange show dot com. The proceeding was
paid for and the music expressed are sole leados of
Cushing and Dolan. Cushing and Dolan and or Armstrong Advisory
may contact you offering legal or investment services. Cushing and
Dolan and Armstrong Advisory do not endorse each other and
are not affiliated.

Speaker 4 (11:35):
In retirement healthcare coverage is likely to be one of
your largest concerns. This is Mike Armstrong from the Armstrong
Advisory Group. Medicare provides coverage to sixty five million Americans
age sixty five or older, and if you're closing in
on that age, understanding how Medicare works is not only
important for you individually, but for your family as well.
Medicare is made up of four parts, ABC and D

(11:55):
in each of these parts provide specific coverage. Our new
guide is called Understanding metad Care Essential Questions Answered, and
in it we'll explain your eligibility, how to enroll, and.

Speaker 3 (12:04):
Of course the costs.

Speaker 4 (12:05):
Call us today at eight hundred three nine three four
zero zero one and request your free guide. There are
many different elements of Medicare and this guide will help
educate you on all of them. Call eight hundred three
nine three four zero zero one to request the guide
online from our website Armstrong Advisory dot Com.

Speaker 1 (12:21):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. The calendar is turned and the cold is
here to stay, so now is the perfect time to
plan that getaway to the US Virgin Islands. Back now

(12:43):
and take advantage of a special promotion to Saint Croix.
They experience a vibe like no other and receive a
two hundred and fifty dollars per person airfare credit and
a free hotel night when you book a five night
minimum stay with any participating hotel before June thirtieth, twenty
twenty five. Saint Croix is known for its doable history
and spectacular architecture, along with world class cuisine, incredible golf courses,

(13:05):
and a wide variety of water sports. From the moment
you arrive, you'll fall naturally in rhythm with the heartbeat
of the islands. There's no money to exchange, and travel
from New England could not be easier. America's Caribbean paradise
is waiting for you the experience a vibe like no
other on the island of Saint Croix. Go to visit
USVII dot com and use the code Vibe twenty twenty

(13:26):
five for more information and book your trip today. That's
visit USVII dot Com and code Vibe twenty twenty five.
The Legal Exchange with Todd Lusky, an expert in elder
life planning and taxation. Need help with your estate plan?
Call Todd right now and make an appointment. Eight sixty
six eight four eight five six ninety nine. That's eight
sixty six eight four eight five six ninety nine.

Speaker 2 (13:50):
Welcome back into the Legal Exchange with Todd Lutsky. I'm
Susan Power as a financial advisor with the Armstrong Advisory Group,
and I'm joined by Todd Lutsky, a partner with the
law firm of Cushing and Dolan with the Masters in Taxation.
Where we headed next, Todd.

Speaker 3 (14:05):
We're going nowhere, We're staying right here. Well, I guess
we're kind of going to New Hampshire. Okay a little
because it's a real story, folks. So way more than
five years ago, a family came in and lived in
New Hampshire and they wanted to do some planning and
they wanted to protect their assets from the nursing home.
So they came in and we put the house in
and we put some money in the trust. And just

(14:27):
to give you a little background about these trusts, right,
they continue to live there, and we're really unaffected and
not burdened at all by having this air vocal trust.
Life didn't change, really didn't change for them at all.
Years and years have gone by to hear from them
all of a sudden, you know. And again I mentioned
this only because a lot of people believe that these

(14:48):
irrevocable trusts still impact their lives and that you can't
do them and they're hard and this and that. So
life goes on, and now the kids come back in
and they say, well, unbeknownst to you, guys, mom got
sick and went into the nursing home. And so we
went ahead and applied for medicaid. Oh you did. You
didn't call us? No, how's that going for you?

Speaker 2 (15:09):
That's so great?

Speaker 3 (15:10):
Well, we got denied, and so now we need to
go to a fair hearing. And we're wondering if you
guys can help us with the fair hearing. Well, sure,
we're going to help you with the fair hearing. But
more importantly, you know, what are the lessons? What are
the tips you know that we learned from this and this.

Speaker 2 (15:25):
Up the phone?

Speaker 3 (15:26):
Yeah, So what I think I want to do though,
is first just give you a little more background about
the irrevocable trust that they've had for over eight years. Right,
so just to reiterate that does she live there? She
paid her bills, you know, and then even as time
went on, the house that was was sold, right, they
were unaffected and we wanted to sell the house. They
actually called us. We helped them sell the house. They downsized,

(15:49):
and they put the new house in the trust. They
did use us, as I said, for that. And the
good news is because it was drafted as a grand
tour trust, they kept their capital gains tax exclusions. She
was single at the time, so she got a two
hundred and fifty thousand dollars exclusion and she didn't pay
any more taxes than she would have paid had the

(16:09):
trust not been in effect. So great grant our trust status.
Again showing flexibility, showing interestingly enough, she actually bought another house.
She downsized perfectly. Okay, so money went out and another
house came in and life went on.

Speaker 2 (16:26):
What about she downsized, So that means they had money
left over?

Speaker 3 (16:29):
Yeah, so they had well, they had some money in
the trust, plus they added to it, that's correct, So
they had more money in the trust. In. More importantly,
the five year clock was unaffected. So many people think
if you sell the house and buy another house, that
you put a new house in. Therefore there's a new
five year waiting period, when in reality that isn't what happened.
You just changed the investments that were actually in the house.

(16:51):
And by the way, this happened within five years of
them going to a nursing home. Remember everything was put
in over eight years ago, but the sale occurred, excuse me,
within five years. Okay, so great. They were able to
do that in the new home again, just change the investments,
nothing new one in. So you starting to see the
flexibility just to these trusts.

Speaker 2 (17:12):
When they sold the house, the proceeds are made payable.

Speaker 5 (17:15):
To the trust, correct, not to her. That's why it
didn't restart. That's very important, And I said, they used us.
So obviously whenever you sell, folks, who is making a
really good point here, When you sell, make sure you
call the lawyer who did the plan for you so
that they can guide you through the sale.

Speaker 3 (17:33):
We do it anyway. It doesn't cost anything more. It's
the same as hiring another lawyer, yeah, to represent you
at the sale. But very important, everything stayed within the
trust and therefore you don't reset the five year clock.
And that grant our trust status was so important. We
filed a tax return. All the income gets reported on
their personal return. As you said, the excess money that's

(17:54):
in there generating more interest, more dividends for them. They
continued to live on that income, they continue to pay
taxes at that rate. So, folks, that's a little bit
about these trusts and how they work. Now, that's actually
an irrevocable trust situation, to back to the basics. Guide
happens to be a family that comes in real life situation,

(18:16):
list of assets, and then I make a recommendation in
this it's like a big engagement letter, is really what
this is. I make a recommendation to them as to
how to do the planning. In that plan, it discusses
the irrevocable trust and how it works. You can put
your facts into this situation and see if this plan
actually works for you. In addition to that, it also

(18:37):
explains all the basic documents that you get, from the
wills to the healthcare proxies to the powers of attorney.
So important that if you've never done planning and you
want to get started. This is a real life example
for you and see if it fits into your fact pattern.
Back to the basics. Eight six y six eight four

(18:57):
eight five six nine nine or Legal Exchange show dot
com again eight six six eight four eight five six
nine nine or Legal Exchange Show dot com. Now, that
was just a little understanding to help you understand all
the stuff that they did. Well, they had this irrevocable
trust before the nursing home came. Now the nursing home

(19:20):
came back to the idea of this hearing. What happened again,
you said it, Susan, please don't apply for medicaid on
your own. It just doesn't work as well because lawyers,
when you apply for medicaid, it's not just sending in
the application, which is the easy part. It's dealing with
the caseworker so that the information gets presented to the

(19:44):
to the legal department correctly. Yes, I don't know how
else to say that, right. So in this case, when
they came back in, we said, Okay, here's what we're
going to do. Get us on the phone with the caseworker.
Let's get to the legal department. Since they've already filed
for the fair hearing. We had to respond, I said,
before the hearing data set, why don't we send over

(20:06):
these three separate fair hearing decisions I had in New Hampshire,
three separate cases, all of which we won, and showed
that this trust, this exact trust, works in New Hampshire,
and hopefully they'll read this and then you figure it

(20:30):
out and folks in. About four weeks later, after some
back and forth, out comes an email from the Legal
department saying, we accept the trust as filed. You're only
denied medicaid now because you're over assets by nine thousand

(20:51):
dollars home run by a prepaid funeral contract and you're
all set right, and so now we're out. And she
was also on her own having to go to a
hearing so that she didn't get booted out of the
nursing home. There were two separate things going on wo
so not only did they get to save all the
money that was in the trust and the new house
that was in the trust, they also saved all the

(21:14):
legal fees of the fair hearing.

Speaker 2 (21:16):
They didn't want to deal with you. I'm out there.

Speaker 3 (21:20):
It could be they could have looked at those cases
and said it's him again, But but you know, and
I don't care what the reason was. We're just saying, look,
here's what you've done in the past three times, why
do we have to do it again. I was surprised
I had to do it three times. It's the same
thing over and over. I don't know how you're going

(21:40):
to be able to come back and say that all
three of these somehow are is now wrong when you've
already explained to us. And I'm glad that you know that,
not that they just that they won, but that they're
following the rules, right, And I think that's important for
everybody to trust. Trust you. That's exactly right. Trust the trust,

(22:00):
follow the rules, folks. It was basically the same old argument, right,
the limited power of appointment that we have in our trust.
It says you can appoint assets to children. Well, they
think you can take assets to children and then the
children will give it back to mom and dad, and
therefore the trust is accountable because there's a path back
to mom and dad. That's not how it works. We

(22:21):
have appellate court cases and Supreme Court cases in mass
that say that's not how.

Speaker 2 (22:27):
It's worked because they don't have to.

Speaker 3 (22:29):
No, they don't have to and that language is not again,
you cannot appoint it to the donor period. It'd be
no different than if you took the money and just
gave it to the kid with no trust, and five
years later you got sick and went in the nursing home.
The judge says, you can't go after the kids now
and say give that money back. So then it's really

(22:50):
the logical answer is it's no different than with a trust.
You put it in a trust, and five years later,
whether you give it to the kids or not, out
of the trust, you can't go after the kids and
get it back. So, folks, these trusts work. They're really
not that scary, which I hope was also what I
wanted to convey to this point, and that if you

(23:11):
need to protect your assets from the nursing home, figure
out how they work and use them. The guide back
to the basics this month does that. It's a real
life fact pattern. You put your asset list next to
that asset list, your family dynamics next to that family dynamics.
See if it works for you. It's like an engagement
letter eight six six eight four eight five six nine

(23:32):
to nine or legal exchange show dot com.

Speaker 2 (23:35):
You've been listening to Todd Lutsky, a partner with the
law firm of Cushing and Dolan. I'm Susan Power as
a financial advisor with the Armstrong Advisory Group, and Todd
will be answering your listener questions when we return to
the legal exchange with Todd Lutsky.

Speaker 1 (23:50):
If you're a nearing retirement agent are concerned about how
to protect your assets, you need to call Cushing and
Dolan the experts and know their law. Their new guide
is called Back to the Basics, and it will help
you create a plan that will help you understand issues
like avoiding probate, passing your assets along to your family,
and potentially eliminating your estate taxes. This free guide has
all the information you need to build a safe and

(24:11):
secure estate plan that will give you peace of mind
as you close in on retirement. Call eight six six
eight four eight five six ninety nine right now and
request your free guide today. You can also request a
no obligation consultation to review any current planning you've done.
Cushing and Dolan have been helping families like yours for
thirty years. Let them help you too. Get their new guide,
called Back to the basics today call eight sixty six

(24:33):
eight four eight five six ninety nine or request the
guide online by visiting Legal Exchange show dot com. The
proceeding was paid for in the music expressed are sole
leados of Cushing and Dolan. Cushing and Dolan and or
Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.

Speaker 6 (24:51):
This is Michael Valila, adjudent of the Disabled American Veterans
Department of Massachusetts. The DAVIA Massachusetts has helped me and
countless others adjust to civilian life through a variety of
incredible programs. Through our Local Veterans Assistance Program, we provide
necessary services to veterans and their communities such as food, shopping, landscaping,

(25:11):
and companionship. But we need your support. You can help
by making a donation today. Please visit DAVFIVEK dot Boston.
That's DAVFIVEK dot Boston.

Speaker 1 (25:21):
The calendar is turned and the cold is here to stay,
So now is the perfect time to plan that getaway
to the US Virgin Islands. Back now and take advantage
of a special promotion to Saint Croix. They experience a
vibe like no other and receive a two hundred and
fifty dollars per person airfare credit and a free hotel
night when you book a five night minimum stay with
any participating hotel before June thirtieth, twenty twenty five. Saint

(25:44):
Croix is known for its incredible history and spectacular architecture,
along with world class cuisine, incredible golf courses, and a
wide variety of water sports. From the moment you arrive,
you'll fall naturally in rhythm with the heartbeat of the islands.
There's no money to exchange. Travel from New England could
not be easier. America's Caribbean paradise is waiting for you

(26:05):
the experience of vibe like no other on the island
of Saint Croix. Go to visit USVII dot com and
use the code Vibe twenty twenty five for more information
and book your trip today. That's visit USVII dot com
and code Vibe twenty twenty five.

Speaker 4 (26:22):
Medicare provides health coverage from millions of Americans, but it's
a challenging program. Being aware of its many complexities is
crucial to your healthcare plans.

Speaker 3 (26:29):
For later Life.

Speaker 4 (26:30):
Hi, this is Mike Armstrong from the Armstrong Advisory Group
and our new guide is called Understanding Medicare. Essential Questions
answered in It will help you learn about the basics,
including enrollment periods, costs, and coverage options, as well as
more complicated issues like filing claims and appeals and planning
for long term care. Call us today at eight hundred
three nine three four zero zero one to request your
free guide today. There are many resources available to help

(26:53):
you understand your options and rights under Medicare. Ask for
our free guide and learn more so that you can
make the most informed decision for your healthcare. And you
can get it by calling eight hundred three nine three
four zero zero one. Again that numbers eight hundred three
nine three four zero zero one.

Speaker 1 (27:08):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong Guide a specific financial, legal, or tax advice. Consult
your own financial, tax, and estate planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. You're listening to the Legal Exchange and it's
time for ask Todd. The segment where Todd will answer

(27:28):
your questions about anything and everything that's included in the
estate planning process. Once again, here's Todd Lutsky and Susan Powers.

Speaker 2 (27:37):
Well, welcome back, Tob. We've a few questions from listeners.
First question comes from Bill in Wareham, Mass and Bill Wrights.
I own three rental properties, including a two family home
where I live in one half and rent the other.
I created an irrevocable trust a few years ago and
I would now like to set up an LLC to
protect from creditors in the rentals. Is it too late

(27:59):
for me to do now that they are in my
irrevocable trust? If not, how do things change for me
if they are in an LLC?

Speaker 3 (28:08):
Good news. We had just talked about a real life
story on how flexible the irrevocable trusts are. This is
just another way to provide flexibility in the irrevocable trust arena.
So in English, it's not too late. So we're going
to be able to do this. How do we do it?

(28:28):
And I think that's important that we figure this out.
So you have the trust that owns the rental yep,
so the trustee of the trust will invest. See we
use the right word. The trustee of the trust will
invest into the LLC. They will contribute what capital they
will put the rental into the LLC. In exchange for

(28:51):
putting the rental into the LLC, the trust will take
back one hundred percent of the stock in the l
So now it is the single member of the LLC,
so in essence, it owns the shares of a company
that owns the rental property. So the value was still

(29:13):
in the trust.

Speaker 2 (29:14):
So that doesn't change, like we start the look back
anything like that.

Speaker 3 (29:18):
Absolutely not almost no different than selling a house. If
I took a house and sold it for a million
dollars and put a million dollars back in the trust,
nothing new happened. I just got rid of a house
and have a million. Now I got rid of a
house and took back a share, So now I own
stock in a company that represents the value of the house.
So it's still in my trust. Now, no new five

(29:40):
year waiting period, and life goes on as it was.
Why did we do it? As he said, Now if
somebody sues, they sued just the LLC. They don't come
after the shareholder or anything. So it's a nice level
of credit or protection. But I think the last part
of the question was you know, how does it affect

(30:01):
me going forward? So going forward from a tax return standpoint,
which is critical, right, this thing, being a single member
LLC is disregarded, yes, disregarded as an entity for income
tax filing purposes.

Speaker 2 (30:22):
Only does that mean they don't have to pay taxes
on the income?

Speaker 3 (30:25):
Isn't that exciting us? Very nice that you would think
that loophole, call you loophole, lily, Yeah, exactly. So, while
it's disregarded for income tax purposes, what that means is
that it doesn't have to file a Form ten sixty five,
which is a partnership return, which is usually what an
LLC has to file if it's a multi member LLC.

(30:49):
So if we put this, if you and I put
the property into the LLC susan and you took back
fifty shares and I took back fifty shares, now it's
a multi member LLS and it would have to file.

Speaker 2 (31:02):
So if you had two very vocable trusts.

Speaker 3 (31:05):
Correct, Oh, same thing as if this was if it
was a big enough estate and we had two, they
would be a multi member, right, and so then it
would have to file. Now, either way, whether it files
or it doesn't, it doesn't pay tax. It's a flow
through entity. So in this case, even if it did file,

(31:25):
it would flow the rent and the expenses to the trust,
which is the shareholder. So it's not paid on the
LLC level, right, God, it flows down to the trust
which is the shareholder. Of course that income needs to
be picked up by the trust. Then good news there is.
We talked earlier that our trust is a grand or
trust for income tax purposes, so it also is a

(31:48):
flow through entity and will flow that through. Whether it
comes out or not, it will flow that those numbers
through to the donors ten forty in this case, Bill, Yeah,
Bill will pick up the income on his ten forty.
So the whole thing is income tax neutral, Bill, No

(32:09):
disruption for you.

Speaker 2 (32:10):
Nice.

Speaker 3 (32:11):
Yeah, So it works out. Flexible works out really well.
It's really flexible, and folks, for you to learn how
flexible these trusts are, get the back to the Basics guide.
It explains all the basic documents, from wills to powers
of attorney to hippiforms, which is important because there are
always cursory given just a cursory a discussion not here.

(32:33):
It also lays out a complete family fact pattern for you,
and it's like me giving a legal recommendation to this family.
Here's what I think the estate plan will do for you.
It can work for you. It's like me giving you
a potential legal recommendation.

Speaker 1 (32:47):
Uh.

Speaker 3 (32:48):
It puts your fact pattern into this guide and see
if this recommendation works for you. It also explains the
irrevocable trust because that's what this family wanted. So get
If you've never gotten your estate plan off the ground,
this is the way to do it. Get the guide
back to the basics eight six six eight four eight

(33:10):
five six nine nine or Legal Exchange Show dot com
again eight sixty six eight four eight five six nine
nine or Legal Exchange Show dot com.

Speaker 2 (33:21):
Our last question comes from Anna and Rent the Mass
and Anna writes, I am single and I have around
three hundred thousand in cash in real estate valued around
four fifty I'm not close to my family and I'd
like to leave my estate to charity. How does that work?
If charity will receive everything? Should I have a trust?
And can my attorney be the trustee and executor?

Speaker 3 (33:44):
So this is interesting. So this is great a great
question in the sense that you know a lot of
people think that, you know, because I'm worth you know,
a million or less than a million, that I don't
need an estate plan, and that's not always true, and
I think that's the case here. So as a single person,
I'm guessing no kids, you know, I'm under a million,

(34:05):
so we're not really overly worried about taxes. And by
the way, if even if I was over two million
in Massachusetts, but I was leaving assets to charity, I
again wouldn't be worried about estate tax is because remember
charitable deduction is dollar for dollar against the estate tax.

Speaker 1 (34:22):
OK.

Speaker 3 (34:23):
So as long as you're leaving assets to charity, the
tax side of the planning doesn't come into play. However,
when you leave stuff to charity, you have many ways
that you can do it. So in this case, you'
is there a house involved.

Speaker 2 (34:38):
A house worth four fifty in cash of three hundred.

Speaker 3 (34:40):
So probably you'd want to set up a trust just
to facilitate this, right, That's what I would think that
I would want the trustee of the trust to sell
the property and have direction in there that says we're
going to sell the property, and then all the assets
are now money and they're in the trust. Then you
anna in this case have to think about how you

(35:01):
want to leave it to the charity. Do you want
to trust maybe to just make distributions on an annual basis,
for like an education fund. I don't know what charity
it is. Do I want to have a Do I
want to, you know, grant a scholarship once a year
kind of thing? You know? Do you want the money

(35:22):
to just be paid out directly to the charity? Do
you want to have certain instructions in the charity that
says you know how to how to distribute it? Should
it be you want to give a name to the
plaque or something that you're getting, so all that stuff
can be laid out. I think in a trust. Can
you do it in a will? You probably could accept.
I think you're going to have the probate issues, right,

(35:43):
You're going to have to deal with going to probate
and all of that. Now, I will tell you one
other thing that's important, especially if we want to favor
a certain night, you can't. So I went to the
seminar and learned about charities last January, and they are
very much cracking down on these colleges that have grants
or or you know we're going to favor a certain

(36:06):
ethnic group. Perhaps you can't do it based on gender,
based on sex, based on race, based on religion, based
on you know, you can't. You can't say I want
to leave it to the Italian something or other. You
can't do it, So it a way or otherwise they're
gonna they're gonna make you change it, right because they're
saying you can't do it based on any of those things.

(36:29):
So there's ways around it. Like you could say I
want to grant a scholarship to the school located at
Boom and you can pick a location based on zip
code that you know favors that particular right sort of

(36:49):
lower income level or something. Right, you're allowed to design
it so that everybody benefits, not just one, but design
it where you want it to go. So lots to
think about, and you're dealing with charity folks, and lots
of think about in your estate plan. Get the guide
eight sixty six eight four eight five six nine nine.

Speaker 2 (37:08):
If you have a question you would like to ask Todd,
visit his website Legal Exchange show dot com and click
on the ask Tod tab. Maybe I'll be able to
read your question on the air and hopefully his answer
will stop you from becoming one of his next real
life stories. You've been listening to Todd Lutsky, a partner
with the law firm of Cushing and Dolan. I'm Susan Powers,

(37:28):
a financial advisor with the Armstrong Advisory Group. We'll be
back with more after this quick break on the legal
exchange with Todd Lutsky.

Speaker 1 (37:37):
If you're a nearing retirement agent are concerned about how
to protect your assets, you need to call Cushing and
Dolan the experts and elder law. Their new guide is
called Back to the Basics, and it will help you
create a plan that will help you understand issues like
avoiding probate, passing your assets along to your family, and
potentially eliminating your estate taxes. This free guide has all
the information you need to build a safe and secure

(37:58):
estate plans that will give you peace of mind as
you close in on retirement. Call eight six six eight
four eight five six ninety nine right now and request
your free guide today. You can also request a no
obligation consultation to review any current planning you've done. Cushing
and Dolan have been helping families like yours for thirty years.
Let them help you too. Get their new guide, called
Back to the Basics Today Call eight sixty six eight

(38:20):
four eight five six nine nine, or request the guide
online by visiting Legal exchange show dot com. The proceeding
was paid for and the mus expressed are solely those
of Cushing and Dolan. Cushing and Dolan and or Armstrong
Advisory may contact you offering legal or investment services. Cushing
and Dolan and Armstrong Advisory do not endorse each other
and are not affiliated.

Speaker 4 (38:38):
In retirement, healthcare coverage is likely to be one of
your largest concerns. This is Mike Armstrong from the Armstrong
Advisory Group. Medicare provides coverage to sixty five million Americans
age sixty five or older, and if you're closing in
on that age, understanding how Medicare works is not only
important for you individually, but for your family as well.
Medicare is made up of four parts, ABC and D.

(38:58):
In each of these parts from god specific coverage. Our
new guide is called Understanding Medicare Essential Questions Answered, and
in it we'll explain your eligibility, how to enroll, and.

Speaker 3 (39:07):
Of course the costs.

Speaker 4 (39:08):
Call us today at eight hundred three nine three four
zero zero one and request your free guide. There are
many different elements of medicare, and this guide will help
educate you on all of them. Call eight hundred three
nine three four zero zero one to request the guide
online from our website Armstrong Advisory dot com.

Speaker 1 (39:24):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide is specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. The calendar is turned and the cold is
here to stay, So now is the perfect time to
plan that getaway to the US Virgin Islands. Back now

(39:46):
and take advantage of a special promotion to Saint Croix.
They experience a vibe like no other and receive a
two hundred and fifty dollars per person airfare credit and
a free hotel night when you book a five night
minimum stay with any participating hotel before ju I'm thirtieth
twenty twenty five. Saint Croix is known for its incredible
history and spectacular architecture, along with world class cuisine, incredible

(40:08):
golf courses and a wide variety of water sports. From
the moment you arrive, you'll fall naturally in rhythm with
the heartbeat of the islands. There's no money to exchange,
and travel from New England could not be easier. America's
Caribbean paradise is waiting for you the experience a vibe
like no other on the island of Saint Croix. Go
to visit USVII dot com and use the code Vibe

(40:29):
twenty twenty five for more information and book your trip today.
That's visit USVII dot com and code Vibe twenty twenty five.
Legal Exchange with Todd Lutsky. If you are a loved
one needs a nursing homestay, call Todd right now at
eight sixty six eight four eight five six ninet nine
and let him make sure your assets are protected. That's

(40:49):
eight sixty six eight four eight five six nine nine,
or visit him online at Legal Exchange Show dot com.

Speaker 2 (40:58):
Welcome back into the Legal Change with Todd Lutsky. I'm
Susan Powers, a financial advisor with the Armstrong Advisory Group,
and I'm joined, of course by Todd Lutsky, a partner
with the law firm of Cushing and Dolan with the
Masters in Taxation. So Todd, when you talk about your
back to basics guide, it's really about the fundamentals of

(41:20):
how to create your estate plan. So beginning to try
and figure out what the right type of a state
plan is for you, where do you even start?

Speaker 3 (41:31):
It's a fair question. So I think the first thing
you really need to do is just just value your assets.
So whatever you own, you have to decide, you know,
kind of how you own it. And if you do
own it, you have to remember it's going to be

(41:51):
part of your gross estate. We're not saying whether it's
part of your probata state. Yeah, it could be zero
in probata state, but when you own it, it's part
of your gross estate. And so you need to add
up all the value of your assets to see where
you hit these exemptions. And we have them across all
the states right in New England anyway, and again not

(42:12):
every state has an estate tax. But you need to
consider both the state and the federal exemption and that's
what's going to kind of dictate what kind of plan
you do.

Speaker 2 (42:22):
So your total net worth essentially exactly.

Speaker 3 (42:25):
So let's assume that one of the you calculated and
you say, I'm worth just north of three million. Okay, Well, federally,
you're probably thinking that's not a big problem.

Speaker 2 (42:38):
No, because it's what thirteen thirteen nine almost fourteen and
likely you know that what that you heard there was
an election, so a little something about that.

Speaker 3 (42:49):
Likely now because of the result, that that exemption probably
will stay high. Okay, we don't know, but because there's
only two vote difference in the House, you know, you
upset a few Republicans and maybe they don't get what
they want, but likely it's going to stay high.

Speaker 2 (43:07):
Okay.

Speaker 3 (43:07):
So I'm not as worried about, you know, federal, but
I got to say where.

Speaker 2 (43:11):
Do I live, right, what state?

Speaker 3 (43:13):
If I live in Massachusetts, I say, well, I only
have a two million dollar exemption, but I'm worth three.
And if I'm married, how can I double that exemption?

Speaker 2 (43:21):
So you'd get four?

Speaker 3 (43:22):
Get four, And that's where the planning would come in
and say, okay, so I want to take care of that.
And then of course the size of the estate it
was much larger than you have to consider the federal
estate tax side as well, and also that size of
the estate will also go towards whether you decide to
do either nursing home planning or not or nursing home planning. Again,

(43:45):
if you're really wealthy and yourself insured, you probably don't
need it. So those are some things to think about.

Speaker 2 (43:50):
Okay, So that determines the type of trust and yeah.

Speaker 3 (43:53):
And maybe how many of yes, okay, exactly.

Speaker 2 (43:56):
So when you say valuing your estate, what assets are
ined in that?

Speaker 1 (44:01):
Like?

Speaker 2 (44:01):
What type of assets?

Speaker 3 (44:03):
So when I say everything, I mean everything, but things
that you don't think about. Right, Let's first talk talk
about what normally would come to mind, right, Oh, my
bank account, all my investment account, Yeah, I get it.
Those are quick items that would come to mind. What
you sometimes don't think about because you don't see the

(44:24):
money is your house. Oh yeah, you mean my house
has to Yeah, you own a house or a vacation
home or a rental property. Right. Oftentimes those are like, yeah,
I don't feel like I have a million dollars, right
because my house is worth a million, you know, and
I get it, but the government values it.

Speaker 2 (44:43):
Yeah.

Speaker 3 (44:44):
Another item you don't think about all the time that
would need to be included, iras, What about roth irs.

Speaker 2 (44:51):
What about roth iras because those are tax free?

Speaker 3 (44:53):
Right, everybody thinks, oh my gosh, it's a roth ira,
so it's tax free. So it's income tax free, folks,
not estate tax free. So it's still included as an
asset in the estate. So the iras, the roth irays
need to be picked up. And I would say, lastly,
the other thing that no one really thinks about life insurance.

Speaker 2 (45:14):
Life insurance is tax free.

Speaker 3 (45:16):
It sure is. It's income tax free, boy. But when
you die, it's valuable. And so it's the value of
the insurance on the date of death that matters. So
if I have a term policy with zero dollars cash
surrender the day before I die, then I die, it's
worth a million dollars. If that's the face value, yep,

(45:36):
I am now worth a million dollars.

Speaker 2 (45:38):
And you're going to be taxed on that million dollar
life insurance policy, correct, which could cause your estate to
be taxable.

Speaker 3 (45:44):
Right. You don't even think about it. Right, You could say, oh, well,
I'm not worth a million dollars, but I have a
million dollar life insurance policy, so now you're worth a
million dollars. And we haven't talked about any other assets of.

Speaker 2 (45:54):
Your estate all gets piled on the table.

Speaker 3 (45:56):
It really does. It really does. So stuff like that's
peaks up on you, folks, and so when you want
to do get your this is why you want to
get your planning done. Get the guide this month. It
really does explain these things. It's called back to the basics.
It's basically a recommendation to a made up family with
a series of facts and assets. I basically put together

(46:20):
an engagement letter describing to them exactly what they should do.
This might be the plan that fits your family dynamics
and your asset base. If not, put your facts in
and see whether it does fit. It explains not only
the irrevocable trust, because that's what's recommended. It also talks
about all the basic documents, from wills to powers of

(46:41):
attorney to hip aforms. Get the Guide, folks, and get
your estate planning off the dime. It's the beginning of
a new year. Eight six six eight four eight five
six nine nine or Legal Exchange Show dot com again
Back to the basics eight six six eight four eight
fives six nine nine or Legal Exchange Show dot com.

Speaker 2 (47:04):
So Todd I think about how throughout the course of life,
your goals and objectives change. You know, you first get married,
then you have kids, and then your age. How does
your age impact the type of planning you would do.

Speaker 3 (47:20):
So again, very important. Let's go from younger to older.
So a lot of times we talked a little bit
about value. Again, just because you have a little bit
of assets doesn't mean that you don't plan, right, So
that's that's where you begin. So, yes, value is important.
Even though you have small amount. Now, you still might

(47:41):
want to plan for other reasons. Why what if you're
thirty five, married, couple, got your first house yep, have
a couple of young kids, miners, but still not overly
valuable at that age, right, you have might have some
debt and whatnot, Right, but you know, I've got your
four to oh one k going, You've got some savings

(48:03):
tucked away.

Speaker 2 (48:05):
You get some employer life insurance, maybe the term point.

Speaker 3 (48:10):
Yeah, you might have the group term so and that
could throw you up a little bit. But even then,
it's not so much about the size of that estate
as it is. I got young kids, right, so I
get it. I want to avoid probate and not pay
taxes accidentally, and that's important. But if I die and
I have minor children, they can't own anything. So if

(48:33):
they can't own anything, I don't want the guardian that
I listed in my will, which, by the way, would
be another reason for you to do your planning. When
you have young children, you really need the will. The
one important thing the will does do is a point
of guardian, So please do that. But if you're going
to do your planning, you know, the whole plan would

(48:53):
be the trust because I don't want the guardian owning
my stuff. So instead I'll have the trust own my stuff,
and I'll have a trustee doing exactly what the trust
says can be done. Well, that stuff you've appointed right,
be your backup trust date. Take care of the kids,
take care of you know, hold the assets, do the investments,

(49:16):
you know, make the distributions the way I want them
to go for health, for education. So to me, what's
going on after the fact can be more important than
just the probate and the taxes. So young people, yeah,
step up. What about as we age right now, we're
gaining assets. Our value of our estate is growing right

(49:36):
where we now have maybe more of that concern about
taxes and probate, but we still have kids, and we
might have grandkids now. So sixty and over is the
next sort of breakpoint that I would talk about. When
you're sixty and over, I'm going to ask the question
about nursing home planning. I'm going to say, if you're
coming in and you're doing an estate plan, is one

(49:58):
of the objectives, over and above the bloodline planning, the
probate work, the tax work, is one of the objectives
protecting assets from the nursing home. I'm going to ask
if it is at sixty and over, we're going to
discuss how the irrevocable trust might work. Okay, So to
me that age is a big difference. And again if

(50:21):
you're older, if you're sixteen over, but you're not doing
nursing home planning, then it's really all about the revocable trust.
So folks, learn what plan is right for you, get
back to the basics, get started on your estate planning.
Eight sixty six eight four eight five six ninety nine
or Legal Exchange show dot com.

Speaker 2 (50:40):
Todd Lutsky from the law firm of Cushing in Dolan,
thank you so much.

Speaker 3 (50:43):
Thank you, Susan. Always a pleasure.

Speaker 2 (50:45):
I'm Susan Power as a financial advisor with the Armstrong
Advisory Group. We thank you for joining us today and
we'll be back again next week on the Legal Exchange
with Todd LUTs Key.

Speaker 1 (50:56):
If you're a nearing retirement age and they're concerned about
how to protect your assets, you need to call Cushing
and Dolan, the experts in elder law. Their new guide
is called Back to the Basics, and it will help
you create a plan that will help you understand issues
like avoiding probate, passing your assets along to your family,
and potentially eliminating your estate taxes. This free guide has
all the information you need to build a safe and

(51:17):
secure estate plan that will give you peace of mind
as you close in on retirement. Call eight sixty six
eight four eight five six ninety nine right now and
request your free guide today. You can also request a
no obligation consultation to review any current planning you've done.
Cushing and Dolin have been helping families like yours for
thirty years. Let them help you too. Get their new guide,
called Back to the Basics today Call eight sixty six

(51:39):
eight four eight five six ninety nine or request the
guide online by visiting Legal Exchange show dot com, the
proceeding was paid for and the music expressed are sole
leados of Cushing and Dolan. Cushing and Dolan and or
Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.

Speaker 4 (51:56):
Medicare provides health coverage from millions of Americans, but it's
a challenging program. Being aware of its many complexities is
crucial to your healthcare plans for later life. Hi, this
is Mike Armstrong from the Armstrong Advisory Group and our
new guide is called Understanding Medicare. Essential Questions Answered in
It will help you learn about the basics, including enrollment periods, costs,
and coverage options, as well as more complicated issues like

(52:17):
filing claims and appeals and planning for long term care.
Call us today at eight hundred three nine three four
zero zero one and request your free guide today. There
are many resources available to help you understand your options
and rights under Medicare. Ask for our free guide and
learn more so that you can make the most informed
decisions for your healthcare. And you can get it by
calling eight hundred three nine three four zero zero one

(52:39):
again that numbers eight hundred three nine three four zero
zero one.

Speaker 1 (52:43):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong Guide a specific financial, legal, or tax advice. Consult
your own financial tax and to state planning advisors before
making any investment decisions. Armstrong may contact you to offer
investment advisory services. The calendar is turned and the cold
is here to stay, So now is the perfect time
to plan that getaway to the US Virgin Islands. Act

(53:04):
now and take advantage of a special promotion to Saint Croix.
The experience a vibe like no other, and receive a
two hundred and fifty dollars per person airfare credit and
a free hotel night when you book a five night
minimum stay with any participating hotel before June thirtieth, twenty
twenty five. Saint Croix is known for its incredible history
and spectacular architecture, along with world class cuisine, incredible golf courses,

(53:27):
and a wide variety of water sports. From the moment
you arrive, you'll fall naturally in rhythm with the heartbeat
of the islands. There's no money to exchange and travel
from New England could not be easier. America's Caribbean paradise
is waiting for you the experience a vibe like no
other on the island of Saint Croix. Go to visit
USVII dot com and use the code vibe twenty twenty

(53:48):
five for more information and book your trip today. That's
visit USVII dot com and code vibe twenty twenty five.