The Legal Exchange: Sunday Edition - Sunday, October 27, 2024

Episode Transcript

Speaker 1 (00:00):
This is the Legal Exchange with Tod 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 sixty six eight four
eight five six ninety nine. Operators are standing by. Now
Here are your hosts, Tod Lutsky and Susan Powers.

Speaker 2 (00:37):
Welcome into the Legal Exchange with Todd Lutsky. I'm Susan Powers,
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 a master's in taxation. Welcome Todd.
How are you today?

Speaker 3 (00:53):
I'm never better in you?

Speaker 2 (00:54):
I am great? Thank you. What do you have for
us this week?

Speaker 3 (00:57):
A couple? Thanks one. We have a Tennessee Appellate Court
case basically how will contests work and how to avoid
them and understanding all that nonsense. And folks, there's so
much that goes into these will contests, and you know,
is it undue influence? Is it? Is it a lack
of capacity? Folks. We're going to just explain that to

(01:19):
you and then give you some lots of tips on
what happens, and a couple of real life stories built
in there as well to sort of bring that point
home and of course do your planning right. And then lastly,
you know, this guide this month is and I get it, folks,
it's a little complicated, it's heavy lifting. It's good stuff,
though it's new. And so I've got a real life
story that's really going to help us understand a fact

(01:41):
pattern about this client who wants to do both medicaid
and estate tax planning at the same time. But they
each have a seven hundred and fifty thousand dollars IRA
among other assets, making a total estate of three million dollars,
and so obviously they have all kinds of issues from
the state taxes, to income tax issues with iras to

(02:01):
nursing home issues. And we're going to walk you through
how Now it brings me to the guide how naming
your estate the IR beneficiary might be the right way
to go. That's really what the guide is all about, folks.
And so it is the end of the month. It's
the last chance to get it, so call and get it.
Learn how you can do both estate tax planning and

(02:23):
nursing home planning at the same time. But more importantly,
take and protect an IRA somewhat in advance. And remember
that's the new thing. You could never really protect an
asset in advance, an IRA in advance because of the
income tax hit on the transfer. This kind of takes
care of all of those things. So most people have

(02:44):
an IRA. Learn how it fits in your estate plan.
Get the guide eight six six eight four eight five
six nine to nine or Legal Exchange Show dot com. Again,
it's the end of the month, folks, so call and
get it eight six six eight four eight five six
nine to nine or Legal Exchange Show dot com.

Speaker 2 (03:04):
You can't believe it's the end of another month. I know,
I just said that, like yesterday.

Speaker 3 (03:08):
No I know, No, I saw Christmas lights up, saw
him well in the stores. It's disgusting. It's too early,
right next to the pumpkins. Doesn't make sense respect the bird.
I know, I know. Well, let's get into this story
not story fact pattern in Tennessee. Let's head over to Tennessee.
So what happens here? So Joe has a will admitted

(03:30):
to probate on March third, twenty twenty one. Dates are
important here. Two years later, on March third, twenty twenty three,
David's son files a complaint to contest the validity of
the will, claiming that Joe was unduly influenced by his
daughter Jennifer, who, interestingly enough, is the pr on the will.

(03:54):
So and we'll have to see how that plays out well.
On Octomber twenty twenty three, Jennifer, somebody we've got march
in March. So in October of twenty twenty three, Mark
Jennifer files a motion to dismiss because Joe only had
two years to file the complaint. There's a statute of limitations, right,

(04:17):
you die, you have two years to file a complaint
in that state. It's different in other states. So I
believe in mass it's only one year to file a complaint.
And so he filed the complaint on March third, twenty
twenty three. Remember, the probate was filed on March third,
twenty twenty one, no same day. Two years later. Same day,

(04:40):
he filed the complaint at eleven forty five in the morning.
Turns out the probate was filed at ten o'clock in
the morning. So the probate court said, we agree, you
missed your filing deadline. Too bad for you. Motion to
dismiss granted. He didn't like that. They reversed and they said,

(05:05):
you know what, the exact hour and minute doesn't necessarily
be determinative when dealing with the Statute of limitations. Remand
the case and have it.

Speaker 2 (05:17):
It does seem a little obnoxious.

Speaker 3 (05:19):
It does. I'm on the fence on this one with you, though, Susan.
I gotta tell you, but I.

Speaker 2 (05:23):
Would think it would be the day before, because if
you count up your days, that's two whole years. That
next day would be the start of the third year.

Speaker 3 (05:30):
I mean, I'm on the fence on this one because
to me, a deadline's a deadline, right, It's not a deadline.
Well maybe no, it's a deadline. And if you're going
to have a deadline, you should have a deadline. I
can assure you. If you're a daily to the irs,
and there's interest and penalties. Do they're going to charge

(05:53):
you so only.

Speaker 2 (05:56):
To the last possible minute?

Speaker 3 (05:57):
Though, I get it. No, that's a good quest and
of itself, I totally agree with you there why you
had two years to do it? But then again that
goes to the whole point of well you missed it,
shame on you. Anyways, folks, that's not really why I'm
explaining this. I want to give us some tips and
lessons and understand, you know, we don't want to be
in this situation now right. We want to do our

(06:20):
advanced planning and get it done and not worry about
things like this. So in this case, they were arguing
that it was undue influence, not capacity, But we're going
to talk about both because those are the two ways
that your estate plan is generally attacked. So here what
is undue influence? Well, when you're preparing your estate plan,

(06:42):
if you notice your one child is talking to you
about it a lot, they're you know, sort of requesting
that you get the state plan done, maybe making some
references about who should get what, you know, and the
next thing you know, they pick out the lawyer for you,
and you know, then they actually drive you over to
the lawyer's office, and you know, at the end of

(07:04):
the day, you get a new estate planning document. I
don't care if it's a will or a trust that
lo and behold somehow benefits you, right, either greatly or
even moderately. That is the epitome of undue influence. Right.
That's bad and that's what they're accusing of. That's what

(07:29):
the brother was accusing the sister Jennifer of doing in
this case. Now, let me give you a real life
story on how these play out. So you know, if
you have a client that comes in and they do
after they've been our client for years, they come back
and they say, you know, we want to exercise the
limited power of appointment to change even an irrevocable trust

(07:50):
that we might have done, a medicaid irvocable trust, and
we give them the power to do that. And so
what happens is, you know, a child calls and starts
asking about this, you know, can you change the trust?
How can it be changed? And then they start saying yeah,
and this is what my parents want. Yeah. So that's
a really bad sign. Right. So from our standpoint, you know,

(08:12):
that's like undo influence. So we start saying, listen, this
is great, that's what you want, but we don't really
care what you want. We need to now get.

Speaker 2 (08:21):
That parent because the kids aren't the client.

Speaker 3 (08:23):
No, no, and we need to get that parent in
the office alone, and then we can ask a series
of questions kind of unbeknownst to the client what we're
trying to do to really determine you know, is this
your wish, Why is it your wish? What's going on?

Speaker 2 (08:42):
You know you still have sound mind to change it,
and so yeah, we ask a series of questions.

Speaker 3 (08:46):
Get that done. So that helps clarify all of that. Now,
what if the client calls on their own, that's okay,
they say I want to change this, And usually when
they exercise their limited power of appointment, they're they're removing
somebody or cutting back somebody's interest. So you know, we'll
say that's fine, we're happy to do it. But when

(09:08):
you're doing it, you exercise your limited power of appointment.
We explain that you change your will to exercise the
power in the trust to change certain paragraphs in the trust,
getting rid of whoever it is you want it to
get rid of. And once we get all that done,
and we explain how it works. Great flexibility right in
these irrevocable trusts usually limited to children, grandchildren, siblings, whatever

(09:32):
you want to limit the class to. But you can
change it if you want to. Even after we get
that done. We always tell them, you know, it's probably
not a bad idea to practice defensive law here. You
know that person's going to come back and sue when
you die. Why not go to your primary care physician.
Just get us a one sentence note saying the doctor,
As far as I know, there is no cognitive inabilities

(09:54):
with you. It just helps, especially from a defensive laws standpoint.

Speaker 2 (09:59):
I have that off dynamic.

Speaker 3 (10:01):
Yeah. Well, if you're cutting someone out, they're going to
you want to be ready for that. So it's going
to happen. So those are just some things to think
about when you're doing your estate plan. And another thing
to think about is iras and how to deal with
them because they're complicated. Get this guide eight six six
eight four eight five six ninety nine or Legal Exchange
show dot com.

Speaker 2 (10:21):
You've been listening to Toddletski, a partner with the law
firm of Cushing and Dolan. I'm Susan Powers of financial
Advice with the Armstrong Advisory Group. We've got much more
to come when we return to the Legal Exchange with
Todd lets Key.

Speaker 1 (10:35):
Spouses generally serve as the beneficiary to your IRA or
life insurance policy, but naming your estate the beneficiary has
quite a few benefits. Cushing and Dolan are experts and
eilder law, and they can help you protect your assets
from probate and the nursing home. By naming your estate
as a beneficiary, you can avoid the probate process, less
than the chance of creating any income tax issues on
your rmds, and enjoy enhanced the state tax reduction. Call

(10:59):
Cushing and Dolan right now at eight six six eight
four eight five six ninet nine and ask for their
brand new guide called why Name your Estate and IRA Beneficiary?
Learn about these benefits and others, and provide peace of
mind for you and your family during your retirement years.
That number again is eight six six eight four eight
five six nine nine, or you can request the guide
online by visiting our website at Legal Exchange Show dot com.

(11:22):
That's the Legal Exchange Show dot com. The proceeding was
paid for and the views 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. Follows in full swing. The leaves are changing,
the days are getting shorter, and the cold is anshin closer.

(11:42):
Don't let the prospect of darkness at four pm get
you down, because your next incredible vacation is just a
click away. The US Virgin Islands are Saint Croix, Saint Thomas,
and Saint John. Enjoy one or all three and experience
rich history, world class cuisine, a wide variety of water sports,
and the most pristine beaches anywhere in the world. Go

(12:02):
to visit USVII dot com and check out the Americancribbean,
where you'll find all the information you need to book
a trip you'll never forget. Upon arrival, you'll fall naturally
in rhythm with the heartbeat of the islands. Travel to
and from New England is simple, and your stay will
be hassle free. Because this is the American Caribbean, there's
no passport required and no money to exchange. Whether it's
a romantic getaway or a family vacation. Make your plans

(12:26):
now to get out of the gold and head to
America's Caribbean paradise. Go to visit USVII dot com and
book your trip of a lifetime today. That's visit USBI
dot com.

Speaker 4 (12:36):
To fully maximize your social Security benefits, it's important to
understand how social security may affect your taxes. Hi, this
is Mike Armstrong from the Armstrong Advisory Group, and when
deciding to collect social Security benefits, it's essential to consider
how those benefits interact with your other income sources, your
tax situation, and your long term financial goals. As an example,
if you have tax free or after tax options in retirement,

(12:59):
you can struct sure your financial plan to manage your
future tax burden. Collecting social security too early without careful
planning could limit your ability to manage taxes later in life.
Our new free guide is called Social Security and Taxes
and it unpacks these issues and more. Get your free
copy today by calling eight hundred three nine three for
zero zero one. That's eight hundred three nine three for

(13:21):
zero zero one.

Speaker 1 (13:22):
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 make contact you to offer investment
advisory services.

Speaker 5 (13:37):
This is Tucker Silva the Financial Exchange Show, and I'm
joined today by a state planning attorney, Todd Lutsky, a
partner with the law firm of Cushing and Dolan with
a master's in taxation. And today we're talking about choosing
beneficiaries for your IRA. Todd, what is the best way
to set up designated beneficiaries for qualified plan assets from

(13:57):
both a medicaid and estate tax plan perspective for a
married couple.

Speaker 3 (14:02):
Generally, for a married couple you have US you have
several choices. The most commonly used one is you're going
to make the surviving spouse the designated beneficiary. It doesn't
shelter assets from a state taxes, It just passes to
the surviving spouse. It avoids probate, and it's probably the
best way to go from an income tax perspective, not
necessarily in a state tax perspective. Another way would be

(14:23):
you could technically name the trust the beneficiary of the
IRA when you pass that at least will help it
shelter assets for estate tax purposes and still provide for
the surviving spouse. But from a medicaid perspective, it will
then protect it from the nursing home, but it'll take
five years. Perhaps the newest and best way to do

(14:44):
this would be to name the estate the beneficiary provided
you are over age seventy three, seventy three or over.
That way, it goes through probate into the will, It
is sheltered for estate taxes, it is immediately protected from
the cost of long term care for the surviving spouse,
and the surviving spouse has access to it as well.

Speaker 5 (15:04):
Educate yourself about the estate planning process. Request your free
copy of Todd's brand new guide Why Name Your State
in IRA Beneficiary right now by calling eight six six
eight four eight five six nine nine. That's eight six
six eight four eight five six nine nine, or you
can request a copy from their website Legal exchange show

(15:26):
dot com.

Speaker 1 (15:26):
The proceeding was paid for and the views 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 Armstrong do not endorse each other and are
not affiliated. This is Asked Todd on the Financial Exchange
Radio Network. If you have an existing estate plan or
in the market for one, Todd Letsky is here to
answer your questions and help you plan for later life.

(15:48):
Ask Todd is presented by Cushing and Dolan, serving Massachusetts
and New England for more than thirty five years, helping
families with the state and tax planning, Medicaid planning, and
probate law. Visit Cushing Dolan. No, here's Todd Lutsky.

Speaker 6 (16:03):
And we're now joined by Todd Lutsky from the law
firm of Cushing and Dole. And the segment is called
Ask Todd because you get to ask Todd your questions
state planning ones only, but if you got anything of
state planning related. We got the phone lines open at
eight eight eight to zero five two two six three.
Last week. Once again we did not get through everyone,

(16:25):
so please get in line early if you want to
make sure that your question gets answered. That phone number
again is eight eight eight to zero five two two
six three. Mister Lutsky, how are you doing today?

Speaker 3 (16:39):
I'm doing just good, just good. How are you doing?
I'm good.

Speaker 6 (16:42):
We got a little bit of bad news yesterday, though
you did personally, not me personally.

Speaker 3 (16:46):
Old McDonald O. Old McDonald on the farm.

Speaker 6 (16:49):
Had to sell his farm. He did, yet he had
to cover whatever he ei AIOS. That's right, the real
real problem for him, Todd. I want to talk to
you a little bit about benefit fishery designations today and specifically,
you know, when we're talking about how beneficiaries are designated
on iras, how does that what are the general recommendations

(17:12):
for how to coordinate that within the state plan in general?

Speaker 3 (17:15):
So, I think iras are your most complicated you know,
asset in your estate plan, so you know houses, rental properties,
your investment portfolio, all of those assets are pretty easy
to deal with. When I say easy to deal with,
I mean if I have a trust, whether it's revocable

(17:38):
or irrevocable, I'm likely going to suggest some or all
of those assets into the trusts. If it's revocable, we're
retitling all of those assets of the trust. I want
to do that. If it's irrevocable, we'll retitle all that
you feel comfortable putting into the trust. Very easy across

(18:01):
the board, enter IRA, IRA is a problem because I
can't just retitle it now, and so if I try
to retitle it to a trust, I'm going to have
a big income tax hit because it has to come
out of the IRA and be taxed.

Speaker 6 (18:20):
Let me stop you on that. Is there any situation
in which you would ever say, hey, it does make
sense to do that, pull that money out of the
IRA and put it into a trust. Is there a
scenario where it might not be the norm, but you
still say, yeah, I would consider doing that.

Speaker 3 (18:37):
I think it would depend entirely on how much the
IRA is worth. I mean, if you got like a
million dollar IRA and you want to put it into
an irrevocable trust. First of all, you would never do
it with a revocable trust. You don't need to the
only time this becomes an issue is when you want
to do nursing home planning. And that's really again kind
of what the guide's dealing with too, is how can

(18:58):
we add nursing home planning protection to an IRA that
needs also estate tax planning and income tax issues. So
with a revocable trust, you'd never do it. But with
an irrevocable trust, could you do it? If they come
in and they say, you know, I really want to
protect this IRA from the nursing home. I just have
to do it. Well, I would say, you know, how

(19:22):
big is it? If it's not going to cause a
huge income tax hit, I might what about a wroth.
Now that's an idea. If I've had a wroth kicking
around for let's say ten years, and I've earned ten
years worth of income tax free growth, and there's five
hundred thousand dollars sitting in there, and I say, you know,
I really want to protect this from the nursing home.

(19:42):
Well there's an interesting thought. Now I can take it
out tax free. Yes, I will lose further income tax
free growth by putting it in the irrevocable trust, But
you know what, I'm cutting my losses. I'm saying, you
know what, if I don't do it, it might not
be there because all those losses will be taken, or
all that money will be taken if I get sick.

(20:03):
If I put it there, at least I'm cutting my losses,
letting it grow inside the trust and protect it from
my family. Hey, that's not a bad idea. So you
just got to look at the tax numbers, I think, Chuck,
has a way to go on that.

Speaker 6 (20:15):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. If you've got a question for Todd, still
a little bit of room on the phone lines at
eight eight eight to zero five two two sixty three.
We're going to take a quick break now, but when
we come back, it's right to your questions with Todd.
That number again is eight eight eight to zero five

(20:35):
two two six three. Quick break than your questions Ask.

Speaker 1 (20:39):
Todd with Todd Lutsky every Wednesday at ten thirty only
here on the Financial Exchange Radio Network.

Speaker 4 (20:47):
To fully maximize your Social Security benefits, it's important to
understand how social security may affect your taxes. Hi, this
is Mike Armstrong from the Armstrong Advisory Group, and when
deciding to collect social Security benefits, it's essential to consider
how those benefits interact with your other income sources, your
tax situation, and your long term financial goals.

Speaker 3 (21:06):
As an example, if you.

Speaker 4 (21:07):
Have tax free or after tax options in retirement, you
can structure your financial plan to manage your future tax burden.

Speaker 3 (21:13):
Collecting social Security too early without.

Speaker 4 (21:15):
Careful planning could limit your ability to manage taxes later
in life. Our new free guide is called Social Security
and Taxes, and it unpacks these issues and more. Get
your free copy today by calling eight hundred three nine
three four zero zero one. That's eight hundred three nine
three four zero zero one.

Speaker 1 (21:32):
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.

Speaker 7 (21:47):
Last year, we introduced you to Mark Vodder, CEO of
Veterans Development Corporation. Mark is a career military man and
we're proud to have him back as the presenting sponsor
of the twenty twenty four DAV five K Boston.

Speaker 8 (21:59):
I'm a problem member of a military family, including my father,
Victor and my brother Timmy serving my country was one
of the greatest achievements of my life and it's why
I choose to give back to this special community. My
father build Veterans Development Corporation, and I am honored to
continue his legacy of working to help many disabled veterans
in their families. It also gives me great pleasure to

(22:21):
once again be the presenting sponsor of this year's DAV
five K Boston. I hope that by sharing my story,
many other disabled veterans will be able to reach their
goals once they conclude their service.

Speaker 7 (22:33):
Veterans Development Corporation is proud to be the presenting sponsor
of this year's DAV five k, taking place on Saturday,
November ninth at Fort Independence in South Boston. To register
for this year's race, visit DAV five k dot Boston.

Speaker 1 (22:47):
Followers in full swaying. The leaves are changing, the days
are getting shorter, and the cold is pinching closer. Don't
let the prospect of darkness at four pm get you down,
because your next incredible vacation is just a click away.
The US Virgin Islands are Saint Croix, Saint Thomas, and
Saint John. Enjoy one or all three and experience rich history,

(23:07):
world class cuisine, a wide variety of watersports, and the
most pristine beaches anywhere in the world. Go to visit
USVII dot com and check out the Americancribbean, where you'll
find all the information you need to book a trip
you'll never forget Upon arrival, you'll fall naturally in rhythm
with the heartbeat of the islands. Travel to and from
New England is simple and your stay will be hassle free.

(23:28):
Because this is the American Caribbean. There's no passport required
and no money to exchange. Whether it's a romantic getaway
or a family vacation, make your plans now to get
out of the gold and head to America's Caribbean paradise.
Go to visit USVII dot com and book your trip
of a lifetime today. That's visit USVII dot com.

Speaker 6 (23:47):
Hi, it's Chuck and Mike from the Armstrong Advisory Group
and we have a guide available this month titled social
Security and Taxes.

Speaker 1 (23:55):
Mike.

Speaker 6 (23:55):
When we talk about incorporating a social security strategy into
a financial plan, what are some of the considerations?

Speaker 4 (24:02):
Well, the consideration that everyone likes to focus on, and
for good reason, is Hey, how do I maximize my
benefits over my lifetime? If I live to a certain age,
when's the best time for me to claim social security?
Because obviously you have a wide range. You can start
as early as sixty two, as late as age seventy,
and depending on how long you live. There's a calculation

(24:23):
to figure out what would be the most benefits you
would receive over your lifetime. But I would argue that
for most folks that's probably not the most important consideration
to be making. What is the most important one, So
I would be focusing on the impact of certain items
to the success of your financial plan. So, for example,
if you look at your plan and say, wow, if
I face a lot of inflation and retirement maybe just

(24:45):
because prices in general go up more than I anticipate,
then delaying social Security in order to get a larger
base on which COLA is adjusted could be a really
positive impact to your plan. On the other hand, if
you have a shorter than normal life expectancy or a
longer than normal life expectancy, both of those come into

(25:05):
play as well when figuring out the appropriate time to
claim that social security benefit.

Speaker 6 (25:10):
Our guide this month is titled social Security and Taxes
and the number to call to request it is eight
hundred three nine three for zero zero one. Again, the
guy that's available this month is called Social Security and
Taxes and the number to call to request it is
eight hundred three nine three for zero zero one.

Speaker 1 (25:31):
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 Ask Todd with Todd Ludsky
on the Financial Exchange Radio Network.

Speaker 6 (25:57):
All right, let's get right to your questions with Todd.
First up, we've got Bob in situate. Bob, what's your
question for Tom Letsky?

Speaker 9 (26:08):
Good morning, gentlemen. My parents moved into a an independent
living facility uh SUB and paid a nine paid a
deposit which is ninety percent refundable upon death or move out. Subsequently,
my father or my mother qualified for mass Health in

(26:29):
the in the nursing home there. My father passed away
in January. We notified mass Hell, but that money moved
over to the nursing home, but it was still an escrow.
My mother passed away in June and that money was
never in her name and the beneficiary or on the
refund form was their trust. There was no lean by Masthell,

(26:55):
nor was that money in my mother's name, and it
won't have to go through proby. Do we have any
risk of the state trying to recover.

Speaker 3 (27:03):
That money, I'm gonna say based on that fact pattern, No,
there's there's Massachusetts. Just so we understand how it works
with a medicaid situation. Apparently mom got on medicaid. Mom
was on medicaid before she died, right, correct, Okay, so

(27:24):
somehow Dad ended up passing away whatever, and then Mom
gets on Medicaid. She gets on Medicaid because the money
sitting in that account somehow wasn't wasn't hers. I don't
know how that. I don't know how Mom got on
Medicaid with the money sitting in an account that was
really available to her. In other words, all you guys
had to do was simply ask for it, right, and

(27:46):
in that money what it came came out. So that
that's the part that's making me scratch my head, because
when you apply for mass health, if you're in a
nursing home, you know they want to know all your accounts. Now,
I get it, this was not an account in her name,
but yet she clearly was someone who could get the money.
So somehow we get on Medicaid. Now, the fact that

(28:08):
we're on Medicaid and this asset is going to avoid probate.
Mass Health can only recover against the probate a state. Now,
when you file her will and you file her you know,
if you have to go to probate it all there
is a document you got to file showing they're going
to ask you was she on mass health? You have

(28:30):
to check a box and the answer is you got
to send notice to the state and as part of
the probate, they then will come looking to say are
there any probate assets. If there are no probate assets,
then they cannot recover. So that's the rule in mass
They can only recover from the estate probated state, not

(28:52):
the grossest state. Having the beneficiary listed as the trust.
It should go right to that trust, and I think
it will void probate. But that's the process. Is there
ever a chance, you know, you never can say never,
But I'm feeling pretty good about it, so folks, I
hope that helps a little. But you know, when we're
talking about, you know, protecting assets from the cost of

(29:15):
nursing home care, an IRA is generally a big asset
and generally a complicated asset. So learn how you can
now do both estate planning estate tax planning protect it
from a nursing home, which was something we couldn't do
before without causing an adverse income tax on the required

(29:35):
minimum distribution. So a lot of heavy lifting can't learn
it on the radio. Call and get the guide Understand
how to fit your IRA into your estate plan the
right way eight six six eight four eight five six
nine nine or Legal Exchange Show dot com again eight
sixty six eight four eight five six nine nine or

(29:58):
Legal Exchange Show dot com.

Speaker 6 (30:00):
Todd, I've got another caller for you here. Let's go
to Joey in Wooster. Joey, what is your question for Todd?

Speaker 10 (30:07):
Hi, Good morning Todd. I'm attempting to put a rental
property into a revocable trust. But the lender says that
I need to refinance the property in order to do this,
and uh.

Speaker 1 (30:22):
Yeah, I don't know if that's accurate.

Speaker 10 (30:24):
And if so, what recourse do I have?

Speaker 3 (30:26):
Well, I can tell you that it's if it's a
revocable trust, right, not irrevocable.

Speaker 1 (30:33):
Correct, yes, correct?

Speaker 3 (30:36):
So I think you need to go to someone higher
up in that bank and say, look, I don't have
to refinance anything, because it's a revocable trust and transferring
my property encumbered property to a revocable trust does not

(30:56):
trigger a due on sale clause. Remember, mortgages have do
on sale clauses or a du on transfer clause, So
transferring the property to a revocable trust does not trigger
the dou on sale clause, so they can't call the note.
So I'm not even sure why we're telling the bank

(31:18):
just do it right, because I know it can't call
the note. In fact, there's a banking law called the
garn Saint Germain Act that actually explains this that they
cannot call a note when it goes into a revocable
trust because you're still really considered the owner. Now Medicaid
your revocable trusts. Yeah, we got to be a little

(31:39):
more careful, right, and that's why we usually reserve a
life estate when we do that to prevent a calling
of the note. But here, I'm not sure why you're
even having this discussion with them. I feel like you
can just go transfer it rental property or not. Now,
if it was going into an LLC, that's different. If
you're going to transfer this property into a limited liability

(32:00):
company because it's a rental property, then I'm gonna tell you, yeah,
you're gonna have to get bank permission before you transfer it.
Otherwise they could call the note if they find out.
So that's my comment. Hope that helps a little and
we can we can take it from there.

Speaker 6 (32:17):
Todd earlier, we were talking a little bit about I
rays and beneficiaries and and and trying to figure out
what to do with them in order to coordinate with
in a state plan. What other options are there out
there for someone who might have a sizable I ray,
might be worried about long term care costs and things

(32:38):
like that, Like, how does one approach that? If you
can't simply say, hey, I'm gonna pull this out, pay
all this tax and you know, move into the irrevocable trust,
what what does one do?

Speaker 4 (32:48):
Right?

Speaker 3 (32:49):
I think the best approach you're gonna have there is
you know this, what this guy is saying is to
you know, if you're married and you want to set
up a test a menary trust, which is a trust
built into your will. That's the best way to say it.
It's a fancy tax term, but you set up a
testamentary trust, which is a trust built into your will,

(33:12):
and then you name the estate as the beneficiary. Now,
remember you're normally hearing this. You're saying, my IRA should
be my spouse as the primary, my kids as the
alternate or the contingent beneficiary. Is very common, very normal.
Not so normal is naming the estate. Now if I
name the estate as the beneficiary, and again, it's the

(33:34):
estate of the participant of the IRA. So if I
name the estate the beneficiary, now what have I done
with the testamentary trust? I still haven't protected either husband
or wife's IRA from the nursing home by doing that.
Please understand that, well, they're both living. We haven't actually

(33:56):
protected anything in advance from a nursing home. But Todd,
you were saying there's a way to do this in advance.
There is. By setting it up this way, you are
now giving yourself a fifty percent shot of protecting the
asset in advance from a nursing home, and before there

(34:16):
was never a shot. So now, how does it work
if you've named the estate the beneficiary and that participant
dies and the surviving spouse is not the beneficiary, so
the money flows through probate? Yeah, I know, one negative,
not enough to not do it. Now it's sitting in

(34:37):
this testamentary trust for the benefit of the surviving spouse.
Surviving spouse now has access to both income and principle
of this money. Good. We're taking care of the spouse.
We want to do that. But now the surviving spouse
if gets sick, which could happen, could happen within six

(34:59):
months up in the next day, doesn't matter when it happens,
it's immediately protected from the nursing home. So did I
do any advanced protection of an IRA from a nursing home. Yes,
but in order to get there, I need one of
the spouses to pass away without going to a nursing home,
which what is everybody's hope anyway, So to me, there's

(35:25):
no downside really to trying this. Well, I say there's
no downside, but you really got to read the guide
and understand how that works because there's a lot of
boxes to check when you make this decision. Mister Lutsky,
Thank you so much for joining us today. Always a pleasure.

Speaker 1 (35:41):
This has been asked ond on the Financial Exchange Radio
network Askedd with Todd. Lutsky has been presented by Cushing
and Dolan, serving Massachusetts and New England for more than
thirty years helping families with the state and tax planning,
Medicaid planning, and probate law. Call eight hundred and three
nine three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of

(36:02):
Cushing and Dolan Armstrong advisor. He does not provide any
legal or tax advice. Please consult with your legal or
tax advisor on such matters. Cushing and Armstrong do not
endorse each other and are not affiliated. Spouses generally serve
as the beneficiary to your IRA or life insurance policy,
but naming your estate the beneficiary has quite a few benefits.
Cushing and Dolan are experts in elder law, and they
can help you protect your assets from probate and the

(36:23):
nursing home. By naming your estate as a beneficiary, you
can avoid the probate process, less than the chance of
creating any income tax issues on your rmds, and enjoy
enhanced the state tax reduction. Call Cushing and Dolan right
now at eight six, six, eight four, eight, five, six
nine nine and ask for their brand new guide called
Why Name your Estate and IRA Beneficiary? Learn about these
benefits and others and provide peace of mind for you

(36:46):
and your family during your retirement years. That number again
is eight six six eight four eight five six nine nine,
or you can request the guide online by visiting our
website at Legal Exchange Show dot com. That's the Legal
Exchange Show dot com. The proceeding was paid for and
the views 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

(37:08):
Advisory do not endorse each other and are not affiliated.

Speaker 5 (37:11):
The Financial Exchange In Veterans Development Corporation are proud partners
of the Disabled American Veterans Department of Massachusetts. The dav
provides thousands of hours of voluntary services at our VA
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(37:31):
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Please visit DAVMA dot org. That's DAVMA dot org followers
in full sway. The leaves are changing, the days are
getting shorter, and the cold is anshen closer. Don't let
the prospect of darkness at four pm get you down,
because your next incredible vacation is just a click away.

(37:54):
The US Virgin Islands are Saint Croix, Saint Thomas, and
Saint John. Enjoy one or all three and to experience
rich history, world class cuisine, a wide variety of watersports,
and the most pristine beaches anywhere in the world. Go
to visit USVII dot com and check out the Americancribbean,
where you'll find all the information you need to book
a trip you'll never forget. Upon arrival, you'll fall naturally

(38:16):
in rhythm with the heartbeat of the islands. Travel to
and from New England is simple, and your stay will
be hassle free. Because this is the American Caribbean. There's
no passport required and no money to exchange. Whether it's
a romantic getaway or a family vacation, make your plans
now to get out of the gold and head to
America's Caribbean paradise. Go to visit USVII dot com and

(38:37):
book your trip of a lifetime Today, that's visit USBI
dot com.

Speaker 6 (38:41):
Hi, it's Chuck and Mike from the Armstrong Advisory Group,
and we have a guide available this month titled social
Security and Taxes.

Speaker 1 (38:48):
Mike.

Speaker 6 (38:49):
When we talk about incorporating a social security strategy into
a financial plan, what are some of the considerations?

Speaker 4 (38:56):
Well, the consideration that everyone likes to focus on, and
for good reason, is, hey, how do I maximize my
benefits over my lifetime? If I live to a certain age,
when's the best time for me to claim social security?
Because obviously you have a wide range. You can start
as early as sixty two, as late as age seventy,
and depending on how long you live, there's a calculation

(39:17):
to figure out what would be the most benefits you
would receive over your lifetime. But I would argue that
for most folks that's probably not the most important consideration
to be making.

Speaker 3 (39:26):
What is the most important one?

Speaker 4 (39:27):
So I would be focusing on the impact of certain
items to the success of your financial plan. So, for example,
if you look at your plan and say, wow, if
I face a lot of inflation and retirement maybe just
because prices in general go up more than I anticipate,
then delaying social security in order to get a larger
base on which COLA is adjusted could be a really

(39:49):
positive impact to your plan. On the other hand, if
you have a shorter than normal life expectancy or a
longer than normal life expectancy, both of those come into
play as well well when figuring out the appropriate time
to claim that social security benefit.

Speaker 6 (40:04):
Our guide this month is titled Social Security and Taxes
and the number to call to request it is eight
hundred three nine three for zero zero one. Again, the
guy that's available this month is called Social Security and
Taxes and the number to call to request it is
eight hundred three nine three for zero zero one.

Speaker 1 (40:25):
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. A legal exchange with Todd Lutsky. If you
are a loved one needs a nursing homestay, call Todd

(40:45):
right now at eight sixty six eight four eight five
six ninet nine and let him make sure your assets
are protected. That's 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 Exchange with Todd Lutsky. I'm
Susan Powers, a financial advice with the Armstrong Advisory Group,
and I'm joined, of course by Todd Lutsky, a partner
with the law firm of Cushing A. Dolan with a
master's in taxation. So Todd, I have a few kind
of follow up questions to some things we've already talked
to about today, and specifically about naming your estate the beneficiary.

Speaker 3 (41:22):
So it's complicated.

Speaker 2 (41:23):
It is complicated, and we have a lot of mutual clients,
and I know that from my clients that have really
large irays when they've come in to chat with you.
Prior to this being an option, you may have leaned
towards saying, look, you can't protect this, you know, two
million dollars worth of I rays. Oh sure, why are

(41:46):
you going to do an irrevocable trust just for the
house at this point? So would that kind of change
your recommendation now that there's something that can be done
to potentially protect those irays? Last minute.

Speaker 3 (41:59):
Yeah, this is a really good question because when we
talk about these issues, every single case will be different.
This is a case by case by case by case analysis, right,
because of all these issues. So if somebody comes in,
you know, and they have two million dollars in one IRAE,

(42:25):
that that might be a stop. Why am I doing
medicaid planning? Right? It might be simply because that's a
big number. And if one spouse gets sick and and
goes to the if the one with the IRA gets
sick and goes to the nursing home, no matter what
we're doing, if the first spouse that has the IRA

(42:48):
gets sick and goes to the nursing home, the surviving,
the healthy spouse is going to have to decide do
I want to go on Medicaid for my husband or not.
Let's say the husband got sick. In order to do that,
we would have to pull two million dollars out of
the IRA then give it to her, but lose forty percent.

Speaker 2 (43:09):
I mean, so you're talking about eight hundred grand coming.

Speaker 3 (43:12):
We would never do that, right, You just would never
do that because you're probably better off paying privately because
if someone dies a year after you pull it out
you could have spent one hundred thousand instead of eight
hundred thousand in taxes.

Speaker 2 (43:25):
By the time it comes out of your IRA. If
you do, it's not coming out tax for you, but
it's pretty darn close because you've got that offsetting medical deduction.
If you're private, that's right, that's staring right. So it
has to make sense financially, has to make sense financially
to do it, and a large IRA might not. Now
let's again, so that's a big, one, big factor we

(43:46):
have to think about. Remember the example I did in
our show today was you know they only had I
don't say only, but seven fifty in an IRA is
a lot different than two million. Absolutely rightly, you still
have that question if one gets sick, no matter what,
that's always there. Remember this is design to shelter things
on the first death someone dies and doesn't go to
the nursing home, or someone dies with a large IRA,

(44:10):
pays privately and doesn't go went to the nursing home
but paid privately, never went on Medicaid.

Speaker 3 (44:16):
That could work. So now let's play out the string.
Say you've got someone with a two million dollar IRA
but a two million dollar home, and that's pretty much
their estate. They might have a small checking savings, maybe
one hundred thousand dollars in a brokerage account, right, that's
their home. Well that's fifty percent of the estate. Well,
I can protect fifty percent of the house. Some might say,

(44:39):
why bother because I got two million dollars. I get it.
You got to work those numbers. But remember if it's
if that first spouse who has the two million dollar
IRA dies and you did the testamentary trust, it will
ultimately shelter it for the surviving spouse.

Speaker 2 (44:56):
Now you've got three million dollars protected.

Speaker 3 (44:59):
Well, well, which is gritty two and two. You have
four million dollars protecting two for the house because the
two if it's a two million dollar I right. But
if you're right, if it's split between two spousals, would
be a million dollar iras, so.

Speaker 2 (45:10):
It's still huge protection.

Speaker 3 (45:11):
Yeah, you really have to run the numbers here when
you do this. That's that's the that's what you need
to explain to the client. What are the upsides? What
are the downsides of doing this? Generally you're gonna find
more upsides than downsides. But folks, the point of this
discussion is I don't know how to handle my IRA.

(45:32):
It's part of my estate and I don't know what
the best way is to handle it. This guide will
help you with that. And most people have an IRA,
and most people have the IRA as one of their
larger assets in their estate. Call and get the guide.
Why name your estate and IRA beneficiary eight six six
eight four eight five six nine nine or Legal Exchange

(45:55):
Show dot com. It's the end of the month, folks,
last chance to get it eight sixty six eight four
eight five six nine nine or Legal Exchange Show dot com.

Speaker 2 (46:05):
What do you do with roth iras Todd? Would you
also do this testamentary language and name the estate the
beneficiary of the row?

Speaker 3 (46:13):
You could?

Speaker 2 (46:14):
I mean, if you have a large wroth ira which
you can't protect in advance. Now there's no tax implications
if you pulled it out, but you like that tax
free growth too.

Speaker 3 (46:24):
That's exactly the thing to think about with an IRA.
So if you if you want to leave the first
of all, if you have a roth ira, can you
when you're doing your estate plan, your irrevocable trust planning
decide well, you know, I've got this five hundred thousand
dollars wroth they're usually smaller than the big iris. Yeah,

(46:45):
I've had it for ten years. I've enjoyed tax free
growth for ten years. I'm older now, and I want
to protect it from the nursing home. Okay, you can
pull it out, yep, no tax. Put it in your trust.
It's no longer an ira, a wroth ira, and then

(47:09):
invest it accordingly. You want to buy tax free bonds
or something, you kind of have your own wroth all
over again inside the trust, and in five years it'll
be protected. So that's an option for some people.

Speaker 2 (47:23):
I think it's a matter of like kind of reassessing
what your priorities are at that point in life, to say,
is it more important to me to protect from nursing
home expenses or to have this tax free growth. Then
a lot of them at that age will say I
really want to protect it more than the benefit of
the tax free growth.

Speaker 3 (47:41):
And I think the reason that might be is because, look,
if I have kids that I want to leave it
to as well. Yeah, I've gotten tax free growth, that's great.
But if I get sick and the nursing home takes
it all, that tax free growth that I've enjoyed is
really for not so rather than be greedy, I'm happy
with what I have. I'm going to take my winnings

(48:02):
off the table. You've heard this in the investment world,
and I'm going to put it in the trust and
then let it grow there. At least I know i'll
have it either for the spouse who's alive or the
kids when I die, because it's protected from the nursing home.
So I don't know that I would necessarily name the

(48:23):
estate as the designated beneficiary on that although if I'm
not going to put it in the trust while I'm
doing my lifetime planning, but I want to protect I might.
I mean, it can't hurt. There's certainly no adverse income
tax consequence in naming the estate the beneficiary. It still
has to come out, but when it comes out, it's

(48:45):
tax free. So even if I was under the required
beginning date, I don't care. It can come out over
five years. It's tax free, and it's protected from the
nursing home. So I kind of like this. Roth IRA
explore that a little bit.

Speaker 2 (49:00):
How about once the first spouse passes away and their
IRA is now owned by this testamentary trust, what happens
if the surviving spouse goes into the nursing home. They
had full access to that money that was coming out
of the IRA. What happens to that now is that
suddenly risk if they actually go into the nursing home.

Speaker 3 (49:22):
No, So that's what's really good about it. So if
you mean if they were the beneficiary, it would have
went right to the surviving spouse and they could do
whatever they want with it, right, is that what you're saying?

Speaker 2 (49:31):
No, No, you go through this testamentary process.

Speaker 3 (49:34):
Now it's in the trust.

Speaker 2 (49:35):
Now it's owned by the testimonary trust, the IRA surviving spouse.
She has a surviving spouse who has access to all
that money that's in that testamentary.

Speaker 3 (49:43):
Yes, she does. She can get income and she goes
to the nursing home. So that's a great question. The
fact that she has access to it does not mean
it's at risk for the nursing home. Because it went
through a will into a trust. There's regulations that say
the trust and transfer rules don't apply. The Medicaid trust

(50:03):
and transfer rules don't apply. So that inability to get
if you have discretionary distributions of principle and income like
it would be at risk in a regular situation at
Medicaid Trust. It's not at risk. Nice in here and
no five year weight. And that's how it works, folks.
Lots of heavy lifting here. Get the guide. Don't try

(50:23):
and learn it all on the radio. It's too much.
Why name your estate and IRA beneficiary eight six six
eight four eight five six ninety nine or Legal Exchange
show dot com. It's the end of the month, folks.
Eight six six eight four eight five six nine to nine.

Speaker 2 (50:41):
Todd Lutsky from the law firm of Cushing and Dolan,
thank you so much.

Speaker 3 (50:45):
Thank you, Susan, always a pleasure.

Speaker 2 (50:47):
I'm Susan Powers, 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 Lutsky.

Speaker 1 (50:57):
Spouses generally serve as the beneficiary to your ARA or
life insurance policy, but naming your estate the beneficiary has
quite a few benefits. Cushing and Dolan are experts in
elder log and they can help you protect your assets
from probate and the nursing home. By naming your estate
as a beneficiary, you can avoid the probate process less
than the chance of creating any income tax issues on
your rmds and enjoy enhanced a state tax reduction. Call

(51:20):
Cushing and Dolan right now at eight six six eight
four eight five six nine nine and ask for their
brand new guide called why Name your Estate and IRA Beneficiary?
Learn about these benefits and others, and provide peace of
mind for you and your family during your retirement years.
That number again is eight six six eight four eight
five six nine nine. Or you can request the guide
online by visiting our website at legal exchainshow dot com.

(51:43):
That's the Legal exchainshow dot com. The proceeding was paid
for and the views 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 6 (51:57):
According to a survey conducted by the Nationwide Retirement Institute,
more than two thirds of Americans say that the candidate's
positions on social security reform will influence how they vote
in next month's election. Hi, this is Chuck Zauta from
the Armstrong Advisory Group. If you're concerned about social Security.
Call us today at eight hundred three nine three for
zero zero one and ask for our new free guide

(52:19):
called Social Security and Taxes. Your benefits are an important
piece of your retirement income, so it's crucial to understand
how to maximize them. In this month's guide, we'll walk
you through everything that you should know about your Social
Security benefits, including how they may affect your taxes. Get
your free copy of this guide today by calling eight
hundred thirty nine three for zero zero one. That's eight

(52:40):
hundred three nine three four zero zero one.

Speaker 1 (52:42):
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 a state planning advisors before
making any investment decisions. Armstrong may contact you to offer
investment advisory services. Follows in full swaying. The leaves are changing,
the days are getting shorter, and the cold is anshen closer.

(53:03):
Don't let the prospect of darkness at four pm get
you down, because your next incredible vacation is just a
click away. The US Virgin Islands are Saint Croix Saint
Thomas and Saint John. Enjoy one or all three and
experience rich history, world class cuisine, a wide variety of watersports,
and the most pristine beaches anywhere in the world. Go

(53:24):
to visit USVII dot com and check out the Americancribbean,
where you'll find all the information you need to book
a trip you'll never forget. Upon arrival, you'll fall naturally
in rhythm with the heartbeat of the islands. Travel to
and from New England is simple, and your stay will
be hassle free. Because this is the American Caribbean. There's
no passport required and no money to exchange. Whether it's

(53:44):
a romantic getaway or a family vacation, make your plans
now to get out of the cold and head to
America's Caribbean paradise. Go to visit USVII dot com and
book your trip of a lifetime today. That's visit USVII
dot com.