Episode Transcript
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Speaker 1 (00:00):
Hello, and welcome to the David Carrier Show. I'm David Carrier,
your family's personal attorney, and you have found the place
where we talk about a state planning, elder law, real
estate and business law. So give us a call. Why
don't just six one six seven seven four twenty four
twenty four. That's sixty one six seven seven four twenty
four twenty four. We'll get your question, comment or concern
(00:23):
on the air. Or you can always go to the
website Davidcarrier Law dot com. And on the website David
Carrier Law, squish it all together Davidcarrier Law dot com.
You know, there's all kinds of great stuff on the website,
including our AI expert. It's the latest and greatest from
the world of artificial intelligence, because natural intelligence just just
(00:47):
stain't enough, you know what I'm saying. Anyway, if you
go there, you can ask it questions and it'll see
rather than click, click, click all around the website trying
to find stuff. And we put a lot of work
in to that, you know what I mean, a lot
of work into making that thing effective, useful. But who
wants to spend all day clicking around the website? Nobody uh.
(01:11):
And so we've got the AI expert. So if you
ask a questions, it'll go look for you, you know,
and you say, well, give me something specific or whatever.
Now it's not legal advice. It's not legal advice. You see,
the problem with the AI is sometimes they make stuff up.
They do. I mean, it's unbelievable they make stuff up.
But but as a first as a first go at it,
(01:35):
you know, as a hey, I was kind of wondering, right,
it can be very very very useful. And we are
working all the time, you know, to make it less, uh,
to make it hallucinate less, right, to make stuff up less.
And we've we've made some progress on it. I'm not
saying me personally, but the people that I work with,
you know, to uh, you know, to get it right. Obviously,
(01:59):
we want it to be accurate. But it's not a
it's not you know. I I've been at this for
a while now, you know, forty four years come January,
and uh, you know, people keep telling me, oh, lawyers
are going to be replaced, lawyers are going to be replaced. Well,
I haven't seen it yet. I haven't seen it yet.
I mean what I what I see is there's a
(02:20):
lot of bad lawyer in out there, let's be let's
be honest about it. I mean, it's like anything else.
Speaker 2 (02:26):
There are.
Speaker 1 (02:27):
But you see, here's the different here's the difference. Here's
the difference between bad lawyer in and bad some other stuff.
It's like doctrine. Lawyer in and doctrine, they're they're kind
of like the same. It's like, how do you know
they're any good? How do you know they're terrible? Well,
people die for lots of reasons, you know what I mean.
(02:48):
I mean, maybe there was maybe there really was nothing
they could do about it. Maybe your doctor's not an idiot,
you know, who didn't recognize the symptoms that you had
raised my hand and instead, oh, oh no one could
possibly diagnose that, you know, which is what everyone else
says to cover for him. But I mean it's the
same way with lawyers, right, I mean, you don't know,
(03:09):
you don't know. It's very difficult to know, right, It's
very difficult to know if you've got to go to
one or a bad one or somewhere in between. Very difficult.
It's not like a plumber, Okay, So like if you
have a plumber come out to your house and say hey,
my toilet ain't working. Fix it please, So we say please,
(03:31):
it's important. Well if you know, if you get a
flood of brown throughout your house, well you can be
pretty sure that wasn't a very good plumber, right, I mean,
if the water doesn't turn on and it comes out
looking you know, horrible whatever, pretty tough, Pretty easy to
(03:53):
say the plumber didn't do the righteous job. You know,
same way with an electrician. You know, if you're roofly
you had a bad roofer? Is that isn't that? You know,
if your car doesn't go, I guess your auto mechanic
wasn't what they ought to be, Okay. I mean there
are some things where you can you know, if it
tastes like you know, sawdust. Yeah, you're not a very
(04:15):
good cook, are you. And it's easy to tell with
with legal stuff. It's very difficult to tell with medical stuff.
Very difficult to tell even with accountant taxes and stuff.
It's like, you don't know, how do you How are
you supposed to evaluate that?
Speaker 2 (04:33):
Right?
Speaker 1 (04:33):
That's I'll just straight up with you. I mean, that's
that's the big that's the big challenge. Right. Let you
know you hear me say it, hear me saying, well,
I think most of the state plans fail. What does
that mean? Well, I can tell you very specifically that
it What it means is that if you have a
trust and your trust is not funded. In other words,
(04:54):
if nobody went through the process to make sure that
everything was actually in the trust, your trust isn't gonna work.
I don't care what else is true about the trust.
If your stuff is not in the trust, trust isn't
gonna work because it can't work, all right, it doesn't work.
It's just that's very. That's a very. That's that's the
(05:15):
that's the toilet overflowing after the plumber's done with it,
you know, and oh my god, you know get some
lysole in here.
Speaker 2 (05:23):
Right?
Speaker 1 (05:23):
Well, but but when are you gonna find out about that?
How do you How do you know that? You don't
know that, You don't know that till after you're gone,
and nobody nobody. It's not obvious, it doesn't smell, there's
no you know what I'm saying. Fortunately, Al from Grand
Rapids is rescue you from that EXE Jesus. So Al,
(05:44):
how can I help?
Speaker 2 (05:47):
Well? D you set up some stuff for us with
Protecting Trust and the legacy trusts and yeah, and the
question is regarding the poor O one K programs that
through work uh huh the uh. And the only reason
I bring it up is because there was a change
(06:07):
in who was administering that program. Is that okay, account
that is that account that is in my name or
is my account in the four O one K included
as part of the protection Trust?
Speaker 1 (06:25):
Well, it's not in the Protection Trust because with tax
advantaged ed assets like i ra's four oh one K
four oh three B thrift savings plan, what are the
other ones? Uh mipsters, you know, all these all these
taxi you know, railroad retirement, all these tax advantage plans
(06:46):
are individual to the beneficiary to you. Now, we can
move them from one spouse to the other. We've established
that through the Court of Appeal. We've established that we
can do that, you know when we need to in
long term care, and we can actually put them in
a trust. And your trusts were set up to do
(07:07):
this as beneficiary, so I can put them in a
trust when you die, okay to put them in the trust,
and then there are benefits to having them in the
trust at that point. Okay, so I don't use the
Protection Trust for anything, but for I don't use the
Protection Trust put it that way. For tax advantaged assets
(07:30):
like IRA four oh one K four three B through savings,
we don't use it for that. That's not the right
tool for that job. There's other stuff that we do
for that. For the iras. Okay, so the beneficiary on
the IRA, are you married?
Speaker 2 (07:47):
Al?
Speaker 3 (07:49):
Yeah?
Speaker 1 (07:51):
Okay, so.
Speaker 2 (07:54):
It's the look back period for long term care? Should
is that accountable asset towards that? And if it is,
why would we not have instead of being the owner
of the account, have the Protection Trust be the owner
of account within that bourah one.
Speaker 1 (08:14):
K Right, good question, and here's the answer. It is
accountable asset, right, it is. For sure, it's accountable asset.
Which is kind of weird because it's not really worth
the number that you see on your IRA. It's the
number that the balance that you see in an IRA
four one K four or three B all the rest
(08:35):
of those, unless it's a rough the number that you
see is not the number you get. You have to
reduce that by twelve fifteen twenty thirty forty percent, right
to find out how much it's actually worth. Because you
still have to pay the taxes on it. The problem,
the reason we don't put those assets into the trust
(08:56):
directly is because if we did that, we would try
the income tax right now and we would lose the
tax free compounding that you're getting right now by having
that stuff remain in the I R four one K
four or three B whatever it is. D safe explaining, Okay,
(09:16):
so that's why we don't do it. Now. That doesn't
mean that does not mean that we're writing it off,
or we're ignoring it, or we're sacrificing it, or we're
giving it away. We are not doing that. And when
we get back, because I'm down to like my last
minute or so here and you really need, we really
need to get the explanation, we're not giving up on
(09:39):
the retirement plan accounts. Okay, we're not doing that. I
went through I went through a whole bunch of I
had to cross the rubicon, you know, to uh to do.
I was grieved by every circuit court judge in Kent
County with the technique I'm going to tell you about.
(09:59):
And then next one. Now, it took three years three
one two three count of three years before the before
the Court of Appeals finally said, you know, there's nothing
the matter with this. What the hell are you guys
complaining about? You know, so there's a happy ending to
the story. But but it wasn't easy and it wasn't
comfortable in order to get this, to protect the IRA,
(10:23):
the four one K, the four three be all those
retirement The reason I rattle through that every time is
because if I don't, then someone says, oh, but I
have a thrift savings plan. So that's the work. I'm
a federal employee. It's like, yes, yes, it works. So
when we get back out, I will explain exactly how
we're going to protect everything you've earned. Okay, when the
(10:43):
time comes, fair enough.
Speaker 2 (10:46):
Thank you very much. I will hang up and wait
patient for your return.
Speaker 1 (10:52):
Okay, all right, we'll be right back. I'm David Carrier,
your family's personal attorney. Well, come back to the David
Carre your show. I'm David Carrier, your family's personal literorney. Now,
remember I'm gonna We were just talking with with Al
and his question was, hey, you guys did my trust.
But you know, I got a big chunky amount there
(11:14):
in my four oh one K, and you did not
put that in the protection trust what's going on with that?
I wanted to protect that and you didn't do it, okay,
so fair enough, you know. I mean, let me just
say that if this is to be done right, if
(11:37):
you do you're a state plan correctly, Okay, the chances
that you don't catch it all are almost one hundred percent,
all right, because if you do it the way then
just the customary, the traditional, the way everybody does it, okay,
then it's fairly straightforward. It's easy. It's oh yeah, yeah, yeah,
(12:01):
yah yeah, fine, no problem, okay when you're trying to
make sure that middle class people don't get screwed the
way they've been screwed routinely when it comes to this thing,
all right, we're trying to do something that's quite a
bit different than what most people are trying to do, okay,
and so it's it can be a little difficult, put
(12:26):
it that way, complex difficult, you know. And here's the problem.
Here's the problem. Right, if you understood how your car
actually worked, you'd never get in it, okay, with explosions
going on under the hood and the you know, oh
wait a second, you mean I've got all this electricity
stored up. If you've got electric car or whatever, Okay,
you'd never use it. The good news is you don't
(12:48):
have to know how it works for it to work.
It's like anything else. I mean, if you could, if
you could see all the electromagnetic radiation that's coursing through
your house right now, you go live in a tent. Okay,
So at some point you just don't have to worry.
You have to not worry about it. Now. That doesn't
mean that we don't explain it, because we do explain it, okay.
(13:11):
But the fact of the matter is that most people
kind of okay, how does it work? How does that work?
What does it do for me? And then they say
I don't want to I don't care how it works.
What does it do for me? Okay, Well, here's what
it does for you. So let's let's just accept that
there's a lot of stuff going on under the hood here. Okay,
can we do that? That's number one? Number two? What
(13:37):
will I not do to defend middle class families who
have worked and saved and deserve, in my opinion, deserve
because they've earned it, right, because they actually put the
time in, and they defer gratification They didn't spend their
money right away, they didn't borrow more money to go
(13:58):
on Cruisism whatever else. They worked and they saved and
they built, and they all those good things, you know
what I mean. So they would be okay, so their
kids would be okay. All right, what lengths will I
not go to? Well, I'm not gonna commit fraud. I'm
not gonna lie, I'm not gonna I'm not gonna cheat
or steal. I'm not gonna do any of that. Right,
but within the context, right within the legal framework, I'm
(14:22):
gonna keep looking for tools that I can use that
will benefit the middle client, the client, okay.
Speaker 2 (14:32):
Right.
Speaker 1 (14:33):
You know, back in the day when you know is
in the American independence, you think that's an important thing.
George Washington thought it was an important thing. You know
what George Washington and the Continental Army were willing to do.
They were willing to cross the Delaware River full of ice, right,
They were willing to on Christmas Eve and go after
the Hessians, the mercenaries that the British had hired, right
(14:57):
and kill them in their sleep, right eve. Oh, George Washington,
you horrible person, killing poor drunk Hessians who were celebrating
Christmas in their sleep. Yeah, well that's what we had
to do. And it was okay according to laws of
war to the extent there were any laws of war
back in the seventeen hundredths, you know, that was okay, Okay.
(15:18):
He was willing to push the envelope. He was willing
to do what it took, and so was the so
were the patriots who followed him and all the rest
of it. And that's kind of my ideal. It's like,
what would George Washington do if he had the tools
and he saw the objective? Would he do it? Or
would say I'm not going to do that because nobody
else did it before. It's like, George Washington wouldn't do that.
(15:41):
George Washington would charge on. Okay, So am I George Washington?
Well no, not really. And you know, yes, I'm being
glorious and self regrandizing and all the right. Sure I am, okay, fine,
But here's the deal with the eye. So how do
I bring this back to the IRA. The answer is
the answer is we used to. So you or your
(16:03):
spouse needs long term Let's say let's say it's Al
and his wife now needs long term care Okay, now
we gotta we gotta or he needs long term care.
He needs long term care, put it that way. And
he's got this honkin' IRA four one K at his
job because why because he's a hard worker, because he
cares about his family, because he wants to be secure,
(16:23):
because he's not all the rest of this stuff. Okay,
he wants all that, but now he's got the dementia,
early onset dementia, he's got als, he's got you know,
he's got whatever it at, Parkinson's MS. Horrible stuff happened
to him, and now he needs care, right, but he
doesn't get care. Why doesn't he get care? Well, because
he's got a pension. Maybe because he's got this big
(16:46):
honkin four A one k, right and it's in his name.
So what do we do about that? Well, the answer
is there's nothing to do about that because he's got
the that's his pension. And he doesn't qualify because he's
got too much income. Oh no, terrible.
Speaker 2 (17:02):
Uh.
Speaker 1 (17:02):
And he doesn't qualify because he's got all this four
oh one K money, Oh no, terrible, come back and
spend it all down, right. This is the answer. This
is the real answer. There's the answer that the customary answer,
the traditional answer, the answer that everybody does. Most people do. Okay,
it's like, okay, I'm gonna spend it all down and
(17:24):
when it's all gone then you know. Oh and by
the way, the spouse who's been hanging on here, too
bad for you. I guess you're gonna be greeting, you know,
greet the Christmas shoppers at the you know, at the Walmart,
you know or wherever. All right, not if there's anything
wrong with greeting people, but still it's not what you
(17:44):
wanted your wife to be doing, you know, because that's
not why you save the four oh one k I
don't think right, you want to be secure and all
the rest. Okay, So what we used to do, and
I'm talking more than ten years ago, what we used
to do routinely was cash in the IRA. It was like,
too bad, so sad with the pension. Nothing we can
do about that. Uh, And we'll cash in the IRA. Yes,
(18:08):
we'll pay the tax on it, but we'll transfer the
balance over to the spouse. We'll annuitize that and you know,
at least we get to keep or we do the
spousal Benefit trust for that and we'll keep, We'll keep
what's left. Okay, sixty percent of something is better one
hundred percent and nothing. So but it wasn't a good solution.
(18:29):
I didn't like it, you know, I mean, George Washington
didn't like cornwallis hanging out either. Okay, you don't like hesitians,
you know, cluttering up the landscape. You don't like that.
And so you got to figure, you know, what can
you do? What can you do? Okay, So that that's
the question, right, what can you do? And the answer
(18:54):
which wasn't my answer. I was talking with a buddy
of mine years ago and he said, well, why don't
you do an action? What's called an action for separate maintenance. Now,
an action for separate maintenance is not a divorce. It's
not a divorce, not a divorce. I have people, you know,
when we're talking about this, we have everybody repeat at
least three times, it's not a divorce, because it's not
(19:14):
a divorce, and you shouldn't get divorced. And I don't
want you to get divorced. And now that music means
I got to get out of here. But when I
come back, I'll explain how the rest. But remember, no divorces,
not in this time of year. Anyway. You've been listening
to the David Carriers Show. I'm David Carrier, your family's
personal attorney.
Speaker 3 (19:33):
David's got the how too you're looking for. Just call
seven seven four. This is the David Carrier Show.
Speaker 1 (19:42):
Be double ls. Seeing you thought rappers were the first
ones to spell out where it's anyway, Welcome back to
the I think about that I'm doing here. Welcome back
to the David Carrier Show. I'm David Carrier, your family's
personal attorney. What we're talking about from a caller who's
(20:05):
also a client, and he's wondering, well, wait a second,
why didn't you put my four oh one k in
my protection trust? I said, well, your protection trust is
for your house, your cottage, your you know, your taxable
investment account, your CDs, blah blah blah. We're going to
get take those off the table using that technique. Okay,
(20:26):
we've done one hundreds of millions by now, anyway. Uh yeah,
So we're going to take those assets off the table
that way, one family at a time, one middle class
family at a time. But after you know, forty four
years of doing this, thirty five thirty six years almost
uh in my own name. It adds up anyway. The
point is what about the four oh one k? I
(20:49):
can't put the four oh one k in the trust?
Why not? I can't do it because that would trigger
the income tax? Do you want me to trigger the
income tax on your IRA? I didn't think so four
one K four three B through SIGNIFA. No, you don't
want me to trigger the income tax on that. I
don't want to trigger the income tax on that. It's terrible, awful, bad, terrible,
rotten and horrible. And the fact that your kids do
(21:10):
it as soon as you reach room temperature is abomination.
And there's ways to fix that too. But the point
is I'm not going to do it to you. But
but it is accountable asset. So historically the way this
evolved was what do we do with the IRA? I
don't know, cash it in? I guess because there's no
other way to save any of it. So we cash
(21:32):
it in, pay the huge taxes on it. Terrible, hate it,
but what else are you gonna do? And then a
buddy of mine suggested, well, why don't you do a
in action for separate maintenance? They allow those guys from
New York. He's they allow those in Michigan, don't they.
And I'm like, well, I don't know whether what is that?
It's a it's a way too, it's property settlement. It's
(21:56):
a property settlement. Part of divorce without a divorce. You're
not getting divorced. You're married. Okay, so we don't stop that.
You are married, not a divorce. But and since the
Supreme Court sendra Dale O'Connor, god Rest her soul, made
it very clear that the state has no interest in
(22:18):
figuring out what the content of your marriage is. Okay,
that's not a place. Once you're married, it's up to you, guys,
to decide what that means to you. This mystical magical thing.
Read for the great poetry of it. Read some of
those decisions. And what's his name? It was a Kennedy
at Anthony Kennedy who also contributed to that genre. Anyway,
(22:39):
the point is that we're not getting divorced. There is
no divorce here. So my client, you know, our caller,
Al calls in. He said, hey, how come you're not protected?
My four one k that's where most of the money is.
And for an awful lot of families that the guy's
IRA is where the money is is. Plus the guy
(23:00):
has a pension, right, and the woman who was raising
the kids, et cetera, et cetera, has a smaller IRA
or none doesn't have a pension. That is a very
typical situation because then when the guy gets the dementia,
the Parkinson's, the Alzheimer's, the whatever it is, right now,
she's she's out in the cold, right because the pension
(23:20):
was his pension which is now going to a nursing home.
It was his IRA, I know, and that was supposed
to be years years of support in addition of Social
Security supposed to be years of support that they work
together to build up all the Yeah you get all that, okay,
but now it's got to all go away. Well no,
it doesn't all got to go away. And that's what
(23:41):
the action for separate maintenances. So it's about, I don't know,
it's like eight or nine years ago we first started
doing this, and we had immediate success with it, right
The courts were like, yeah, fine, there's no problem with this,
and different counties and all the rest of it were
moving the iras over from the spouse who needs long
term care to the what we call the institutionalized spouse,
(24:03):
the one who needs care to the community spouse, the
one who's living in the community. Right, you could do that.
You can move the pension, you can move the IRA.
It was fine until until one of the judges in
Kent County and you can look it up, said well,
wait a second, no, no, this is not right. You
can't do this. This is an end run around the law. Well,
(24:26):
the last time I checked, like the forward pass and
n run is a valid play. But they didn't like it,
and so every apparently every circuit court judge grieved one
of my attorneys who was working in the firm, and
not hard to figure out where that was directed, even
though my name didn't appear, thank god, you know. Anyway,
(24:51):
the long story short is they thought it was horrible, terrible,
no good, very bad to move the pension, to move
the IRA one K four or three B from one
party to even though other counties had no problem with it.
And not only were they saying no, it's wrong legally
like you're a bad person for having done this, and
(25:12):
so we want your license serious and so you know.
So it went on for about three years where pending
at the court of Appeals And finally the Court of
Appeals came out and said they can't see what the
problem here is. What are you guys complaining about? This
is perfectly aokay, that was several years ago, and since then,
(25:32):
I mean before that, we've done dozens and now we've
done hundreds of these where with the IRA? All right,
So this is the answer to Alic's question, why didn't
you put the four O one k in the trust?
Because if I did, I'd have triggered the income tax.
Oh so I'm just gonna sacrifice my IRA. No, we're
not doing that. When the time comes, not now, we
(25:54):
don't have to now. When the time comes, we're going
to go to court and we're going to do it
what we call an action for separate maintenance, and we're
gonna move your IRA four oh one K, four oh
three B four fifty seven. I don't know thirst savings plan.
We're gonna move it from you over to your spouse.
We're not sacrificing an we're not giving it away. Right,
(26:16):
We're gonna move it right with no tax consequence, over
to your spouse. And we're gonna do the same with
your pension. So you got a pension. You say, yeah,
but my wife gets my pension when I'm dead. Yeah,
I know, but this part of the pension right now,
we're moving over to her as part of this action
for separate maintenance with a qualified domestic relations order marital quadro.
(26:38):
Somebody's calling it. I don't care what you call it.
We've been doing it for years now, it's now it's
the hot thing.
Speaker 2 (26:43):
Oooh.
Speaker 1 (26:44):
You know, maybe you should have trademarked it or something.
I don't know, but anyway, the idea is, we've we're
doing this. It works every time you do it, but
we're not done yet. We're not done yet because forty
fifty percent of the time, at least forty percent of
the time, the caregiver's spouse dies first. So what do
we do now? I moved the pension over to the spouse.
(27:06):
I moved the IRA four or one K over to
the spouse. Well, what happens if they die first, which
happens at least forty percent of the time. Now what, Oh,
I just I lose it. No, I don't want to
lose it. So there's another trust that we do. I know,
I know, I'm piling on the trust. But the fact
of the matter is that if you do this stuff correctly, right,
(27:30):
it doesn't matter who needs the long term care first.
I can adjust. Okay, some of the stuff is solid, right,
the tax paid stuff, the house, the cottage, the hunting property,
the farm, the whatever it is that's solid, that's locked
the way. We don't have to worry about it. Okay,
off the table. We're starting on at least second base. Okay,
(27:52):
but now I don't. But I still have to make
it home. So I don't want to lose the IRA
four or one K four or three B. This is
what I'm going I'm going to move it to your spouse. Okay.
Now you say, well, wait a second, I don't have
a spouse. I say, well, okay, then I can save
about half of it. I can only save half. I'm sorry,
I can't do better than that. But for a married couple,
I can save the whole the whole thing. I'm not
(28:14):
going to be paying any exorbitant taxes whatever, because I
move it over to the spouse, who can have an
unlimited amount of income. An unlimited amount of income, right,
you can't, but the spouse can. And so now we're
gonna start taking those required minimum distributions through an annuity. Right,
we're going to innuitize it over their life expectancy. What
(28:35):
does that do? What it does? What it does is
it protects your spouse. I'm not giving this stuff away.
I'm not losing to taxes. I'm not just willingly throw
my hands up in the air. Oh nothing I can do. No,
We're going to preserve what you have earned to provide
the security, right, the certainty, the security that again that
(28:57):
you've been working for all these years. All right, we're
not giving up on that. We're not giving that away.
We're not pretending that there isn't value to it. No,
we're not doing any of that. We're treating it seriously.
Speaker 2 (29:09):
So.
Speaker 1 (29:10):
But different tools for different jobs. Okay, So for some assets,
the protection trust is the way to go my opinion.
For other assets, I'm gonna wait and see what happens
and then we do other trusts to protect those as well.
But at the end of the day, you're not wasting
all the deferred gratification, all the heartache, all the work
(29:34):
that you did isn't being flushed down the toilet because
these idiots don't know what the hell they're doing. Idiots
being a generic term for non attorneys. How about that? Anyway,
You've been listening to the David Carriers Show. I'm David Carrier,
your family's personal.
Speaker 3 (29:51):
David's perking and working and taking your calls. Now, this
is the David Carrier Show.
Speaker 1 (30:00):
Come back to the David Carrier Show on David Carrier,
your family's personal attorney. Here's the deal. Okay, I mean,
this is an email that I get. You know, it
goes out to other lawyers too, and to me, it
kind of illustrates the I probably shouldn't talk about this,
but what the hell? It illustrates what the problem is
(30:24):
that we've got here. Okay, let me just read it
to you. My wife and I would like to find
out the cost to prepare our wills. That's the lead. Okay,
that's the very first thing that they're concerned about. How
much does it cost? We currently do not have any
real estate or major assets at this moment. Well, that's interesting.
My wife is a remainder man on a life estate
(30:45):
for her mother's property. We have an artistic daughter who's
twenty years old, son who's eleven years old. Wife and
I are worried that we should both die our artistic daughter.
We need to be careful along with our son. Does
this mean that they don't have any life insurance? I mean,
talk about your responsible If that's true. We would like
to know the cost for a lawyer to structure our
wills so my sister would care for our kids and
(31:07):
also be compensated using the future funds for my wife
being sole remainderment on her mother's property. Currently valued at
around eight hundred thousand dollars. All right, so give it
a couple of years. It's a million dollars. So we're
talking about a million dollar estate here, and the repeated
issue is what does it cost? We also need to
(31:28):
give our kids some type of managed trust fund for
their needs. I don't know how any of this works,
so I would need any interested attorneys to reply with
an explanation and a quote. So here's here's what. Here's
the difficulty. Okay, if you want something that says trust
on it, go online. If you want something that says
(31:50):
will on it, it's easy to get. You know. If
you want to avoid probate, give everything to your kids
today or make them beneficiaries, do ladybird deeds or something
stupid like that, go ahead, knock yourself out right, and
when the question is how much does it cost? Then
(32:10):
you have to believe that what's actually getting done is
the second priority. Now I understand, believe me. I mean,
I started delivering freaking newspapers at seven to save up
for college because mom said that, you know, the eight
kids in the family, and you ain't going unless well
they're only what five kids at that time? But but
(32:32):
you know that's the that's the deal. Okay, you gotta
make it on your own. I mean I understand that.
You know, I understand needing to pay for stuff for
crying out out, okay, and I understand wanting value for
the dollar and all the rest of that stuff. But
the issue is value because I've got a currently eight
hundred thousand dollars estate, you know, in life estate, and
(32:53):
you're already on the deed apparently you know if this
is red right? And and how is it that they
don't have any term life They get eleven year old
kid and no term life insurance? What I mean, what
do you what are you even thinking about there? I mean,
the first thing you're gonna is put a million dollar
life insurance policy on these people, given I mean, they
just had a kid. They're probably not that old, so
(33:15):
I mean, but you need to prepare, you know, at
least a fifteen year policy to take care of that
eleven year old because eight hundred thousand dollars isn't gonna
do it, is not gonna do it. My point is, okay,
My point is that you know, I forget who said
something about talking about people who know the price of
(33:37):
everything and the value of nothing. Okay, when you focus
on price and you don't folk, why isn't the first thing?
What can we do here? You know, what is what
is it that's possible to be done? What are the
obstacles in the way? All right, So we got two people.
They got a twenty year old kid and an eleven
year old kid. You're gonna be treating them differently. One's
(34:00):
got more government benefits available to them. They should already
be on or closed to be on SoC security and
all the rest. They should have been doing things like
this already, and they should have enough life insurance so
that if they're not around and you know, they're focused
on it. Okay, that's good. Good to be focused on that, right,
(34:20):
But the emphasis should be on the It should be
on the planning, right, I mean, there's no way this
is going to cost twenty thousand dollars. But think about it.
What if it cost twenty thousand dollars to fix this
twenty thousand dollars. Oh my god, twenty thousand dollars. That's
a lot of money. Yeah, well, so's eight hundred thousand,
and so's the life of your artistic daughter, and so's
(34:42):
the young the life of your young son.
Speaker 2 (34:45):
Right.
Speaker 1 (34:47):
I'm not saying it would be I'm just saying, think
about this in proportion. Right, If it cost eighty thousand dollars,
eighty thousand dollars to plan this estate, they'd still be
ninety percent of the money for the kids, ninety percent.
Speaker 2 (35:06):
Right.
Speaker 1 (35:06):
If it costs twenty thousand, they'd be what what is
that ninety eight percent something like that. I don't know.
Maybe it's ninety seven and a half. I don't know,
but something like that. Yeah, ninety seven and a half.
Be ninety seven and a half percent of the value
of the estate is still there for the kids. Check
me if I'm wrong on that. I think I'm right. Yeah,
ninety seven and a half percent would still be there
(35:27):
for the kids. And it's like oh no, because the
trust would cost a you know, three thousand dollars or
thirty five hundred bucks, I don't know, some or I
can just do it out myself online for free. Well, okay,
all I'm suggesting is what I'm suggesting, what I've been
advocating for for decades now, is that the question isn't
(35:50):
how much does it cost? The question is what is
it you want to do? All right? And for so
many folks though, what I want to do is just
deliver a pile of money to my kids. And it's
like that ain't even going to work or or to
preserve it, you know, I just want to be in
control of my money while I'm alive. Perfect I have
(36:13):
no problem with that. I would like that, right, But
then there's this deliberate disregard for what is likely to
actually be the biggest expense of your life, which is
not your house. It's long term care, you know, I
mean it's it's eighteen twenty thousand bucks a month at someplace,
(36:35):
thirteen to five at the good places, you know, twelve
thousand dollars I've seen. You know, it goes as low
as that for skilled nurse and care. Right, all this
stuff is crazy expensive. It's more expensive than you know,
you can imagine, but you already paid for it, Like
you already paid for a pension through your Social Security,
(36:56):
your taxes, right, you're already paid for it. For health
care through your through medicare, you already paid for that,
and you're already paid for long term care. You know,
but you have to jump through the government's hoops in
order to in order to get the benefit of what
you've already paid for, and you have to take it.
My suggestion is take it seriously. Right, They're not interested
(37:21):
in helping you out. That hasn't been my experience. When
I look around, I say, well, are they doing their best,
you know, to help middle cost people from going broke? No,
it's more like the opposite. Okay, so what are we
going to do about that? Well, that's why we do
these workshops, That's why we do the planning, That's why
we have AI experts, that's why we do all of
(37:43):
this stuff. Is so that the people who work, the
people who save, the people who defer gratification, the people
who raise their kids, the people who do all those
things don't wind up broke and discouraged at the end.
Of the day, right you can be secure. You can't
feel really good about everything you've done. It just takes
(38:04):
that last you know, drop the ball in the two
yard line. It ain't a touchdown. That's all I'm saying.
I've been listening to the David Carrier Show. I'm David Carrier,
your family's personal attorney.
Speaker 3 (38:24):
You've been listening to The David Carrier Show a lively
discussion addressing your questions and concerns, but not legal advice.
There is a big difference. So when making decisions that
affect your family, your property, or yourself, the best advice
is to seek good advice specific to your unique needs.
If you missed any of today's show, or would like
additional information about the law offices of David Carrier, please
(38:46):
visit Davidcarrier Law dot com.
Hello, and welcome to the David Carrier Show. I'm David Carrier,
your family's personal attorney, and you have found the place
where we talk about a state planning, elder law, real
estate and business law. So give us a call. Why
don't just six one six seven seven four twenty four
twenty four. That's sixty one six seven seven four twenty
four twenty four. We'll get your question, comment or concern
(00:23):
on the air. Or you can always go to the
website Davidcarrier Law dot com. And on the website David
Carrier Law, squish it all together Davidcarrier Law dot com.
You know, there's all kinds of great stuff on the website,
including our AI expert. It's the latest and greatest from
the world of artificial intelligence, because natural intelligence just just
(00:47):
stain't enough, you know what I'm saying. Anyway, if you
go there, you can ask it questions and it'll see
rather than click, click, click all around the website trying
to find stuff. And we put a lot of work
in to that, you know what I mean, a lot
of work into making that thing effective, useful. But who
wants to spend all day clicking around the website? Nobody uh.
(01:11):
And so we've got the AI expert. So if you
ask a questions, it'll go look for you, you know,
and you say, well, give me something specific or whatever.
Now it's not legal advice. It's not legal advice. You see,
the problem with the AI is sometimes they make stuff up.
They do. I mean, it's unbelievable they make stuff up.
But but as a first as a first go at it,
(01:35):
you know, as a hey, I was kind of wondering, right,
it can be very very very useful. And we are
working all the time, you know, to make it less, uh,
to make it hallucinate less, right, to make stuff up less.
And we've we've made some progress on it. I'm not
saying me personally, but the people that I work with,
you know, to uh, you know, to get it right. Obviously,
(01:59):
we want it to be accurate. But it's not a
it's not you know. I I've been at this for
a while now, you know, forty four years come January,
and uh, you know, people keep telling me, oh, lawyers
are going to be replaced, lawyers are going to be replaced. Well,
I haven't seen it yet. I haven't seen it yet.
I mean what I what I see is there's a
(02:20):
lot of bad lawyer in out there, let's be let's
be honest about it. I mean, it's like anything else.
Speaker 2 (02:26):
There are.
Speaker 1 (02:27):
But you see, here's the different here's the difference. Here's
the difference between bad lawyer in and bad some other stuff.
It's like doctrine. Lawyer in and doctrine, they're they're kind
of like the same. It's like, how do you know
they're any good? How do you know they're terrible? Well,
people die for lots of reasons, you know what I mean.
(02:48):
I mean, maybe there was maybe there really was nothing
they could do about it. Maybe your doctor's not an idiot,
you know, who didn't recognize the symptoms that you had
raised my hand and instead, oh, oh no one could
possibly diagnose that, you know, which is what everyone else
says to cover for him. But I mean it's the
same way with lawyers, right, I mean, you don't know,
(03:09):
you don't know. It's very difficult to know, right, It's
very difficult to know if you've got to go to
one or a bad one or somewhere in between. Very difficult.
It's not like a plumber, Okay, So like if you
have a plumber come out to your house and say hey,
my toilet ain't working. Fix it please, So we say please,
(03:31):
it's important. Well if you know, if you get a
flood of brown throughout your house, well you can be
pretty sure that wasn't a very good plumber, right, I mean,
if the water doesn't turn on and it comes out
looking you know, horrible whatever, pretty tough, Pretty easy to
(03:53):
say the plumber didn't do the righteous job. You know,
same way with an electrician. You know, if you're roofly
you had a bad roofer? Is that isn't that? You know,
if your car doesn't go, I guess your auto mechanic
wasn't what they ought to be, Okay. I mean there
are some things where you can you know, if it
tastes like you know, sawdust. Yeah, you're not a very
(04:15):
good cook, are you. And it's easy to tell with
with legal stuff. It's very difficult to tell with medical stuff.
Very difficult to tell even with accountant taxes and stuff.
It's like, you don't know, how do you How are
you supposed to evaluate that?
Speaker 2 (04:33):
Right?
Speaker 1 (04:33):
That's I'll just straight up with you. I mean, that's
that's the big that's the big challenge. Right. Let you
know you hear me say it, hear me saying, well,
I think most of the state plans fail. What does
that mean? Well, I can tell you very specifically that
it What it means is that if you have a
trust and your trust is not funded. In other words,
(04:54):
if nobody went through the process to make sure that
everything was actually in the trust, your trust isn't gonna work.
I don't care what else is true about the trust.
If your stuff is not in the trust, trust isn't
gonna work because it can't work, all right, it doesn't work.
It's just that's very. That's a very. That's that's the
(05:15):
that's the toilet overflowing after the plumber's done with it,
you know, and oh my god, you know get some
lysole in here.
Speaker 2 (05:23):
Right?
Speaker 1 (05:23):
Well, but but when are you gonna find out about that?
How do you How do you know that? You don't
know that, You don't know that till after you're gone,
and nobody nobody. It's not obvious, it doesn't smell, there's
no you know what I'm saying. Fortunately, Al from Grand
Rapids is rescue you from that EXE Jesus. So Al,
(05:44):
how can I help?
Speaker 2 (05:47):
Well? D you set up some stuff for us with
Protecting Trust and the legacy trusts and yeah, and the
question is regarding the poor O one K programs that
through work uh huh the uh. And the only reason
I bring it up is because there was a change
(06:07):
in who was administering that program. Is that okay, account
that is that account that is in my name or
is my account in the four O one K included
as part of the protection Trust?
Speaker 1 (06:25):
Well, it's not in the Protection Trust because with tax
advantaged ed assets like i ra's four oh one K
four oh three B thrift savings plan, what are the
other ones? Uh mipsters, you know, all these all these
taxi you know, railroad retirement, all these tax advantage plans
(06:46):
are individual to the beneficiary to you. Now, we can
move them from one spouse to the other. We've established
that through the Court of Appeal. We've established that we
can do that, you know when we need to in
long term care, and we can actually put them in
a trust. And your trusts were set up to do
(07:07):
this as beneficiary, so I can put them in a
trust when you die, okay to put them in the trust,
and then there are benefits to having them in the
trust at that point. Okay, so I don't use the
Protection Trust for anything, but for I don't use the
Protection Trust put it that way. For tax advantaged assets
(07:30):
like IRA four oh one K four three B through savings,
we don't use it for that. That's not the right
tool for that job. There's other stuff that we do
for that. For the iras. Okay, so the beneficiary on
the IRA, are you married?
Speaker 2 (07:47):
Al?
Speaker 3 (07:49):
Yeah?
Speaker 1 (07:51):
Okay, so.
Speaker 2 (07:54):
It's the look back period for long term care? Should
is that accountable asset towards that? And if it is,
why would we not have instead of being the owner
of the account, have the Protection Trust be the owner
of account within that bourah one.
Speaker 1 (08:14):
K Right, good question, and here's the answer. It is
accountable asset, right, it is. For sure, it's accountable asset.
Which is kind of weird because it's not really worth
the number that you see on your IRA. It's the
number that the balance that you see in an IRA
four one K four or three B all the rest
(08:35):
of those, unless it's a rough the number that you
see is not the number you get. You have to
reduce that by twelve fifteen twenty thirty forty percent, right
to find out how much it's actually worth. Because you
still have to pay the taxes on it. The problem,
the reason we don't put those assets into the trust
(08:56):
directly is because if we did that, we would try
the income tax right now and we would lose the
tax free compounding that you're getting right now by having
that stuff remain in the I R four one K
four or three B whatever it is. D safe explaining, Okay,
(09:16):
so that's why we don't do it. Now. That doesn't
mean that does not mean that we're writing it off,
or we're ignoring it, or we're sacrificing it, or we're
giving it away. We are not doing that. And when
we get back, because I'm down to like my last
minute or so here and you really need, we really
need to get the explanation, we're not giving up on
(09:39):
the retirement plan accounts. Okay, we're not doing that. I
went through I went through a whole bunch of I
had to cross the rubicon, you know, to uh to do.
I was grieved by every circuit court judge in Kent
County with the technique I'm going to tell you about.
(09:59):
And then next one. Now, it took three years three
one two three count of three years before the before
the Court of Appeals finally said, you know, there's nothing
the matter with this. What the hell are you guys
complaining about? You know, so there's a happy ending to
the story. But but it wasn't easy and it wasn't
comfortable in order to get this, to protect the IRA,
(10:23):
the four one K, the four three be all those
retirement The reason I rattle through that every time is
because if I don't, then someone says, oh, but I
have a thrift savings plan. So that's the work. I'm
a federal employee. It's like, yes, yes, it works. So
when we get back out, I will explain exactly how
we're going to protect everything you've earned. Okay, when the
(10:43):
time comes, fair enough.
Speaker 2 (10:46):
Thank you very much. I will hang up and wait
patient for your return.
Speaker 1 (10:52):
Okay, all right, we'll be right back. I'm David Carrier,
your family's personal attorney. Well, come back to the David
Carre your show. I'm David Carrier, your family's personal literorney. Now,
remember I'm gonna We were just talking with with Al
and his question was, hey, you guys did my trust.
But you know, I got a big chunky amount there
(11:14):
in my four oh one K, and you did not
put that in the protection trust what's going on with that?
I wanted to protect that and you didn't do it, okay,
so fair enough, you know. I mean, let me just
say that if this is to be done right, if
(11:37):
you do you're a state plan correctly, Okay, the chances
that you don't catch it all are almost one hundred percent,
all right, because if you do it the way then
just the customary, the traditional, the way everybody does it, okay,
then it's fairly straightforward. It's easy. It's oh yeah, yeah, yeah,
(12:01):
yah yeah, fine, no problem, okay when you're trying to
make sure that middle class people don't get screwed the
way they've been screwed routinely when it comes to this thing,
all right, we're trying to do something that's quite a
bit different than what most people are trying to do, okay,
and so it's it can be a little difficult, put
(12:26):
it that way, complex difficult, you know. And here's the problem.
Here's the problem. Right, if you understood how your car
actually worked, you'd never get in it, okay, with explosions
going on under the hood and the you know, oh
wait a second, you mean I've got all this electricity
stored up. If you've got electric car or whatever, Okay,
you'd never use it. The good news is you don't
(12:48):
have to know how it works for it to work.
It's like anything else. I mean, if you could, if
you could see all the electromagnetic radiation that's coursing through
your house right now, you go live in a tent. Okay,
So at some point you just don't have to worry.
You have to not worry about it. Now. That doesn't
mean that we don't explain it, because we do explain it, okay.
(13:11):
But the fact of the matter is that most people
kind of okay, how does it work? How does that work?
What does it do for me? And then they say
I don't want to I don't care how it works.
What does it do for me? Okay, Well, here's what
it does for you. So let's let's just accept that
there's a lot of stuff going on under the hood here. Okay,
can we do that? That's number one? Number two? What
(13:37):
will I not do to defend middle class families who
have worked and saved and deserve, in my opinion, deserve
because they've earned it, right, because they actually put the
time in, and they defer gratification They didn't spend their
money right away, they didn't borrow more money to go
(13:58):
on Cruisism whatever else. They worked and they saved and
they built, and they all those good things, you know
what I mean. So they would be okay, so their
kids would be okay. All right, what lengths will I
not go to? Well, I'm not gonna commit fraud. I'm
not gonna lie, I'm not gonna I'm not gonna cheat
or steal. I'm not gonna do any of that. Right,
but within the context, right within the legal framework, I'm
(14:22):
gonna keep looking for tools that I can use that
will benefit the middle client, the client, okay.
Speaker 2 (14:32):
Right.
Speaker 1 (14:33):
You know, back in the day when you know is
in the American independence, you think that's an important thing.
George Washington thought it was an important thing. You know
what George Washington and the Continental Army were willing to do.
They were willing to cross the Delaware River full of ice, right,
They were willing to on Christmas Eve and go after
the Hessians, the mercenaries that the British had hired, right
(14:57):
and kill them in their sleep, right eve. Oh, George Washington,
you horrible person, killing poor drunk Hessians who were celebrating
Christmas in their sleep. Yeah, well that's what we had
to do. And it was okay according to laws of
war to the extent there were any laws of war
back in the seventeen hundredths, you know, that was okay, Okay.
(15:18):
He was willing to push the envelope. He was willing
to do what it took, and so was the so
were the patriots who followed him and all the rest
of it. And that's kind of my ideal. It's like,
what would George Washington do if he had the tools
and he saw the objective? Would he do it? Or
would say I'm not going to do that because nobody
else did it before. It's like, George Washington wouldn't do that.
(15:41):
George Washington would charge on. Okay, So am I George Washington?
Well no, not really. And you know, yes, I'm being
glorious and self regrandizing and all the right. Sure I am, okay, fine,
But here's the deal with the eye. So how do
I bring this back to the IRA. The answer is
the answer is we used to. So you or your
(16:03):
spouse needs long term Let's say let's say it's Al
and his wife now needs long term care Okay, now
we gotta we gotta or he needs long term care.
He needs long term care, put it that way. And
he's got this honkin' IRA four one K at his
job because why because he's a hard worker, because he
cares about his family, because he wants to be secure,
(16:23):
because he's not all the rest of this stuff. Okay,
he wants all that, but now he's got the dementia,
early onset dementia, he's got als, he's got you know,
he's got whatever it at, Parkinson's MS. Horrible stuff happened
to him, and now he needs care, right, but he
doesn't get care. Why doesn't he get care? Well, because
he's got a pension. Maybe because he's got this big
(16:46):
honkin four A one k, right and it's in his name.
So what do we do about that? Well, the answer
is there's nothing to do about that because he's got
the that's his pension. And he doesn't qualify because he's
got too much income. Oh no, terrible.
Speaker 2 (17:02):
Uh.
Speaker 1 (17:02):
And he doesn't qualify because he's got all this four
oh one K money, Oh no, terrible, come back and
spend it all down, right. This is the answer. This
is the real answer. There's the answer that the customary answer,
the traditional answer, the answer that everybody does. Most people do. Okay,
it's like, okay, I'm gonna spend it all down and
(17:24):
when it's all gone then you know. Oh and by
the way, the spouse who's been hanging on here, too
bad for you. I guess you're gonna be greeting, you know,
greet the Christmas shoppers at the you know, at the Walmart,
you know or wherever. All right, not if there's anything
wrong with greeting people, but still it's not what you
(17:44):
wanted your wife to be doing, you know, because that's
not why you save the four oh one k I
don't think right, you want to be secure and all
the rest. Okay, So what we used to do, and
I'm talking more than ten years ago, what we used
to do routinely was cash in the IRA. It was like,
too bad, so sad with the pension. Nothing we can
do about that. Uh, And we'll cash in the IRA. Yes,
(18:08):
we'll pay the tax on it, but we'll transfer the
balance over to the spouse. We'll annuitize that and you know,
at least we get to keep or we do the
spousal Benefit trust for that and we'll keep, We'll keep
what's left. Okay, sixty percent of something is better one
hundred percent and nothing. So but it wasn't a good solution.
(18:29):
I didn't like it, you know, I mean, George Washington
didn't like cornwallis hanging out either. Okay, you don't like hesitians,
you know, cluttering up the landscape. You don't like that.
And so you got to figure, you know, what can
you do? What can you do? Okay, So that that's
the question, right, what can you do? And the answer
(18:54):
which wasn't my answer. I was talking with a buddy
of mine years ago and he said, well, why don't
you do an action? What's called an action for separate maintenance. Now,
an action for separate maintenance is not a divorce. It's
not a divorce, not a divorce. I have people, you know,
when we're talking about this, we have everybody repeat at
least three times, it's not a divorce, because it's not
(19:14):
a divorce, and you shouldn't get divorced. And I don't
want you to get divorced. And now that music means
I got to get out of here. But when I
come back, I'll explain how the rest. But remember, no divorces,
not in this time of year. Anyway. You've been listening
to the David Carriers Show. I'm David Carrier, your family's
personal attorney.
Speaker 3 (19:33):
David's got the how too you're looking for. Just call
seven seven four. This is the David Carrier Show.
Speaker 1 (19:42):
Be double ls. Seeing you thought rappers were the first
ones to spell out where it's anyway, Welcome back to
the I think about that I'm doing here. Welcome back
to the David Carrier Show. I'm David Carrier, your family's
personal attorney. What we're talking about from a caller who's
(20:05):
also a client, and he's wondering, well, wait a second,
why didn't you put my four oh one k in
my protection trust? I said, well, your protection trust is
for your house, your cottage, your you know, your taxable
investment account, your CDs, blah blah blah. We're going to
get take those off the table using that technique. Okay,
(20:26):
we've done one hundreds of millions by now, anyway. Uh yeah,
So we're going to take those assets off the table
that way, one family at a time, one middle class
family at a time. But after you know, forty four
years of doing this, thirty five thirty six years almost
uh in my own name. It adds up anyway. The
point is what about the four oh one k? I
(20:49):
can't put the four oh one k in the trust?
Why not? I can't do it because that would trigger
the income tax? Do you want me to trigger the
income tax on your IRA? I didn't think so four
one K four three B through SIGNIFA. No, you don't
want me to trigger the income tax on that. I
don't want to trigger the income tax on that. It's terrible, awful, bad, terrible,
rotten and horrible. And the fact that your kids do
(21:10):
it as soon as you reach room temperature is abomination.
And there's ways to fix that too. But the point
is I'm not going to do it to you. But
but it is accountable asset. So historically the way this
evolved was what do we do with the IRA? I
don't know, cash it in? I guess because there's no
other way to save any of it. So we cash
(21:32):
it in, pay the huge taxes on it. Terrible, hate it,
but what else are you gonna do? And then a
buddy of mine suggested, well, why don't you do a
in action for separate maintenance? They allow those guys from
New York. He's they allow those in Michigan, don't they.
And I'm like, well, I don't know whether what is that?
It's a it's a way too, it's property settlement. It's
(21:56):
a property settlement. Part of divorce without a divorce. You're
not getting divorced. You're married. Okay, so we don't stop that.
You are married, not a divorce. But and since the
Supreme Court sendra Dale O'Connor, god Rest her soul, made
it very clear that the state has no interest in
(22:18):
figuring out what the content of your marriage is. Okay,
that's not a place. Once you're married, it's up to you, guys,
to decide what that means to you. This mystical magical thing.
Read for the great poetry of it. Read some of
those decisions. And what's his name? It was a Kennedy
at Anthony Kennedy who also contributed to that genre. Anyway,
(22:39):
the point is that we're not getting divorced. There is
no divorce here. So my client, you know, our caller,
Al calls in. He said, hey, how come you're not protected?
My four one k that's where most of the money is.
And for an awful lot of families that the guy's
IRA is where the money is is. Plus the guy
(23:00):
has a pension, right, and the woman who was raising
the kids, et cetera, et cetera, has a smaller IRA
or none doesn't have a pension. That is a very
typical situation because then when the guy gets the dementia,
the Parkinson's, the Alzheimer's, the whatever it is, right now,
she's she's out in the cold, right because the pension
(23:20):
was his pension which is now going to a nursing home.
It was his IRA, I know, and that was supposed
to be years years of support in addition of Social
Security supposed to be years of support that they work
together to build up all the Yeah you get all that, okay,
but now it's got to all go away. Well no,
it doesn't all got to go away. And that's what
(23:41):
the action for separate maintenances. So it's about, I don't know,
it's like eight or nine years ago we first started
doing this, and we had immediate success with it, right
The courts were like, yeah, fine, there's no problem with this,
and different counties and all the rest of it were
moving the iras over from the spouse who needs long
term care to the what we call the institutionalized spouse,
(24:03):
the one who needs care to the community spouse, the
one who's living in the community. Right, you could do that.
You can move the pension, you can move the IRA.
It was fine until until one of the judges in
Kent County and you can look it up, said well,
wait a second, no, no, this is not right. You
can't do this. This is an end run around the law. Well,
(24:26):
the last time I checked, like the forward pass and
n run is a valid play. But they didn't like it,
and so every apparently every circuit court judge grieved one
of my attorneys who was working in the firm, and
not hard to figure out where that was directed, even
though my name didn't appear, thank god, you know. Anyway,
(24:51):
the long story short is they thought it was horrible, terrible,
no good, very bad to move the pension, to move
the IRA one K four or three B from one
party to even though other counties had no problem with it.
And not only were they saying no, it's wrong legally
like you're a bad person for having done this, and
(25:12):
so we want your license serious and so you know.
So it went on for about three years where pending
at the court of Appeals And finally the Court of
Appeals came out and said they can't see what the
problem here is. What are you guys complaining about? This
is perfectly aokay, that was several years ago, and since then,
(25:32):
I mean before that, we've done dozens and now we've
done hundreds of these where with the IRA? All right,
So this is the answer to Alic's question, why didn't
you put the four O one k in the trust?
Because if I did, I'd have triggered the income tax.
Oh so I'm just gonna sacrifice my IRA. No, we're
not doing that. When the time comes, not now, we
(25:54):
don't have to now. When the time comes, we're going
to go to court and we're going to do it
what we call an action for separate maintenance, and we're
gonna move your IRA four oh one K, four oh
three B four fifty seven. I don't know thirst savings plan.
We're gonna move it from you over to your spouse.
We're not sacrificing an we're not giving it away. Right,
(26:16):
We're gonna move it right with no tax consequence, over
to your spouse. And we're gonna do the same with
your pension. So you got a pension. You say, yeah,
but my wife gets my pension when I'm dead. Yeah,
I know, but this part of the pension right now,
we're moving over to her as part of this action
for separate maintenance with a qualified domestic relations order marital quadro.
(26:38):
Somebody's calling it. I don't care what you call it.
We've been doing it for years now, it's now it's
the hot thing.
Speaker 2 (26:43):
Oooh.
Speaker 1 (26:44):
You know, maybe you should have trademarked it or something.
I don't know, but anyway, the idea is, we've we're
doing this. It works every time you do it, but
we're not done yet. We're not done yet because forty
fifty percent of the time, at least forty percent of
the time, the caregiver's spouse dies first. So what do
we do now? I moved the pension over to the spouse.
(27:06):
I moved the IRA four or one K over to
the spouse. Well, what happens if they die first, which
happens at least forty percent of the time. Now what, Oh,
I just I lose it. No, I don't want to
lose it. So there's another trust that we do. I know,
I know, I'm piling on the trust. But the fact
of the matter is that if you do this stuff correctly, right,
(27:30):
it doesn't matter who needs the long term care first.
I can adjust. Okay, some of the stuff is solid, right,
the tax paid stuff, the house, the cottage, the hunting property,
the farm, the whatever it is that's solid, that's locked
the way. We don't have to worry about it. Okay,
off the table. We're starting on at least second base. Okay,
(27:52):
but now I don't. But I still have to make
it home. So I don't want to lose the IRA
four or one K four or three B. This is
what I'm going I'm going to move it to your spouse. Okay.
Now you say, well, wait a second, I don't have
a spouse. I say, well, okay, then I can save
about half of it. I can only save half. I'm sorry,
I can't do better than that. But for a married couple,
I can save the whole the whole thing. I'm not
(28:14):
going to be paying any exorbitant taxes whatever, because I
move it over to the spouse, who can have an
unlimited amount of income. An unlimited amount of income, right,
you can't, but the spouse can. And so now we're
gonna start taking those required minimum distributions through an annuity. Right,
we're going to innuitize it over their life expectancy. What
(28:35):
does that do? What it does? What it does is
it protects your spouse. I'm not giving this stuff away.
I'm not losing to taxes. I'm not just willingly throw
my hands up in the air. Oh nothing I can do. No,
We're going to preserve what you have earned to provide
the security, right, the certainty, the security that again that
(28:57):
you've been working for all these years. All right, we're
not giving up on that. We're not giving that away.
We're not pretending that there isn't value to it. No,
we're not doing any of that. We're treating it seriously.
Speaker 2 (29:09):
So.
Speaker 1 (29:10):
But different tools for different jobs. Okay, So for some assets,
the protection trust is the way to go my opinion.
For other assets, I'm gonna wait and see what happens
and then we do other trusts to protect those as well.
But at the end of the day, you're not wasting
all the deferred gratification, all the heartache, all the work
(29:34):
that you did isn't being flushed down the toilet because
these idiots don't know what the hell they're doing. Idiots
being a generic term for non attorneys. How about that? Anyway,
You've been listening to the David Carriers Show. I'm David Carrier,
your family's personal.
Speaker 3 (29:51):
David's perking and working and taking your calls. Now, this
is the David Carrier Show.
Speaker 1 (30:00):
Come back to the David Carrier Show on David Carrier,
your family's personal attorney. Here's the deal. Okay, I mean,
this is an email that I get. You know, it
goes out to other lawyers too, and to me, it
kind of illustrates the I probably shouldn't talk about this,
but what the hell? It illustrates what the problem is
(30:24):
that we've got here. Okay, let me just read it
to you. My wife and I would like to find
out the cost to prepare our wills. That's the lead. Okay,
that's the very first thing that they're concerned about. How
much does it cost? We currently do not have any
real estate or major assets at this moment. Well, that's interesting.
My wife is a remainder man on a life estate
(30:45):
for her mother's property. We have an artistic daughter who's
twenty years old, son who's eleven years old. Wife and
I are worried that we should both die our artistic daughter.
We need to be careful along with our son. Does
this mean that they don't have any life insurance? I mean,
talk about your responsible If that's true. We would like
to know the cost for a lawyer to structure our
wills so my sister would care for our kids and
(31:07):
also be compensated using the future funds for my wife
being sole remainderment on her mother's property. Currently valued at
around eight hundred thousand dollars. All right, so give it
a couple of years. It's a million dollars. So we're
talking about a million dollar estate here, and the repeated
issue is what does it cost? We also need to
(31:28):
give our kids some type of managed trust fund for
their needs. I don't know how any of this works,
so I would need any interested attorneys to reply with
an explanation and a quote. So here's here's what. Here's
the difficulty. Okay, if you want something that says trust
on it, go online. If you want something that says
(31:50):
will on it, it's easy to get. You know. If
you want to avoid probate, give everything to your kids
today or make them beneficiaries, do ladybird deeds or something
stupid like that, go ahead, knock yourself out right, and
when the question is how much does it cost? Then
(32:10):
you have to believe that what's actually getting done is
the second priority. Now I understand, believe me. I mean,
I started delivering freaking newspapers at seven to save up
for college because mom said that, you know, the eight
kids in the family, and you ain't going unless well
they're only what five kids at that time? But but
(32:32):
you know that's the that's the deal. Okay, you gotta
make it on your own. I mean I understand that.
You know, I understand needing to pay for stuff for
crying out out, okay, and I understand wanting value for
the dollar and all the rest of that stuff. But
the issue is value because I've got a currently eight
hundred thousand dollars estate, you know, in life estate, and
(32:53):
you're already on the deed apparently you know if this
is red right? And and how is it that they
don't have any term life They get eleven year old
kid and no term life insurance? What I mean, what
do you what are you even thinking about there? I mean,
the first thing you're gonna is put a million dollar
life insurance policy on these people, given I mean, they
just had a kid. They're probably not that old, so
(33:15):
I mean, but you need to prepare, you know, at
least a fifteen year policy to take care of that
eleven year old because eight hundred thousand dollars isn't gonna
do it, is not gonna do it. My point is, okay,
My point is that you know, I forget who said
something about talking about people who know the price of
(33:37):
everything and the value of nothing. Okay, when you focus
on price and you don't folk, why isn't the first thing?
What can we do here? You know, what is what
is it that's possible to be done? What are the
obstacles in the way? All right, So we got two people.
They got a twenty year old kid and an eleven
year old kid. You're gonna be treating them differently. One's
(34:00):
got more government benefits available to them. They should already
be on or closed to be on SoC security and
all the rest. They should have been doing things like
this already, and they should have enough life insurance so
that if they're not around and you know, they're focused
on it. Okay, that's good. Good to be focused on that, right,
(34:20):
But the emphasis should be on the It should be
on the planning, right, I mean, there's no way this
is going to cost twenty thousand dollars. But think about it.
What if it cost twenty thousand dollars to fix this
twenty thousand dollars. Oh my god, twenty thousand dollars. That's
a lot of money. Yeah, well, so's eight hundred thousand,
and so's the life of your artistic daughter, and so's
(34:42):
the young the life of your young son.
Speaker 2 (34:45):
Right.
Speaker 1 (34:47):
I'm not saying it would be I'm just saying, think
about this in proportion. Right, If it cost eighty thousand dollars,
eighty thousand dollars to plan this estate, they'd still be
ninety percent of the money for the kids, ninety percent.
Speaker 2 (35:06):
Right.
Speaker 1 (35:06):
If it costs twenty thousand, they'd be what what is
that ninety eight percent something like that. I don't know.
Maybe it's ninety seven and a half. I don't know,
but something like that. Yeah, ninety seven and a half.
Be ninety seven and a half percent of the value
of the estate is still there for the kids. Check
me if I'm wrong on that. I think I'm right. Yeah,
ninety seven and a half percent would still be there
(35:27):
for the kids. And it's like oh no, because the
trust would cost a you know, three thousand dollars or
thirty five hundred bucks, I don't know, some or I
can just do it out myself online for free. Well, okay,
all I'm suggesting is what I'm suggesting, what I've been
advocating for for decades now, is that the question isn't
(35:50):
how much does it cost? The question is what is
it you want to do? All right? And for so
many folks though, what I want to do is just
deliver a pile of money to my kids. And it's
like that ain't even going to work or or to
preserve it, you know, I just want to be in
control of my money while I'm alive. Perfect I have
(36:13):
no problem with that. I would like that, right, But
then there's this deliberate disregard for what is likely to
actually be the biggest expense of your life, which is
not your house. It's long term care, you know, I
mean it's it's eighteen twenty thousand bucks a month at someplace,
(36:35):
thirteen to five at the good places, you know, twelve
thousand dollars I've seen. You know, it goes as low
as that for skilled nurse and care. Right, all this
stuff is crazy expensive. It's more expensive than you know,
you can imagine, but you already paid for it, Like
you already paid for a pension through your Social Security,
(36:56):
your taxes, right, you're already paid for it. For health
care through your through medicare, you already paid for that,
and you're already paid for long term care. You know,
but you have to jump through the government's hoops in
order to in order to get the benefit of what
you've already paid for, and you have to take it.
My suggestion is take it seriously. Right, They're not interested
(37:21):
in helping you out. That hasn't been my experience. When
I look around, I say, well, are they doing their best,
you know, to help middle cost people from going broke? No,
it's more like the opposite. Okay, so what are we
going to do about that? Well, that's why we do
these workshops, That's why we do the planning, That's why
we have AI experts, that's why we do all of
(37:43):
this stuff. Is so that the people who work, the
people who save, the people who defer gratification, the people
who raise their kids, the people who do all those
things don't wind up broke and discouraged at the end.
Of the day, right you can be secure. You can't
feel really good about everything you've done. It just takes
(38:04):
that last you know, drop the ball in the two
yard line. It ain't a touchdown. That's all I'm saying.
I've been listening to the David Carrier Show. I'm David Carrier,
your family's personal attorney.
Speaker 3 (38:24):
You've been listening to The David Carrier Show a lively
discussion addressing your questions and concerns, but not legal advice.
There is a big difference. So when making decisions that
affect your family, your property, or yourself, the best advice
is to seek good advice specific to your unique needs.
If you missed any of today's show, or would like
additional information about the law offices of David Carrier, please
(38:46):
visit Davidcarrier Law dot com.
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