The Laws of your Money with Ann-Margaret Episode 2

Episode Transcript

Speaker 1 (00:00):
The following program is sponsored by New York Priority Medical Care.
Now it's time for the Laws of Your Money, a
weekly call in show with legal tips to help you
protect your money. Here's your host and Margaret Caroza.

Speaker 2 (00:17):
Hello and welcome to the Laws of your Money. This
is a show dedicated to protecting you from legal and
financial mayhem when it comes to personal finance. I think
there's nothing more important than protecting yourself legally, because what

(00:38):
does it matter how diligently I save and invest if
there's a greater than forty percent chance of losing assets
to a long term illness and expensive breakup taxes or
ordinary lawsuits. I believe we all have legal land money

(01:00):
in our lives. Are you concerned about an elderly relative
losing a home to a nursing home. Are you in
a second marriage thinking about the possibility of blended family warfare?
Later on, do we have a special needs child or
someone in our lives Paul who spends money like a

(01:22):
drunken sailor? Or are you estranged from a family member
and we're looking.

Speaker 3 (01:29):
To avoid a will war?

Speaker 2 (01:31):
Later on, I am asset protection attorney and Margaret Carosa
joined today again by my good friend Paul slatkis welcome
back to the program.

Speaker 4 (01:42):
Paul, Thank Sam.

Speaker 2 (01:43):
It is Paul's job to throw something at me if
I get into a legal ease, which I try not
to do. Okay, these issues literally affect everyone.

Speaker 3 (01:56):
I yet to meet a person without these ish shoes
in their lives.

Speaker 2 (02:02):
So our discussion last time was about the importance of
a trust to protect real estate. And before we go
into a little recap of that, I want to invite
listeners to join our discussion. The call in number at

(02:23):
seven ten WR is one eight hundred three to one
zero seven ten.

Speaker 3 (02:32):
So last time.

Speaker 2 (02:34):
We talked about a trust for the house. Do you
know that sixty five percent of people own their own homes,
whether that is a traditional house, a condo, a co op,
and we want to protect the real estate from from

(02:56):
several things, from ordinary liability. I think you know we
are living in a very litigious society. You know, the
theories of legal liability are are really baffling. Last time
I shared the story about the guy who swam with

(03:18):
the killer sharks and SeaWorld and big surprise, he died
and then the family sued SeaWorld for wrongful death. I
shared the story with you, Paul a couple of weeks
ago about the guy who begged his office colleagues not

(03:40):
to throw him a birthday party in the office. You know,
those miserable little affairs with the stale supermarket cake and people,
you know, during the middle of the day, without the
benefit of a few cocktails, having to sing happy birthday
to the person. So this guy was so adamant about

(04:03):
not wanting this party, and of course, what did his
colleagues do.

Speaker 4 (04:07):
Threw them the party.

Speaker 2 (04:08):
They threw him the party. Okay, So instead of just
suffering through it like we all do at these miserable
little office birthday parties, he nearly had a panic attack
because it turned out he didn't like people paying attention
to him.

Speaker 3 (04:24):
You know, he was a great worker.

Speaker 2 (04:27):
He liked to just be in the background, and this
little birthday party really pushed him over the edge. So
he spent the rest of the workday in his car
in the parking lot. And now his colleague started, you know,
snickering a little bit at him, and this was the
beginning of the end. He ended up parting company with

(04:50):
his employer, and he sued the company and he won
four hundred and fifty thousand dollars. Oh my okay, So
this is what we want to protect ourselves from. And
I think real estate is the easiest thing for us
to protect, whether it's an LLP, an LLC andes corporation.

(05:15):
My go to structure is a trust, and when I
work with people on trusts and real estate, I'm often
asked questions about getting into investment real estate. So I
think it's critically important when someone asks me how do

(05:38):
I get into real estate? I want to be a
real estate investor. I would say Number one is you
need to save up a little money. You need a
little investment capital. And for most of us, that means
stop buying ridiculous stuff, right and start saving up some money.

(06:00):
And when you have a little capital to invest, what's
the next thing that we should do?

Speaker 3 (06:06):
What do you think we need?

Speaker 4 (06:07):
Research what you're doing.

Speaker 2 (06:09):
Do some research and enlist the help of experts. And
I hope that I would be considered a resource when
we talk about how to protect this new investment from liabilities.
But we want a real estate attorney in the mix.

(06:31):
We want a real estate broker in the mix. And
we've invited onto the program an expert in both of
those areas.

Speaker 3 (06:45):
He is a thirty year plus.

Speaker 2 (06:48):
Real estate transaction expert who is also a real estate broker,
and he is super familiar with the real estate landscape.
He is a wealth of information and I am thrilled
to welcome to the program my colleague, someone that I

(07:11):
trust to refer clients to. Lewis Riggio. Lewis, welcome to
the program. Thanks so much for being with us.

Speaker 5 (07:21):
Thank you man, Margaret. That was such a nice inso
you appreciate it.

Speaker 3 (07:25):
No, it is totally true, you know.

Speaker 2 (07:27):
Listen, I happen to know I would say more about
real estate than the average person. I do a little
investment real estate in my own life, but it would
never cross my mind to get involved with transactions before
consulting someone like you, So I make sure that I

(07:52):
am totally protected. So I'm going to, if it's okay
with you, Lewis, pose a couple of questions that I'm
hearing a lot lately from my clients, from friends, from
family members.

Speaker 3 (08:07):
Does that work?

Speaker 5 (08:08):
Sure? Okay? Absolutely? Ready?

Speaker 3 (08:10):
All right?

Speaker 2 (08:11):
So what do you tell people who are kind of
sitting on the sidelines. They they want to buy something,
but they don't know what's going on with investment with
interest rates?

Speaker 3 (08:25):
Rather, what is the FED.

Speaker 2 (08:26):
Going to do? When is the optimal time to jump in?
What's going on with commercial real estate?

Speaker 3 (08:34):
Now?

Speaker 2 (08:34):
You know, what do you tell your clients who are
sitting on the sidelines waiting to jump in?

Speaker 5 (08:42):
Right? Well, first, you know, look, we can all make
an educated guest about all of these variables, right, but
no one has a crystal wall, and that's the That's
the important thing to remember. Predicting such things is very difficult.
My recommendation, I think would be, for example, people who
are waiting for more Mortgan's rates to drop, I think

(09:07):
it would be better to find a home or an
apartment that fits exactly what you're looking for and and
move ahead with that transaction rather than waiting for all
of these variables to fit your exact situation. I think
you know, people who wait for the rates to drop,
they often wind up in in either some kind of

(09:29):
bidding war over that have an unnaturally inflated price because
of this this new demand because of the rates dropped.
So my recommendation and those kinds of situations, look, now,
find the home or apartment that's that's right for you,

(09:51):
make the transaction. You can always refinance at a lower
rate down the road, and I think that's probably a
better approach.

Speaker 2 (10:01):
Absolutely, that makes a ton of sense. So I would
imagine that in your work as a broker you sometimes
have to be a little bit of a diplomat. And
what I mean by that, I'm thinking of all of
the folks, myself included.

Speaker 3 (10:18):
I love these cable shows.

Speaker 2 (10:20):
You know, the DIY and they can really make magic
happen in what looks like the span of a half hour.
And people are really biting off do it yourself projects
before putting a home on the market. And you know,

(10:42):
I'm thinking, for example, about something like a hot tub
that maybe fifteen years ago that was going to help
your sale price, but these days, I think people look
at a hot tub and it's just this ick factor, right.

Speaker 3 (10:58):
I don't want to go into a hot.

Speaker 2 (10:59):
Tub where you know, the last people who owned the
house were spending a lot of time in without their clothes,
just totally gross. You know, are there any DIY projects
that you think people can do on their own and
are there some things that you would just tell them,

(11:21):
you know, leave it to a professional.

Speaker 5 (11:24):
Right, So this is a little bit of a tricky
question because the d d YI projects are are very personal,
So I think you'd want a professional in looking at
the space, taking a look, giving advice on what may
or may not add value, because a lot of times

(11:46):
what happens is people do this before and listening a poker.
They do something that they think is going to enhance
the value of the property, but in retrospect it might
not be so appealing to a new buyer or buyers
that are coming into looks. So I think a better
way to approach it might be to have a broker
come in discuss the project ahead of time, get an

(12:07):
independent opinion on that, because the worst case scenario is
you go ahead with a doing yourself project and really
you're not adding any value to the property and you've
just lost whatever all of the time, effort and expense
you input into that is pretty much out the window.

Speaker 2 (12:27):
And that's something that you would be able to do
for someone correct.

Speaker 5 (12:34):
I joined the team at Cork at the Courtroom group.
It's the Lawrence Shire teams. These people are experts, they're
they're the number one team in the office that that
we joined. The professional their FUM the more important. They're
very experienced they have have many answers to these questions.

(12:54):
They give good advice and again that that knowledge is
based on year and years of experience and in real time.

Speaker 3 (13:04):
Yeah.

Speaker 2 (13:04):
So, I mean, let's say I'm interested in selling, you know,
my triplex co op in Midtown, and I invite you
in to kind of walk through it and give me
your opinion as to what the listing price should be.
What do you say to me, Lewis, If you enter

(13:27):
the apartment and there is like char Truth's green shag
carpeting and stucco ceilings, you know, which was the cat's
meow in nineteen seventy four, what do you tell me?
Do you say, let's get someone in?

Speaker 3 (13:44):
What do you say?

Speaker 5 (13:46):
Yeah, I say, these things are very personal, okay, And
by the way, being a broker, you know, it's so
much more than just like opening doors and walking people
through a space.

Speaker 3 (14:00):
Well it should be right.

Speaker 5 (14:02):
Right exactly, and for a stellar you know, it can
be a very stressful, emotional roller coaster. Look, let's face it,
these things that you just mentioned, they might be very
personal to the to these people. So to your point,
you have to be careful how you address this. I
think that as a broker it's part of your job too,

(14:25):
you know, give current opinions on what you think may
or may not be appealing to others. We have companies
that pay the photograph market discuss price. It's it's it's
a service that's again based in experience. It's current. We

(14:48):
know what what the current fire market wants and say
it in a way that may not be offensive to
the person with the shad.

Speaker 3 (14:56):
Carpet right right.

Speaker 2 (14:58):
Listen, you know you you have the connections, you have
the professional resources, the contact so it's a little bit
of a one stop shopping when folks are working with you.

Speaker 5 (15:12):
How that's exactly right?

Speaker 2 (15:13):
Yeah, not cousin Fred. You want to call Lewis Raggio.
Where can they reach you Lewis.

Speaker 5 (15:20):
So they can reach me at Lewis dot Raggio at
the Corcorandgroup dot com. That would be the best way
to contact me by email. Our team is ready to work.
You will get a prompt response in every scenario and

(15:41):
that's the best way to do it.

Speaker 2 (15:42):
Awesome, Lewis, thank you so much for your time today,
and I hope that you will come back on the
program again.

Speaker 3 (15:50):
We have a lot more questions.

Speaker 5 (15:53):
I really appreciate this and Margaret, thank you so much.

Speaker 3 (15:55):
Take care bybbye.

Speaker 2 (15:59):
Okay, so let's go back to our discussion from last week.
We talked about putting one's primary residents vacation property shares
of an s corporation that owns a multifamily property. Whatever

(16:21):
your real estate is, you want to protect it from liabilities,
and under current federal law, the real.

Speaker 3 (16:35):
Estate must be out of.

Speaker 2 (16:38):
Your name for a minimum period of five years before
it's totally invisible to healthcare claims. Now, some people who
are familiar with this area of the law recall that
this so called look back period.

Speaker 3 (16:56):
Used to be three years.

Speaker 2 (16:58):
Now it's five years. There's a bill in Congress that
would make it seven years, but thankfully that hasn't passed yet,
and people who do their planning under the current law
will be grandfathered into this so called five year lookback period.
So we do a properly drafted trust. We put the

(17:24):
real estate into the trust, we continue to live there,
we can continue to collect any rental income, and at
the end of the five years, the party continues for
my lifetime benefit. But I have the comfort of knowing
that that underlying asset is invisible in the event that

(17:47):
I require long term care. So people sixty five and
over have Medicare and you have a Medicare supplement that
you're being INUNDA did right now with commercials to change
your Medicare supper before December seventh. They were programmed and

(18:09):
Medicare and the supplement do a terrific job when we're hospitalized.
But when we leave a hospital, where do we go today.

Speaker 4 (18:19):
Long term care?

Speaker 3 (18:19):
We go to rehab.

Speaker 2 (18:21):
Because they say the hospitals today get us out quicker
and sicker, and we're in no shape to come home.
So we go staggering into a rehab where your Medicare
and your Medicare supplement will cover up to So those
are magic words because you're not even guaranteed that you're

(18:42):
going to get one hundred days, but you're guaranteed that
you're not going to get more than one hundred.

Speaker 3 (18:47):
Days of coverage. So it's important.

Speaker 2 (18:50):
For us to say that the house is invisible so
that they can't put a lean on the property if
we need need help.

Speaker 3 (19:01):
That costs in our area.

Speaker 2 (19:03):
If you're listening to this broadcast in the Tri State area,
we have some of the best rehab facilities in the
United States, but they're also the most expensive there. It's
like sixteen thousand dollars a month. So if we want
to avoid anyone putting a lean on the property, we
wanted to go into a trust, why not just put

(19:28):
the real estate in the names of the kids. That
would be a huge mistake. My kids might be the
nicest people in the United States and they would never,
you know, turn me out of the house. But if
I bought the property for fifty thousand dollars in nineteen
seventy eight and it's now worth eight hundred and fifty

(19:51):
thousand dollars, which are not uncommon numbers in our area,
I would be giving the kids a huge capital gains problem.
They would take my property with what we call a
cost basis equal to Mom's original purchase price way back

(20:13):
in nineteen seventy eight. When if it goes to the
kids at my death from a trust, they get all
of the taxes eliminated. They get zero capital gains taxes.
So it's super important for taxes. It's important for my
property taxes. If I put my house into the kids' names,

(20:37):
what happens to my star property tax exemption?

Speaker 3 (20:41):
Lose it?

Speaker 2 (20:42):
My husband's partial veterans exemption out the window. And now
if the house is in my son's name and he's
about to go through a divorce, this is a nightmare.
My soon to be ex daughter in law would have
an interest in the property. Not to mention, if I

(21:02):
have grandchildren applying for college financial aid, my son would
have to disclose his ownership interest in the house as
an asset. And I am literally, you know, depriving a
grandchild of college financial aid. So you know, you want

(21:23):
to be very careful, you want to think about this,
And sometimes I hear people say we want to keep
things simple. We don't want to get involved in you know,
thinking about a trust and educating ourselves about a trust.
But often keeping things simple on the front end can

(21:43):
result in a big catastrophe later on. You know, we
said that it's a very litigious society. What people don't
realize is that you are more likely to be involved
in a court battle with a former loved one than
with a stranger. You know, we're coming up to Thanksgiving

(22:05):
and you know where sometimes we have some arguments around
the Thanksgiving table, especially given its proximity to election day,
and we want to protect ourselves from liabilities which could
be again former loved one.

Speaker 4 (22:24):
I have quite some bunch of questions, actually I've been
asked from me to ask you. One of them is
one of my children needs more financial help. How can
I plan for this?

Speaker 2 (22:35):
Ye listen, If you have three kids and you tell
me that they're all perfectly situated and equally situated financially,
I would be very skeptical.

Speaker 3 (22:49):
Right, you have.

Speaker 2 (22:50):
Three people, you have three very very different situations. So
you know, my job is just to give people things
to think about. If I have three children, even if
let's say I have a son who's a neurosurgeon and
he's wildly successful, and he tells me, Mom, I don't

(23:12):
need anything, give everything, you.

Speaker 3 (23:14):
Know to my two sisters who could use the money.

Speaker 2 (23:18):
At the end of the day, these documents are our
last form of communication to our children, and we want to,
I think, avoid a situation where it looks like I'm
giving someone less. So I would say, if I want

(23:40):
to give more money to my daughter because she needs help,
maybe I go to the bank and open up a CD,
and that daughter is the named beneficiary on that CD.
But my trust and my will say everything is split
one third, one third, one third, that would be a

(24:01):
graceful way of giving some more to my daughter without anyone,
you know, reading into the unequal treatment within the last document.
But the bigger question is why does she need more help?
Has she simply had a lot of bad luck picking

(24:25):
a few of the wrong husbands and she's in a
financial quandary that you say, you know what she can
get out of this, and she's on the right track
right now financially and in terms of decision making. But
if she is really a financial black hole, if whatever

(24:45):
you give her is not enough, and I'm reminded of
a doctor phil quote that money alone does not solve
money problems. So if someone is a financial train, giving
them a bunch of money is only going to relieve

(25:06):
that situation for a little while direct larger Yeah, well, listen,
they're going to be broke again in no time flat.
So maybe I say that Susie gets one third of
the estate, but she gets it over the course of
say twenty years, right, she gets five percent a year

(25:28):
for twenty years. And now I know that I've given
her a little bit of a safety net if I
know in my heart that she has not saved one
cent toward her own retirement. So, you know, we want
to be creative when we have a little bit. I'm

(25:49):
gonna euphemistically say complexity within our families. You know, read
that to mean dysfunction. Who amongst us, Paul doesn't have
some dysfunction in our families?

Speaker 3 (26:02):
I every family, somebody I know, I certainly do. Moving
right along.

Speaker 2 (26:07):
So we want to, you know, really be a little sensitive.
What are the potential fault lines later on? Now, what
if Susie is living in my home and the estate
leaves everything three ways and her brother and sister say, hey,
you need to make.

Speaker 3 (26:27):
Other arrangements pronto. We want to sell the house.

Speaker 2 (26:32):
So if you have a child living in your home,
it is very important to deal with that within the
estate plan. I don't have to let them stay there
for their entire lives, but that is certainly one possibility.
So I might say that the property goes to marry

(26:54):
Susie and Johnny, subject to Susie's continued right to occupy
the property for a period of x fill in the blank.
That might be six months, it might be a year,
it might be three years. Let's say Susie's kids are

(27:16):
in high school and I don't want them disrupted. And
we say, in three years, the youngest will have graduated
from high school, so I say that she can live
there for a period of not to exceed three years.
So you want to build in protections to keep our
loved ones from doing battle with each other later. You know,

(27:38):
it's often when we leave something unclear within the estate
plan that folks are doing battle later.

Speaker 4 (27:47):
What app you don't have? Here's another question. What app
you don't have a family and you're a single person.
Does a single person make a trust?

Speaker 3 (27:55):
Yeah?

Speaker 2 (27:55):
I would encourage anyone who is single, and you know,
to my women friends out there, I think, regardless of
our current marital status, we have an eighty percent chance
of being the surviving spouse. So I tell women that

(28:16):
we need to plan for ourselves as if we will
be single, because statistically speaking, one day we will be single.
I have children, I think there's a one hundred percent
chance that they're going to.

Speaker 3 (28:32):
Be too busy with their own lives.

Speaker 2 (28:34):
You know, to really be involved in my long term
care planning.

Speaker 3 (28:40):
So I would encourage folks.

Speaker 2 (28:42):
Go on to my website and that's my asset protection
attorney dot com. There's an article there that I thought
was so cleverly titled when I wrote it as State
Planning and the Single Girl, and it really talks about
what we want to put in place to ensure that

(29:06):
our future is the way we want it to look.
And in terms of planning for the future, I think
you know, as an interfaith minister, one of the greatest
human fears is.

Speaker 3 (29:20):
The fear of aging.

Speaker 2 (29:22):
And if we can do some things on our own
inform ourselves, then it's going to be a lot less
scary looking to the future.

Speaker 3 (29:33):
Okay, So with that we are wrapping up.

Speaker 2 (29:35):
Reach out to me during the week on Instagram, at
my lawyer and or through the website my Asset Protection
Attorney dot com and I hope you'll join us again
on seven ten wor next Sunday at ten thirty.

Speaker 3 (29:51):
Thanks for being with us, Paul, Okay, thank you.

Speaker 4 (29:53):
Anne, and thank everybody for welcome listener. Mamma Sa