The Laws of your Money with Ann-Margaret Episode 12

Episode Transcript

Speaker 1 (00:00):
The following is a paid podcast. iHeartRadio's hosting of this
podcast constitutes neither an endorsement of the products offered or
the ideas expressed. 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

(00:20):
tips to help you protect your money. Here's your host
and Margaret Caroza.

Speaker 2 (00:26):
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
that there's nothing more important than protecting yourself legally, because

(00:48):
what does it matter how diligently or brilliantly I save
and invest If there is a greater than forty percent
chance of losing acid sets to a long term illness,
an expensive divorce taxes, this could be a state taxes,
capital gains taxes, not to mention ordinary lawsuits. You know,

(01:14):
we know we're living in a very litigious gotcha society,
But do you know that you are more likely to
be involved in a legal battle with a former loved
one than with a stranger. I believe we all have
potential legal landminds in our lives, whether we're in a

(01:37):
second marriage, concerned about blended family warfare later, are we
concerned about an elderly relative losing their home to a
nursing home. Do we have a special needs child that
requires special planning, or someone in our lives who spends

(01:57):
money like a drunken sale and they're asking us for
yet another loan. I am asset protection attorney and Margaret Carosa,
joined today by my esteemed colleague and co host Paul
slatkis Welcome to the program, Paul, Thank you an. So

(02:19):
last week we talked about something that surprised some people,
and that has to do with an adult child's potential
responsibility for their parents' nursing home claims.

Speaker 3 (02:36):
Now, there are.

Speaker 2 (02:36):
About thirteen states in the United States that have laws
on the books holding an adult child legally responsible for
their parents' nursing home claims. New York, where I practice,
is not one of these states. So the laws on

(02:56):
the books in New York do not hold me legally
responsible for my mother's future nursing home claims. However, we
can unwittingly contractually undertake that obligation, and I see that
happen when we're bringing apparent to a rehab facility following

(03:21):
a hospitalization, and the rehab slash nursing home gives the
adult child a bunch of papers to sign, Right, we
need to be very careful about what we sign, and
one good piece of advice is that anything you do
sign should be as power of attorney, so you're not

(03:47):
signing in your individual name such that you could potentially
be sued for the cost of the nursing home, which
is no joke. It's like sixteen thousand dollars a month.
So I think that this situation should allow adult children

(04:09):
to ask their parents, what are your plans for long
term care?

Speaker 4 (04:16):
Do you write that on an agreement when you sign
something as power of attorney?

Speaker 2 (04:21):
So let's say I am your power of attorney. And
that's not.

Speaker 3 (04:25):
Just a throwaway phrase.

Speaker 2 (04:28):
You must actually do a document saying in the event
that you can't act or sign something, you're appointing another
person to do it. So if I sign my name
and Margaret Carosa period, now I'm on the hook for
your nursing home claims. Right If, however, I sign and

(04:49):
Margaret Carosa comma as power of attorney for Paul slatkis
now I'm not on the hook. Yeah, So we definitely
we want to have these intergenerational conversations because we can
be affected by another generation's legal liability. So I think

(05:11):
it makes some sense to ask parents, do you have
a trust in place to protect the property from future
possible nursing home claims as well as to avoid probate
later so that I don't have to wait nine months
ten months before I can sell the property and split
it with my siblings. Ok.

Speaker 3 (05:33):
Okay.

Speaker 2 (05:34):
Next Friday is Valentine's Day, and we said we're going
to do a special segment on today's show for Valentine's Day.

Speaker 3 (05:46):
And you know by now, Paul, that I am.

Speaker 2 (05:49):
A cheapskate, and I'm encouraging everyone else to join me
in being a cheap skate. The average amount of money
projected to be spent per person for Valentine's Day this
year is two hundred dollars. Okay, And why am I

(06:11):
talking about, you know, spending money in an asset protection show. Well,
we want to protect our assets from legal liabilities, from
long term care costs, from taxes, but we also want
to protect our assets from our own over spending. We

(06:32):
want to take a critical look at what we're spending.
So what do you think some typical Valentine's Day gifts are?

Speaker 4 (06:42):
Well, I'm a practical but.

Speaker 2 (06:44):
What do you think the typical gifts are?

Speaker 4 (06:49):
Chocolate and the flowers?

Speaker 3 (06:51):
Flowers?

Speaker 2 (06:52):
Flowers, chocolate. You could bring the chocolate into work what
you don't need. I think chocolate has some more value.
I questioned. The flowers, you know, because the prices skyrocket
for flowers this time of year, and I don't know
how do other people feel? Do we even want the flowers?

(07:14):
Join the conversation by calling eight hundred three to one
zero seven to ten. So I think you know the flowers.
It depends on what the flowers are. A couple of
years ago, I woke up.

Speaker 3 (07:30):
On Valentine's Day.

Speaker 2 (07:31):
I thought I'd go put the coffee on, and on
the kitchen counter were flowers.

Speaker 3 (07:39):
No card.

Speaker 2 (07:41):
They were not the best looking flowers. They were in
this like supermarket cellophane and like it was mixed flowers.
It wasn't roses, So I thought, Okay, at least he
saved a few bucks by not buying roses. But the
really horrible multi colored where a carnation looks like it

(08:03):
was spray painted light blue.

Speaker 3 (08:05):
You know, okay?

Speaker 2 (08:06):
So I thought, you know what, Anne, be nice, be gracious,
don't look a gift.

Speaker 3 (08:12):
Horse in the mouth. What can I do to make.

Speaker 2 (08:15):
These horrible flowers look better? So I unpacked the celephane,
I cut them down, I threw the blue carnation in
the garbage, put them in a lovely vase, and put
them on the dining room table. Bill comes down to
get his coffee, and I was proud of myself. I
very graciously thanked him for the beautiful flowers, and he

(08:39):
grumbled a you're welcome as he went to get his coffee.
And what do I hear now but my teenage son
Billy screaming, did anyone see flowers on the counter? He
bought the flowers to give to a class mate. Cool.

Speaker 3 (09:00):
Now, it was my bad for.

Speaker 2 (09:01):
Assuming they were for me. But I think Bill was
in a little hot water for saying you're welcome when
I thanked him for the flowers. So bottom line is,
no one wants mediocre looking flowers. And I think that
is the last time any flowers were exchanged in my house.

(09:24):
What do I plan to do or give to Bill
this Valentine's Day? I want to do something very practical,
and I want to keep the cost under thirty dollars.

Speaker 3 (09:40):
That's just the goal that I have in my mind.

Speaker 2 (09:43):
And do you know what I'm thinking about doing? And
you tell me, Paul, how this would go over if
this is the gift that Ivy gave to you. So
I'm planning on going into Bill's closet and looking at
his shoes and find a a pair that looks really
bad and taking them to a shoemaker to be resold

(10:08):
and polished and maybe new shoelaces put in and a
totally rehabbed pair of shoes. I think that is practical,
but it shows a little thoughtfulness and it's keeping a
few dollars in the community for the shoemaker being.

Speaker 4 (10:28):
Growing up in the shoe business my dad Terry shoeshop
tarry Town, So thousands.

Speaker 3 (10:34):
Of shoes, you're not going to get it done.

Speaker 4 (10:36):
You're not going to get it done for no, no, no, no,
you need a shoemaker. You're not going to get it done.
I don't think for thirty.

Speaker 3 (10:41):
Unless I come to you.

Speaker 4 (10:43):
No, I don't fix shoes. I sell shoes, but I
sold shoes. But the concept of what you're talking about,
I think is really a good concept because because I
mean shoes, of course, are very personal. A new I
have to talk shoe talk to put a new sole
on a shoe is more than likely not a controversial concern.

(11:05):
It's just a good thing. And a good polish is
a good thing, and a new pair of laces is
a good thing. So I think you've picked something that's
not going to be something that he's loved my hole
in my shoes, leather shoes. So I think it's a
good present. I think it's a great present.

Speaker 2 (11:23):
What do you plan to give Ivy?

Speaker 4 (11:27):
Well, I saw some sweatshirt that she loves sweatshirts, and
I saw a nice pink one which she likes. Pick
And in fact I just wrote her and said go
up and look at that sweatshirt. I had mentioned it
to her already, So okay, that's a thing, and it
was reasonable and practical.

Speaker 2 (11:45):
So that's that's what we want. Reasonable, practical, but shows
concern for the people that we love. Do you know
that in the coming week a lot a lot of
people are going to get engaged. Valentine's Day is a

(12:06):
huge day for people to get engaged.

Speaker 4 (12:09):
You mention that before, Yeah, I'm a Minister, I should
be working this week.

Speaker 2 (12:15):
So when we're dealing with engaged people, I think there's
no cohort of the population that is more legally vulnerable. Okay,
you have just committed to each other to spend the
rest of your lives together. You love each other beyond belief,

(12:39):
and you're about to embark on an amazing future. But
under the law, you are legal strangers to each other.
If my fiance is in the hospital and cannot speak
for himself, I have absolutely no legal rights to do so.

(13:04):
So my advice for all newly engaged couples congratulations, But
you want to protect each other, go onto my website
my Asset Protection Attorney dot com. Download a healthcare proxy
so that you can make healthcare decisions for each other.

(13:28):
You may also want to grant each other financial durable
power of attorney so that if you're sharing a household
while you're engaged and someone is unexpectedly laid up, that
you can access funds for.

Speaker 3 (13:46):
The running of the household.

Speaker 2 (13:51):
Now, what do you think my biggest advice to an
engaged couple would be when it comes to legal documents,
A prenup A prenup.

Speaker 4 (14:06):
Ashlely someone asked me a question about that that somebody
that was concerned about a person's own daughter, how can
he get his daughter to sign and do a prenup.

Speaker 2 (14:17):
Well, obviously, I think all of us should have a prenup.

Speaker 3 (14:23):
You know.

Speaker 2 (14:23):
Can I get my adult child to do a prenup? No,
because they're legally an adult and they can do whatever
they want to do. But as a parent, what I
can do is make sure that my estate planning, make

(14:44):
sure that my will, my trust say that the assets
upon my death go to my three children, Mary, Susie
and Johnny quote as their separate property, not to be
commingled with a spouse or partner. Okay, so that's one

(15:06):
thing I can do to keep family assets somewhat segregated
from assets that are going to be combined with for
all intents and purposes. From my perspective a stranger. We
could also condition the inheritance on the child having a prenup.

(15:29):
That's much stronger, But depending upon your situation, if you
have strong concerns about your child's fiance or even spouse,
you can say within the trust everything goes to my
beneficiaries on the condition that they take legal steps to

(15:55):
keep assets separate from what they may choose to commingle
with a spouse or partner. Now they say that there's
a fifty percent divorce rate, I think the percentage is
closer to forty, but that's still a very significant number.

Speaker 3 (16:15):
And when we look at.

Speaker 2 (16:17):
Protecting ourselves from foreseeable risks and liabilities, we are not
very likely as a country to have a prenup or
to have a post nuptial agreement. This prenup is going
to protect the parties from being financially devastated in the event.

Speaker 3 (16:42):
Of a split.

Speaker 2 (16:44):
And there's no couple that needs to think about this
more than those embarking upon a second or a third marriage,
because the divorce statistics for second and subsequent marriages are
greater than sixty percent, and we're dealing with a time

(17:06):
where I am less likely to have a lot of
years left in the workforce to recover financially from being devastated.
We also want to look at the prenup to protect
a family business. I have seen hard working clients who

(17:28):
build up a small business only to lose part of
it in the event that an adult child divorces. I
had one case that I talk about in Love and
money where the family owned food shop. I don't want

(17:50):
to specify what kind of food because people might know
who this is. And the son in law worked there,
had no prenup. They ended up divorcing, and in the
context of the divorce, he was able to order a

(18:11):
top to bottom business appraisal, and this put the family
in a very, very awkward situation because let's just say
that not all of the employees in the business were
a quote unquote on the books, and not all of
the sales made their way onto the tax returns. So

(18:37):
this guy had the family over a barrel and they
ended up having to heavily mortgage the business real estate
to make him go away. So any folks out there
that have a business, I urge you, within the corporate

(18:58):
governance documents, whether that's an S corp, an LLC and LLP,
you want to require all of the participants to have
marital protections to keep a forensic valuation potentially devastating forensic

(19:21):
valuation at bay. And it's very easy for us to
put this in the corporate governance documents. This way, our
adult children don't take responsibility for it. Within their relationship,
they can simply say listen, it was a requirement of

(19:42):
the business that we have this prenup. And going back
to the second marriage, we know that spouses have legal
responsibility for each other's long term care claims. So should
I not want to do a prenup if I'm getting

(20:02):
into a second marriage which says that we will each
be responsible for our own long term care claims? And
then I'm not potentially losing my home, which I ostensibly
want to go to my adult children from the first

(20:23):
marriage if that's where they grew up. This prenuptial agreement
can definitely protect the parties.

Speaker 3 (20:32):
Does that make sense?

Speaker 4 (20:33):
Yeah, it makes sense, and it's a lot of a
lot of wisdom here can I say I was going
to ask you the question I may get back to
the corporate How about if you have partners? You know
a lot of people have partners in business and they
have family members and business. You should be writing something.

Speaker 2 (20:50):
Up to absolutely absolutely you want to. You know, it's
like a game of chess. What can go wrong here?
What can happen here? You have a partner and a business.
You love this partner like a brother, But what happens
when that partner dies? Do you have insurance policies in

(21:11):
place with which to buy out, you know, the widow
of your partner in the event that he or she dies.
So we want to give some thought to what would
happen when the next generation replaces your partner, so that
they don't force you to sell that ru Yeah, so

(21:33):
let's talk a little bit. We've mentioned prenuptial agreements a
whole lot on the program, we haven't talked so much
about post nuptial agreements. Do you know what that is, Paul. So,
if a prenuptial agreement is what we do before a marriage,

(21:55):
a post nuptial agreement is something we do during the marriage.

Speaker 4 (22:02):
Wow.

Speaker 2 (22:02):
And typically we do this at a time of marital
crisis where the marriage may be hanging by a thread.
And in the book Love and Money, I tell the
true story about a couple and he was unfaithful and

(22:29):
this was not the first time that this happened, and
she had it. She decided that they were definitely going
to get divorced, but she wanted to wait until the
youngest child was done with high school. You know, this
is not an uncommon situation where we mentally make the

(22:53):
decision to be out of our marriage, but we postpone
the actual divorce, so in this post nuptial agreement that
he was willing to sign.

Speaker 3 (23:07):
Because you know, he was crestfallen.

Speaker 2 (23:09):
He really did want the marriage to continue. So they
signed a post nuptial agreement, and in the post nup
it stated that in the event of infidelity that the
aggrieved party would get sixty percent of the assets when

(23:31):
the ultimate divorce occurred. They ended up after the postnup
reconciling and they went to couple's therapy and things were
terrific and wonderful, and he asked her, as his sixtieth
birthday approached, what do you think was on his bucket list.

Speaker 4 (23:56):
To take that post and rip it up.

Speaker 2 (23:59):
No, it was on his bucket list, paul, I don't
want to shock you so early in the morning.

Speaker 3 (24:06):
He wanted a threesome. Okay, oh that so she.

Speaker 2 (24:12):
Agreed, and far from being an unwilling participant, she and
the other woman ended up falling in love and they
ended up getting divorced. But because that was not infidelity,
he knew about it. He brought the woman into the relationship.

(24:35):
The only instance of infidelity was his infidelity, so she
ended up getting sixty percent of the assets.

Speaker 3 (24:44):
You know, these.

Speaker 2 (24:44):
Things unexpected twists and turns. But do you know, Paul,
that Bill and I have a post nuptial agreement.

Speaker 3 (24:55):
Now we are happily married.

Speaker 2 (24:58):
I don't think he's going to be happy that I
shared the story about the supermarket flowers today, but we
are happily married. But give me, given what I do
for a living, I think about the very real possibility
if I die before Bill. I believe he will be

(25:20):
remarried inside of six months.

Speaker 3 (25:22):
That's just the way that it is, okay.

Speaker 2 (25:26):
And I believe that this new woman is going to
be angling to get her name on the assets from
day one. So in our post nup, it simply says
that either party, whoever is the surviving partner, agrees to

(25:49):
enter into a pre nuptial agreement prior to any future
marriage with the purpose of keeping joy flatly accumulated assets
separate for the benefit of our children. So let him

(26:11):
share what he makes later on with this new person.
But anything that we've accumulated together, I would like that
to go to the children.

Speaker 3 (26:21):
So you can customize it.

Speaker 2 (26:23):
You can say, you know, at least seventy percent of
the assets will go to the children. But do you
know we can also protect against a new special friend
within a trust. So if I put the house in
the trust, I can say that the beneficiaries, which initially

(26:45):
are going to be the kids, that the beneficiaries can
be changed, but only between and amongst our lineal descendants
and trusts for their benefit. I want to with trust
retain the ability to change the beneficiaries. I may become

(27:06):
estranged from someone, or a beneficiary may develop a problem,
a psychiatric issue, a substance abuse issue. Whatever the situation is,
I may want to revisit whether they receive anything, and
beyond that, how they receive it.

Speaker 3 (27:27):
Are my three children.

Speaker 2 (27:29):
Equally able to manage assets? Or do I want one
of them to have some protections? If I know that
my son spends money like a drunken salor, and his
wife lives in Bloomingdale's and she's spending all of the money,
maybe I want his interest in my estate to go

(27:51):
to him gradually. Right, he gets five percent a year
for twenty years. So we want to give some thought
to all of these issues so that we can customize it.
No family is exactly like another family, so why should
the estate planning be the exact same.

Speaker 3 (28:15):
I think that is.

Speaker 2 (28:17):
A disservice to our loved ones. It's very easy to
put some thought into it and to craft some special protections.

Speaker 4 (28:29):
So can we talk next week about how to present
a pre nup conversation?

Speaker 3 (28:37):
Oh, that's good. That's good. We can do some role.

Speaker 4 (28:40):
Playing and still and still get married.

Speaker 2 (28:46):
I want to thank everyone for joining us today. Paul,
thank you for being here today. I hope you'll join
us next week ten thirty right here on wo or
seven ten.

Speaker 3 (28:58):
And during the week you.

Speaker 2 (28:59):
Can reach out to me at my lawyer an on
Instagram or my Asset Protection Attorney dot com. Take care,
everyone enjoyed the day.

Speaker 1 (29:23):
The preceding program was sponsored by New York Priority Medical Care.
The preceding was a paid podcast. iHeartRadio's hosting of this
podcast constitutes neither an endorsement of the products offered or
the ideas expressed.