August 28, 2024 • 15 mins
This week, Todd Lutsky explains how flexible irrevocable trusts can be and why they might be perfect for your estate planning needs. Todd takes calls from listeners about their personal retirement plans.
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Episode Transcript
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Speaker 1 (00:01):
This is Ask Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Todd Letsky is here to answer your
questions and help you plan for a later life. Ask
Todd is presented by Cushing and Dolan, serving Massachusetts and
New England for more than thirty five years, helping families
with a state and tax planning, medicaid planning, and probate law.
(00:22):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (00:28):
As promise, We're now joined by Todd Lutsky from the
law firm of Cushing and Dolan. We call the segment
Asked Todd because it's your chance to ask Todd your
estate planning questions. Studio line is open at eight eight
eight two zero five two two six three. Last week,
I know we left one person hanging. So if if
you happen to be listening that one person, hey callin
(00:51):
early today just to make sure that you get your
question answered. If you're not that person, colin early as well,
because hey, early bird gets the call with Todd Lutsky
eight eight to zero five two two six three. That
number again is eight eight eight two zero five two
two six three. Mister Lutsky, how are you today?
Speaker 3 (01:11):
I am doing wonderful and you I'm good.
Speaker 2 (01:13):
Did you see the news that Oasis is coming back
with a reunion tour?
Speaker 3 (01:17):
No? I haven't they are. I've been singing.
Speaker 2 (01:19):
Wonderwall at work all day today. Uh yeah, everyone asked
me to stop. Good, I said, maybe. In any case, Todd,
I want to talk to you a little bit about
irrevocable trust and specifically, let's say that you're someone who
has one of these Medicaid irvocable trusts. Yeah, say that
you put your home inside of it? Yes, five years,
(01:41):
ten years, twenty years later, you say, hey, you know
what we want to move? Can that be facilitated with
a home inside an irvocable trust?
Speaker 3 (01:50):
Quick answers yes. And that's the good news.
Speaker 4 (01:54):
And now we'll talk a little bit about the details
of what is involved and accomplish that. And the good
news again is that it's pretty much the same amount
of paperwork, the same amount of effort, the same amount
of taxation as would be the case if it wasn't
in the trust. So let's begin. It's in the trust.
(02:14):
Who's the trustee? Oh, it's a kid? So do I
need the kid's permission to sell it. How do I
tell the kid to sell it? Well, you just simply
do that. You tell the child we're selling the property,
and they're the trustee. So they're going to sign the offer,
the p and s, the deed work. They're going to
do all the paperwork. Now they're going to have no liability,
but they are going to have all the paperwork to sign.
(02:37):
Oh but if the kid says no, you know, I
always wanted to inherit that cap property, So no, we're
not we're not selling. Well, you get to keep the
power to remove and replace the trustee anytime you want.
So you will begin by removing the trustee and then
putting someone else on of your choosing, not yourself. And
of course you will then have other bad things that
(02:58):
will happen to that child. You'll inform them of that later. Okay,
so now I'm selling it. But what about the taxation?
Where's all the money go? All the money all goes
into the trust because the trust sold it, So the
trust gets the money. What about the capital gains tax? Well,
these trusts are grant or trusts for income tax purposes,
so that means you get to keep the taxable event
(03:21):
is as if it's reported on your personal return. So
important what you're keeping is your capital gains exclusion on
the sale of your primary residence. So if you're married
and you have this joint irrevocable trust, the first five
hundred thousand dollars of capital gains is exempt. So that
(03:42):
keeps your tax liability down, or it keeps it the
same as it would be had you not sold it
through the trust and then you didn't ask this, Chuck,
But I'm going to give it as a bonus. Sure,
you can then take the money and use it to
buy another house so you can downsize and move to
any state you want with out restarting the clock for
(04:03):
Medicaid eligibility. I mean, if you're listening, you're pretty much
just saying, can't I do all that stuff today?
Speaker 5 (04:11):
Yeah?
Speaker 3 (04:12):
Pretty much.
Speaker 4 (04:14):
So a lot of flexibility built into these trust, folks,
lots of flexibility.
Speaker 2 (04:18):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. If you've got a question that you want
to ask Todd about your estate plans, still have a
little bit of room on the phone lines here at
eight eight eight two zero five two two six three.
That number again is eight eight eight two zero five
two two six three. We are going to take a
quick break right now, but when we come back, we're
(04:38):
gonna get right to your questions with Todd. So again,
still a little bit of room on the phone lines
at eight eight eight two zero five two two six three.
Quick break here and then it's right to your questions
with Todd. That number one more time is eight eight
eight two zero five two two sixty three.
Speaker 1 (04:56):
Ask Todd with Todd Lutsky every Wednesday at ten thirty
only here on the Financial Exchange Radio Network. You're listening
to Ask Todd with Todd Lutsky on the Financial Exchange
Radio Network.
Speaker 2 (05:15):
All right, time we get right to your calls with
Todd Lutsky. First up, we got Mark in Plymouth. Mark,
you're on with Todd Lutsky.
Speaker 6 (05:22):
Hi, good morning everybody. So twenty years ago I did
a trust for our family. Everything has changed quite a bit,
but we're considering moving to Florida and making that legal
residence because of the no estate taxes and no sale,
no income Texas.
Speaker 3 (05:39):
Yeah, do I need to.
Speaker 6 (05:40):
Buy to do a new trust and stuff down in Florida.
Speaker 4 (05:45):
So the type of trust that you did twenty years ago.
I'm assuming was a revocable trust or irrevocable.
Speaker 3 (05:50):
It was revocable, right, and you're gonna and.
Speaker 4 (05:52):
That's still an okay type of plan for you twenty
years later.
Speaker 6 (05:57):
I think so. Yeah, so I'm seventy years old now, Okay,
kids are grown up now.
Speaker 3 (06:04):
Yeahs changed, but a bit so amazing.
Speaker 4 (06:07):
My point is that that as you've gotten older, you
have enough assets. You're not worried about nursing home planning,
so you're comfortable. And that's partly why you're moving. Because
there's a state tax here. The four million dollars or more,
you can stay and we can pay no state tax
in Massachusetts. But if you're married, but if you have
more than that, you're right moving. Moving makes sense. So
I'm assuming that's where you're at, somewhere above that, yes,
(06:30):
And so if that's the case and you have a
nice revocable trust, doesn't mean that twenty years ago that
the documents are no good. They still are. They still
will work for you, So that should be just fine.
So you should be able to move, keep your trust,
which is your heavy lifting document. Don't have to refund
everything you don't have to retitle your your properties. You
don't have to retitle your bank accounts, your brokerage accounts.
(06:52):
I assume they're already titled in your revocable trust. So
all that is great. What I would do, though, is
if you're moving, check two things. One, when you get there,
you do probably want to update your basic documents, the
healthcare proxy, the power of attorney, the will, just to
make them state specific, not only because you should, but
(07:13):
also it's going to help you show your intent to
be a Florida resident. I mean, it's not as easy
as you think. I did a seminar recently called so
you think you changed your residency, you can imagine why
I say that. Right, So, when you leave Massachusetts, do
you plan on keeping real estate in Massachusetts? Yeah, so
(07:36):
any real estate you keep in Massachusetts should be not
should be must be owned in a LLC. If you
don't own it in an LLC, even if you're successful
and you've changed your residency, Massachusetts taxes non residents on
in state real estate as a percentage of the whole.
(08:00):
So if you've got a million dollar property on the
Cape and you're worth five million dollars in total, then
they will take one million as the numerator, five million
as the denominator, come up with your twenty percent, and
then take that percentage and multiply it by the tax
on five million dollars. So you still will be taxed
(08:22):
in mass. But if you convert it to an intangible,
which would be stock in an LLC, Massachusetts cannot tax
in tangibles on non residents, so you need to at
least get that set up in mass. Otherwise, just change
the basic documents, make sure you spend six months in
(08:43):
a day there among a laundry list of other things,
so mass doesn't think that you haven't changed your residency.
Speaker 3 (08:51):
So hope that helps a little folks.
Speaker 4 (08:53):
But there is a lot to think about when you're
changing your residency. That's just a few of them. And
quite frankly, there's a lot to think about when you're
doing your estate plan. Like here I asked, you know,
twenty years the trust is still good, But I'm twenty
years older. If my assets haven't kept up with me,
maybe I do need nursing home planning. And I have
(09:15):
a lot of people who switch from revocable to irrevocable
twenty years later. If you're one of those people, and
you've never done an irrevocable medicaid trust. Get this month's guide.
We're right near the end of the month, folks. It's
going to go away. It's unlocking the power of medicaid
trust in a question and answer format. It's gonna help
you understand the dos and don'ts for you while you're living,
(09:37):
plus explains all the tax ramifications that go with it.
I think you will find that you have way more
control than you ever thought. But if you don't know
if it's right for you, after you read this guide,
you will know eight six six eight four eight five
six nine nine or Legal Exchange Show dot com again
(09:57):
eight six six eight eight eight five six or Legal
Exchange Show dot Com.
Speaker 2 (10:04):
Todd, I've got another one all queued up for you.
Speaker 1 (10:06):
Here.
Speaker 2 (10:06):
Let's go to John in Providence. John, what's your question
for Todd Lunsky?
Speaker 5 (10:11):
I hate Todd the question for you. I've got a
daughter who just is a freshman in college. I'm a
divorced man. I have a main house and a very
very small house in a main house in Rhode Island,
a small house in mass I'm under the impression that
if I did a trust now, which I've not done anything,
(10:34):
and I'm saying, by way I was sixty five and
a half years old, that would affect her financial aid
in a big way, because you know, all of that
equity from my houses would be taken into her financial aid.
Is there a way for me to do a trust
with like an interviewara sister or something like that that
would pass it on to my daughter after she graduated
(10:56):
if something happened to me or something like that.
Speaker 4 (10:58):
Now, I don't know if you're asking two questions now.
Are you saying, do you want to trust that you
think is going to shelter for financial aid now or
if you die, shelter for financial aid now now?
Speaker 5 (11:11):
Because I think would change your financial aid picture in
a big way.
Speaker 3 (11:15):
I don't think so.
Speaker 4 (11:16):
I think when if she's your daughter and you own
those properties right now, they're affecting her financial aid exactly
the same as they would be if you put them
into any kind of a trust that I can think of.
So I don't understand how how that would make a difference.
Right now you own the property. So when you apply
for financial aid, which I'm no expert on for sure,
(11:37):
I think they ask you for all your assets, right.
Speaker 5 (11:41):
Yeah, so they do ask there is your dependent a
beneficiary of any trust? And I think they look at
that type of asset differently. They take a different percentage.
I believe.
Speaker 4 (11:53):
No, if she's a beneficiary of the trust, then they're
going to say that's hers as well. I think, so
you can have a set up so that they don't
own it when she when you die, perhaps there might
be a way of doing it. But again, I'm just
not an expert on the medicaid. I mean, I'm not
an expert on the on the financial side of things
for these things. So my feeling is I don't have
(12:16):
a trust answer for you on that one. So I
hope it helps a little.
Speaker 2 (12:21):
Todd, We've got another call here for you. Let's go
to Diane in Worcester. Diane, you're on with Todd. What's
your question?
Speaker 7 (12:30):
Hi Todd, Hello, thank you for take this. Thank you
for taking my call. I'm seventy four years old and
eleven years ago my husband and I did a we
did an irrevocable trust. Okay, my husband passed away and
I ended up by selling the house. Okay, yeah, I
(12:50):
ended up by paying an awful lot of money in
capital gains. But instead of selling the house, I did
put the money in and the irvoke trust checking account.
And then when I purchased another home, I purchased the condo.
I purchased it with the funds that were in the
(13:11):
irrevocable trust account. Yep, now that was done. You know.
I just did that like almost a year ago.
Speaker 3 (13:18):
Now better hurry though, get to the question.
Speaker 7 (13:21):
Okay, the trust was done eleven years ago. Should I
be looking at having that looked at again?
Speaker 3 (13:28):
Okay?
Speaker 4 (13:29):
So a couple of things here. One, you certainly can
have it looked at again. It doesn't mean that the
trust is bad just because it's eleven years old. So
that's the good news first and foremost. But you certainly
welcome to have it looked at to see if you
think there's a change. I'm a little concerned. You probably
didn't ask this, but quite frankly, I don't know why
you paid a lot of capital gains taxes, because if
(13:50):
it was sold after your husband died and it was
in a properly drafted trust, you should have got a
half step up in basis, at a bare minimum, it's
your primary residence, you should get a two hundred and
fifty thousand dollar exclusion on top of that if it's
drafted right. So I'm a little concerned about why you
paid so much taxes when you did it, because this
guide will explain to you that you don't have to
pay those kinds of taxes if the trust is drafted right.
Speaker 3 (14:13):
But please go ahead and get a second opinion.
Speaker 4 (14:15):
Look at it, see if it's okay, and your five
year clock should have been already all set and the
new property should be protected as well.
Speaker 3 (14:22):
Sorry to squeeze all that in so quickly, mister Lutsky.
Speaker 2 (14:25):
Thank you so much for joining us today.
Speaker 3 (14:27):
Always a pleasure.
Speaker 1 (14:29):
This has been Asked Odd on the Financial Exchange Radio Network.
Asked Todd with Todd. Lutsky has been presented by Cushing
and Dolan, serving Massachusetts and New England for more than
thirty years, helping families with the state and tax planning,
Medicaid planning, and probate law. Call eight hundred and three
ninety three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(14:49):
Cushing and Dolan Armstrong Advisor. He does not provide any
legal or tax advice. Please consult with your legal or
tax advisor on such matters. Cushing and Armstrong do not
endorse each other and are not affiliated. Helme. Life planning
can be overwhelming, so make sure you're prepared or you
can make costly mistakes that affect your overall plan. Irrevocable
trusts are the most common type of trust that folks
use for financial protection, and while they can be complicated
(15:12):
to create, they help keep your assets safe because they
contain specific protections that many of us need, like the
possibility of eliminating your estate taxes. Cushing and Dolan are
experts in elder lawn taxation, and they can devise a
plan that covers you in every area where issues can rise.
Their new guide is called Unlocking the Power of Irrevocable
Medicaid Trusts. Learn more about how these trusts can benefit
(15:34):
your family by calling eight sixty six eight four eight
five six nine nine right now. That's eight six six
eight four eight five six nine nine, or you can
request the guide right now by visiting Legal exchange show
dot com. The proceeding was paid for and the views
expressed are solely those of Cushing and Dolan. Cushing and
Dolan and or Armstrong Advisory may contact you offering legal
or investment services. Cushing and Dolan and Armstrong Advisory do
(15:56):
not endorse each other and are not affiliated
This is Ask Todd on the Financial Exchange Radio Network.
If you have an existing estate plan or in the
market for one, Todd Letsky is here to answer your
questions and help you plan for a later life. Ask
Todd is presented by Cushing and Dolan, serving Massachusetts and
New England for more than thirty five years, helping families
with a state and tax planning, medicaid planning, and probate law.
(00:22):
Visit Cushingdolan dot com. Now here's Todd Lutsky.
Speaker 2 (00:28):
As promise, We're now joined by Todd Lutsky from the
law firm of Cushing and Dolan. We call the segment
Asked Todd because it's your chance to ask Todd your
estate planning questions. Studio line is open at eight eight
eight two zero five two two six three. Last week,
I know we left one person hanging. So if if
you happen to be listening that one person, hey callin
(00:51):
early today just to make sure that you get your
question answered. If you're not that person, colin early as well,
because hey, early bird gets the call with Todd Lutsky
eight eight to zero five two two six three. That
number again is eight eight eight two zero five two
two six three. Mister Lutsky, how are you today?
Speaker 3 (01:11):
I am doing wonderful and you I'm good.
Speaker 2 (01:13):
Did you see the news that Oasis is coming back
with a reunion tour?
Speaker 3 (01:17):
No? I haven't they are. I've been singing.
Speaker 2 (01:19):
Wonderwall at work all day today. Uh yeah, everyone asked
me to stop. Good, I said, maybe. In any case, Todd,
I want to talk to you a little bit about
irrevocable trust and specifically, let's say that you're someone who
has one of these Medicaid irvocable trusts. Yeah, say that
you put your home inside of it? Yes, five years,
(01:41):
ten years, twenty years later, you say, hey, you know
what we want to move? Can that be facilitated with
a home inside an irvocable trust?
Speaker 3 (01:50):
Quick answers yes. And that's the good news.
Speaker 4 (01:54):
And now we'll talk a little bit about the details
of what is involved and accomplish that. And the good
news again is that it's pretty much the same amount
of paperwork, the same amount of effort, the same amount
of taxation as would be the case if it wasn't
in the trust. So let's begin. It's in the trust.
(02:14):
Who's the trustee? Oh, it's a kid? So do I
need the kid's permission to sell it. How do I
tell the kid to sell it? Well, you just simply
do that. You tell the child we're selling the property,
and they're the trustee. So they're going to sign the offer,
the p and s, the deed work. They're going to
do all the paperwork. Now they're going to have no liability,
but they are going to have all the paperwork to sign.
(02:37):
Oh but if the kid says no, you know, I
always wanted to inherit that cap property, So no, we're
not we're not selling. Well, you get to keep the
power to remove and replace the trustee anytime you want.
So you will begin by removing the trustee and then
putting someone else on of your choosing, not yourself. And
of course you will then have other bad things that
(02:58):
will happen to that child. You'll inform them of that later. Okay,
so now I'm selling it. But what about the taxation?
Where's all the money go? All the money all goes
into the trust because the trust sold it, So the
trust gets the money. What about the capital gains tax? Well,
these trusts are grant or trusts for income tax purposes,
so that means you get to keep the taxable event
(03:21):
is as if it's reported on your personal return. So
important what you're keeping is your capital gains exclusion on
the sale of your primary residence. So if you're married
and you have this joint irrevocable trust, the first five
hundred thousand dollars of capital gains is exempt. So that
(03:42):
keeps your tax liability down, or it keeps it the
same as it would be had you not sold it
through the trust and then you didn't ask this, Chuck,
But I'm going to give it as a bonus. Sure,
you can then take the money and use it to
buy another house so you can downsize and move to
any state you want with out restarting the clock for
(04:03):
Medicaid eligibility. I mean, if you're listening, you're pretty much
just saying, can't I do all that stuff today?
Speaker 5 (04:11):
Yeah?
Speaker 3 (04:12):
Pretty much.
Speaker 4 (04:14):
So a lot of flexibility built into these trust, folks,
lots of flexibility.
Speaker 2 (04:18):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. If you've got a question that you want
to ask Todd about your estate plans, still have a
little bit of room on the phone lines here at
eight eight eight two zero five two two six three.
That number again is eight eight eight two zero five
two two six three. We are going to take a
quick break right now, but when we come back, we're
(04:38):
gonna get right to your questions with Todd. So again,
still a little bit of room on the phone lines
at eight eight eight two zero five two two six three.
Quick break here and then it's right to your questions
with Todd. That number one more time is eight eight
eight two zero five two two sixty three.
Speaker 1 (04:56):
Ask Todd with Todd Lutsky every Wednesday at ten thirty
only here on the Financial Exchange Radio Network. You're listening
to Ask Todd with Todd Lutsky on the Financial Exchange
Radio Network.
Speaker 2 (05:15):
All right, time we get right to your calls with
Todd Lutsky. First up, we got Mark in Plymouth. Mark,
you're on with Todd Lutsky.
Speaker 6 (05:22):
Hi, good morning everybody. So twenty years ago I did
a trust for our family. Everything has changed quite a bit,
but we're considering moving to Florida and making that legal
residence because of the no estate taxes and no sale,
no income Texas.
Speaker 3 (05:39):
Yeah, do I need to.
Speaker 6 (05:40):
Buy to do a new trust and stuff down in Florida.
Speaker 4 (05:45):
So the type of trust that you did twenty years ago.
I'm assuming was a revocable trust or irrevocable.
Speaker 3 (05:50):
It was revocable, right, and you're gonna and.
Speaker 4 (05:52):
That's still an okay type of plan for you twenty
years later.
Speaker 6 (05:57):
I think so. Yeah, so I'm seventy years old now, Okay,
kids are grown up now.
Speaker 3 (06:04):
Yeahs changed, but a bit so amazing.
Speaker 4 (06:07):
My point is that that as you've gotten older, you
have enough assets. You're not worried about nursing home planning,
so you're comfortable. And that's partly why you're moving. Because
there's a state tax here. The four million dollars or more,
you can stay and we can pay no state tax
in Massachusetts. But if you're married, but if you have
more than that, you're right moving. Moving makes sense. So
I'm assuming that's where you're at, somewhere above that, yes,
(06:30):
And so if that's the case and you have a
nice revocable trust, doesn't mean that twenty years ago that
the documents are no good. They still are. They still
will work for you, So that should be just fine.
So you should be able to move, keep your trust,
which is your heavy lifting document. Don't have to refund
everything you don't have to retitle your your properties. You
don't have to retitle your bank accounts, your brokerage accounts.
(06:52):
I assume they're already titled in your revocable trust. So
all that is great. What I would do, though, is
if you're moving, check two things. One, when you get there,
you do probably want to update your basic documents, the
healthcare proxy, the power of attorney, the will, just to
make them state specific, not only because you should, but
(07:13):
also it's going to help you show your intent to
be a Florida resident. I mean, it's not as easy
as you think. I did a seminar recently called so
you think you changed your residency, you can imagine why
I say that. Right, So, when you leave Massachusetts, do
you plan on keeping real estate in Massachusetts? Yeah, so
(07:36):
any real estate you keep in Massachusetts should be not
should be must be owned in a LLC. If you
don't own it in an LLC, even if you're successful
and you've changed your residency, Massachusetts taxes non residents on
in state real estate as a percentage of the whole.
(08:00):
So if you've got a million dollar property on the
Cape and you're worth five million dollars in total, then
they will take one million as the numerator, five million
as the denominator, come up with your twenty percent, and
then take that percentage and multiply it by the tax
on five million dollars. So you still will be taxed
(08:22):
in mass. But if you convert it to an intangible,
which would be stock in an LLC, Massachusetts cannot tax
in tangibles on non residents, so you need to at
least get that set up in mass. Otherwise, just change
the basic documents, make sure you spend six months in
(08:43):
a day there among a laundry list of other things,
so mass doesn't think that you haven't changed your residency.
Speaker 3 (08:51):
So hope that helps a little folks.
Speaker 4 (08:53):
But there is a lot to think about when you're
changing your residency. That's just a few of them. And
quite frankly, there's a lot to think about when you're
doing your estate plan. Like here I asked, you know,
twenty years the trust is still good, But I'm twenty
years older. If my assets haven't kept up with me,
maybe I do need nursing home planning. And I have
(09:15):
a lot of people who switch from revocable to irrevocable
twenty years later. If you're one of those people, and
you've never done an irrevocable medicaid trust. Get this month's guide.
We're right near the end of the month, folks. It's
going to go away. It's unlocking the power of medicaid
trust in a question and answer format. It's gonna help
you understand the dos and don'ts for you while you're living,
(09:37):
plus explains all the tax ramifications that go with it.
I think you will find that you have way more
control than you ever thought. But if you don't know
if it's right for you, after you read this guide,
you will know eight six six eight four eight five
six nine nine or Legal Exchange Show dot com again
(09:57):
eight six six eight eight eight five six or Legal
Exchange Show dot Com.
Speaker 2 (10:04):
Todd, I've got another one all queued up for you.
Speaker 1 (10:06):
Here.
Speaker 2 (10:06):
Let's go to John in Providence. John, what's your question
for Todd Lunsky?
Speaker 5 (10:11):
I hate Todd the question for you. I've got a
daughter who just is a freshman in college. I'm a
divorced man. I have a main house and a very
very small house in a main house in Rhode Island,
a small house in mass I'm under the impression that
if I did a trust now, which I've not done anything,
(10:34):
and I'm saying, by way I was sixty five and
a half years old, that would affect her financial aid
in a big way, because you know, all of that
equity from my houses would be taken into her financial aid.
Is there a way for me to do a trust
with like an interviewara sister or something like that that
would pass it on to my daughter after she graduated
(10:56):
if something happened to me or something like that.
Speaker 4 (10:58):
Now, I don't know if you're asking two questions now.
Are you saying, do you want to trust that you
think is going to shelter for financial aid now or
if you die, shelter for financial aid now now?
Speaker 5 (11:11):
Because I think would change your financial aid picture in
a big way.
Speaker 3 (11:15):
I don't think so.
Speaker 4 (11:16):
I think when if she's your daughter and you own
those properties right now, they're affecting her financial aid exactly
the same as they would be if you put them
into any kind of a trust that I can think of.
So I don't understand how how that would make a difference.
Right now you own the property. So when you apply
for financial aid, which I'm no expert on for sure,
(11:37):
I think they ask you for all your assets, right.
Speaker 5 (11:41):
Yeah, so they do ask there is your dependent a
beneficiary of any trust? And I think they look at
that type of asset differently. They take a different percentage.
I believe.
Speaker 4 (11:53):
No, if she's a beneficiary of the trust, then they're
going to say that's hers as well. I think, so
you can have a set up so that they don't
own it when she when you die, perhaps there might
be a way of doing it. But again, I'm just
not an expert on the medicaid. I mean, I'm not
an expert on the on the financial side of things
for these things. So my feeling is I don't have
(12:16):
a trust answer for you on that one. So I
hope it helps a little.
Speaker 2 (12:21):
Todd, We've got another call here for you. Let's go
to Diane in Worcester. Diane, you're on with Todd. What's
your question?
Speaker 7 (12:30):
Hi Todd, Hello, thank you for take this. Thank you
for taking my call. I'm seventy four years old and
eleven years ago my husband and I did a we
did an irrevocable trust. Okay, my husband passed away and
I ended up by selling the house. Okay, yeah, I
(12:50):
ended up by paying an awful lot of money in
capital gains. But instead of selling the house, I did
put the money in and the irvoke trust checking account.
And then when I purchased another home, I purchased the condo.
I purchased it with the funds that were in the
(13:11):
irrevocable trust account. Yep, now that was done. You know.
I just did that like almost a year ago.
Speaker 3 (13:18):
Now better hurry though, get to the question.
Speaker 7 (13:21):
Okay, the trust was done eleven years ago. Should I
be looking at having that looked at again?
Speaker 3 (13:28):
Okay?
Speaker 4 (13:29):
So a couple of things here. One, you certainly can
have it looked at again. It doesn't mean that the
trust is bad just because it's eleven years old. So
that's the good news first and foremost. But you certainly
welcome to have it looked at to see if you
think there's a change. I'm a little concerned. You probably
didn't ask this, but quite frankly, I don't know why
you paid a lot of capital gains taxes, because if
(13:50):
it was sold after your husband died and it was
in a properly drafted trust, you should have got a
half step up in basis, at a bare minimum, it's
your primary residence, you should get a two hundred and
fifty thousand dollar exclusion on top of that if it's
drafted right. So I'm a little concerned about why you
paid so much taxes when you did it, because this
guide will explain to you that you don't have to
pay those kinds of taxes if the trust is drafted right.
Speaker 3 (14:13):
But please go ahead and get a second opinion.
Speaker 4 (14:15):
Look at it, see if it's okay, and your five
year clock should have been already all set and the
new property should be protected as well.
Speaker 3 (14:22):
Sorry to squeeze all that in so quickly, mister Lutsky.
Speaker 2 (14:25):
Thank you so much for joining us today.
Speaker 3 (14:27):
Always a pleasure.
Speaker 1 (14:29):
This has been Asked Odd on the Financial Exchange Radio Network.
Asked Todd with Todd. Lutsky has been presented by Cushing
and Dolan, serving Massachusetts and New England for more than
thirty years, helping families with the state and tax planning,
Medicaid planning, and probate law. Call eight hundred and three
ninety three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(14:49):
Cushing and Dolan Armstrong Advisor. He does not provide any
legal or tax advice. Please consult with your legal or
tax advisor on such matters. Cushing and Armstrong do not
endorse each other and are not affiliated. Helme. Life planning
can be overwhelming, so make sure you're prepared or you
can make costly mistakes that affect your overall plan. Irrevocable
trusts are the most common type of trust that folks
use for financial protection, and while they can be complicated
(15:12):
to create, they help keep your assets safe because they
contain specific protections that many of us need, like the
possibility of eliminating your estate taxes. Cushing and Dolan are
experts in elder lawn taxation, and they can devise a
plan that covers you in every area where issues can rise.
Their new guide is called Unlocking the Power of Irrevocable
Medicaid Trusts. Learn more about how these trusts can benefit
(15:34):
your family by calling eight sixty six eight four eight
five six nine nine right now. That's eight six six
eight four eight five six nine nine, or you can
request the guide right now by visiting Legal exchange show
dot com. The proceeding was paid for and the views
expressed are solely those of Cushing and Dolan. Cushing and
Dolan and or Armstrong Advisory may contact you offering legal
or investment services. Cushing and Dolan and Armstrong Advisory do
(15:56):
not endorse each other and are not affiliated
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