September 18, 2024 • 15 mins
Estate planning attorney Todd Lutsky from the law firm of Cushing & Dolan joins the show for his weekly caller segment "Ask Todd".
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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 Lutsky 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 and.
Speaker 2 (00:27):
We are now joined by the one and only Todd
Lutsky from the law firm of Cushing and Dolan. The
segment is Asked Todd, and it's called up because you
get to ask Todd your questions. We've got the phone
lines open for you at eight eight eight to zero
five two two six three. Last week, I believe we
had one, maybe two people that we didn't get to.
(00:48):
So if you happen to be one of those people,
call eight eight eight two zero five two two sixty three,
get in line right at the beginning to make sure
that we get to you. If you don't happen to
be one of those people and you're saying, gee, I've
got a question for Todd. Well again eight eight eight
two zero five two two sixty three. That is the
number to call it ask Todd your state planning questions
(01:08):
live on air one more time. That number is eight
eight eight two zero five two two six three. And
we can usually only have time for two or three
of these, so get calling early if you want to
make sure that we get to you. Mister Lutsky. How
are you today?
Speaker 3 (01:22):
I am never better?
Speaker 1 (01:23):
How are you?
Speaker 4 (01:24):
Uh?
Speaker 2 (01:24):
I'm okay. I had a bit of a science experiment
that I was trying yesterday.
Speaker 3 (01:28):
Yeah, you're into science.
Speaker 2 (01:30):
I was trying to so I was taking snails out
of their shell to see if it would make them
go faster because they you know, they lose that extra weight. Yeah,
and it turns out it just makes them more sluggish.
Speaker 3 (01:41):
Well, I get that.
Speaker 2 (01:43):
So a kind of a downer there, Todd. I want
to talk about irrevocable trust today.
Speaker 3 (01:49):
Yeah.
Speaker 2 (01:50):
How many different kinds of irrevocable trusts are there? Because
I hear people talk about them, and I know there
are more than one. I know there's more than two, even,
But like, how many different kinds of irrevocable trusts exist
out in the wild there.
Speaker 3 (02:04):
So obviously I don't have a definitive number for you,
but but we can certainly talk about a few of
them that are at least commonly used. We talk a
lot about the Medicaid irrevocable trust, so maybe I won't
spend a ton of time on that one. But there's
also trusts that are designed to hold life insurance, like
an irrevocable life insurance trust, and those actually come in
(02:25):
two flavors, the first to die variety and the second
to die variety. And what I mean by that is
that the life insurance that you're putting in these irrevocable
trusts are either on the life of an individual or
on the lives of two individuals, which would be second
to die.
Speaker 2 (02:43):
What would be the use cases for each of those?
Speaker 3 (02:46):
So in those cases, you're thinking, if I have a
life insurance policy and it's causing my estate to be taxable,
So this isn't for everybody, right, think about the side
of your estate and whether or not it's causing a
significant estate tax impact by having it. Example, I'm worth
(03:08):
four million dollars. Oh, but I forgot about my two
million dollar term life insurance policy that I have. Now
I'm suddenly worth six million dollars. Well, from a Massachusetts standpoint,
now I have two million dollars subject to estate tax
because I can only shelter four million with basic estate
planning for a married couple. All right, well that might
be a reason to do it. Or more importantly, look federally, right,
(03:32):
if your life insurance is causing you a federal estate tax,
now you're looking at forty percent hit on the life insurance.
On the face value of life insurance, that's a big number.
So I oftentimes say, look, why don't we set up
a trust that can become the owner and the beneficiary
(03:52):
of my policy. If I do that, now i've it's
already income tax free, but you're convert it to become
estate tax free by making it owned by this aravocable trust.
And that brings me to the differences between one of
the differences between the medicaid trust and this irrevocable life
(04:13):
insurance trust. Clearly, control is a big difference. You have
a lot less control over a life insurance trust than
you do over a medicaid trust. But once you put
it in there, if it now when you die, that
face value that money flows in there state tax free.
That can be very very helpful in your estate. So
(04:35):
and you can also add other stuff to it if
you ever needed to.
Speaker 2 (04:38):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. If you have a question for Todd, this
is your chance to ask. Studio lines are open at
eight eight eight two zero five two two six three.
We do still have a little bit of room, so
if you've got a question for Todd, make sure you
calls so that you can ask him again. That number
is eight eight eight two zero five two two six three.
(05:02):
We're gonna take a quick break here, but when we
come back, it's gonna be right to your questions with Todd.
That number again is eight eight eight to zero five
two two six three. Your questions when we return.
Speaker 1 (05:16):
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 (05:40):
Talk with Todd Lutsky from the law firm of Kushiing
and Dolan. Still have one more spot available if you've
got a question for him at eight eight eight to
zero five two two six three. That number again is
eight eight eight to zero five two two six three.
But let's go to our first caller, Norman in Portland. Norman,
what is your question for Todd Lutsky?
Speaker 4 (06:03):
I was wondering about the irrevocable trust and I often
gets mentioned that it's a medicaid kind of a thing. Yeah,
but my income is such that here and Maine it's important.
Main I'm more I have more income than i'll ever
I'll never qualify for Medicaid, I don't think. And I
(06:26):
was wondering, is there another reason besides the medicaid to.
Speaker 3 (06:31):
Have an irrevocable Well, first of all, there's many kinds
of irrevocable trust, So you're right. It sounds like you
know you've run the numbers, and perhaps a medicaid irrevocable
trust isn't right for you. But depending on the size
of your estate, you could get into these other irrevocable trusts,
whether it be like a life insurance trust that we
talked about during the beginning of the segment, and and
(06:54):
how that can be designed to shelter assets from estate
tax purposes. If you need to set up gifting type
irrevocable trust. You can do that as well. Again designed
to get assets out of your estate for state tax purposes,
but not knowing how much you're worth, those kinds of
trust might not be needed either. But you make a
(07:15):
really good point for everybody else listening. And I've done
this for clients too. They'll come in and they'll say,
you know, geez, I really want to protect my assets
from you know, the cost of nursing home care. And
then I look and I see, you know, either a
combination of their investment income plus social Security plus pension.
(07:35):
And then they tell me they got a rental property
generating rental income. And then, you know, I look at
all this income and I say, wow, you're really self insured.
And if you're self insured, then maybe you don't need
to medicaid. Irrevocable trust and again they're not for everybody,
And so sounds Norman like in your case, you're saying, look,
(07:56):
I've got so much income coming in that even if
I was to shelter are all of my assets from
the nursing home, I would be denied because I have
way too much income. I totally agree. Not knowing your numbers,
it can happen folks, and that's part of the analysis
that needs to be done. Then you say, you know what,
I don't need the EARV Maybe I'll just set up
(08:18):
a revocable trust estate plan take care of the probate,
the estate taxes, the bloodline planning. Or if I need
more than that, because my value of my estate is
very large, well then I can do the revocable trust
coupled with some kind of a gifting trust. So great question, Norman.
I hope that helps for you. Please apply it to
(08:40):
your your situation. Excuse me, but folks, on that line,
we just talked about potentially two different kinds of trust,
revocable irrevocable gifting and irrevocable medicaid trusts. Folks, there's many
kinds of irrevocable trusts, many kinds of trusts in general.
Call and get the guide. This month it's regarding demystifying
(09:04):
the top seven UH trusts for estate planning purposes. This
guide will help you figure out which trust is right
for you. So if you've never done your estate planning,
this will help you figure out which way is right
for you, which one might be right for you, and
also deals with nominee realty trust, Please be wary of
those and maybe special needs trust if you have kids
(09:26):
that maybe have a special need situation eight six six
eight four eight five six nine nine or Legal Exchange
show dot com. You can download the guide there again.
Top seven Estate planning Trusts eight six six eight four
eight five six nine nine or Legal Exchange Show dot com.
Speaker 2 (09:47):
Todd, I've got another caller for you here. Let's go
to Eric in South Hadley. Eric, what is your question
for Todd Lunsky?
Speaker 5 (09:55):
Hi thought, my father's in his mid eighties and his
wife forehouse, and he has some extra cash on hand,
between five and ten thousand dollars that he wanted me
to put into a safe about of the box they
say at the bank that you're not supposed to put
cash in there, And I'm just wondering what advice I
could give him to keep that from say the pushing
(10:17):
home look back if he ends up in one.
Speaker 4 (10:19):
Uh.
Speaker 5 (10:19):
He does have a will, but his wife has a
previous marriage and the things are going to be split
divided between her children and my children, and I mean
and his children. So he's looking for a wants to
give me cash as a gift. He also wants me
to divide it up among my siblings. And I think
he's afraid somehow that they're going to take a look
(10:41):
at that and saying he has he had cashes unreported.
Speaker 3 (10:44):
So let me let me You said an awful lot
really fast, So can I just slow you down a
little bit. It's basically, you've got your dad who's now
You said he's got a second wife or is he
not married at the moment.
Speaker 5 (10:56):
No, he is married. It is a second marriage yet, and.
Speaker 3 (11:00):
His health is such that you think he's going to
actually head into a nursing home.
Speaker 5 (11:05):
Actually, he's in good health. Oh Okay, he's fearful of that.
He has a plan for nursing home care already, he
already has insurance for that. Okay, he's all set on
his end of that. But he's afraid that there's kind
of look bad.
Speaker 4 (11:20):
Period.
Speaker 5 (11:21):
He doesn't want the cash to be anything that's on
the book.
Speaker 3 (11:25):
Yeah, well, you're absolutely right. So he should then make
sure his his state, if he's got good health, make
sure the state plan is in order if it's the
kind that needs protection from the nursing home set it up.
He's got a second marriage, right, so you might want
to make sure that these assets are protected not only
for his current spouse, but also in a way that
they'll be left for his kids on his side of
the family, if that's what he and they want. So
(11:48):
maybe protecting it is important, even if it's not an
ear rev even a revocable trust, if he's got enough
long term care insurance, or he's got a nursing home
plan in place. As you said, even a revocable trust
be in order to just make sure you've got good
estate planning in place. But to your question specifically, if
he starts giving you money, which he's allowed to do,
(12:10):
it will create a five year waiting period for Medicaid
eligibility purposes, no way to hide it. It's going to
come out of the account. It's going to be deposited
in your account. They're going to see it coming out
of his account because they're going to look back five
years when and if he ever applies for Medicaid. Although
you said that doesn't seem to be the issue, but
I hope that at least addresses your concern.
Speaker 2 (12:31):
Todd, I've got one more caller for you here. Let's
go to David and Sandwich. David, we only have a
couple of minutes here, But what's your question for Todd Lutsky?
Speaker 6 (12:39):
I thought my mother has a Medicaid ir vocable grant
toward trust. I'm the trustee. Three of my siblings are beneficiaries.
My mother's asking to give them money on occasion or
are any tax implications they have to file anything with
the irs?
Speaker 3 (12:52):
Are you given the money from the trust or is
your mom given the money from her personal account from
the trust? So it it's a grand tour trust, so
it's like your mom is giving the gift. So one
the recipient. And this is so confusing for a lot
of people, and it almost is counterintuitive. The individuals who
receive the money have no issue. It is not income
(13:16):
taxable to them ever, and it's not gift taxable to
them because they're the recipients. It's the giver. I know,
no good deed goes unpunished, right, it's the giver that
has to pay the tax. So if the amount comes
out of the trust from from that trust is larger
than eighteen thousand dollars per year per person, then they
(13:37):
need to file a gift tax return. Doesn't mean they're
going to pay anything, but it means that they are
going to have to file a gift tax return and
eat into their a thirteen point six million dollars once
in a lifetime exemption, so they won't pay any but
they got a file so really interesting that the giver
is the one that has to pay it. And last comment,
(13:59):
money coming out of the trust probably the way to
go because if it comes out of the Medicaid trust,
it will not create a new five year waiting period
for mom, but if she gave it away out of
her personal account, it would create that five year waiting period.
Speaker 2 (14:15):
Todd Wtski, thank you so much for joining us today.
Speaker 3 (14:17):
Always a pleasure. Thank you.
Speaker 1 (14:19):
This has been asked Todd on the Financial Exchange Radio network.
Ask 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 three nine
three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(14:40):
Cushing and Dolan. Armstrong Advisory 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. Cushing and Dolan are
experts in elder life planning and taxation. They know that
every family is unique and that every estate plan must
be different. Early planning is crucial if you want to
stress free. Retirement and trust are oftentimes the document of
(15:01):
choice to help protect your assets, but with so many
kinds of trusts, you need to learn about which one
is right for your plan. Revocable and irrevocable trusts are
most common, but there are several differences as well as
numerous tax implications with each. If you are ready to
start your planning or need a refresh and existing plan,
call Cushing and Dolan and ask for their new guide
called Dmistifying the Top seven Estate Planning Trusts. Learn how
(15:23):
to protect your assets and potentially eliminate your estate taxes.
Call eight sixty six eight four eight five six ninety
nine right now and ask for your guide today. That's
eight six six eight four eight five six nine nine,
or request it online at Legal exchange show dot com.
The proceeding was pay four 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.
(15:45):
Cushing and Dolan and Armstrong Advisory do 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 Lutsky 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 and.
Speaker 2 (00:27):
We are now joined by the one and only Todd
Lutsky from the law firm of Cushing and Dolan. The
segment is Asked Todd, and it's called up because you
get to ask Todd your questions. We've got the phone
lines open for you at eight eight eight to zero
five two two six three. Last week, I believe we
had one, maybe two people that we didn't get to.
(00:48):
So if you happen to be one of those people,
call eight eight eight two zero five two two sixty three,
get in line right at the beginning to make sure
that we get to you. If you don't happen to
be one of those people and you're saying, gee, I've
got a question for Todd. Well again eight eight eight
two zero five two two sixty three. That is the
number to call it ask Todd your state planning questions
(01:08):
live on air one more time. That number is eight
eight eight two zero five two two six three. And
we can usually only have time for two or three
of these, so get calling early if you want to
make sure that we get to you. Mister Lutsky. How
are you today?
Speaker 3 (01:22):
I am never better?
Speaker 1 (01:23):
How are you?
Speaker 4 (01:24):
Uh?
Speaker 2 (01:24):
I'm okay. I had a bit of a science experiment
that I was trying yesterday.
Speaker 3 (01:28):
Yeah, you're into science.
Speaker 2 (01:30):
I was trying to so I was taking snails out
of their shell to see if it would make them
go faster because they you know, they lose that extra weight. Yeah,
and it turns out it just makes them more sluggish.
Speaker 3 (01:41):
Well, I get that.
Speaker 2 (01:43):
So a kind of a downer there, Todd. I want
to talk about irrevocable trust today.
Speaker 3 (01:49):
Yeah.
Speaker 2 (01:50):
How many different kinds of irrevocable trusts are there? Because
I hear people talk about them, and I know there
are more than one. I know there's more than two, even,
But like, how many different kinds of irrevocable trusts exist
out in the wild there.
Speaker 3 (02:04):
So obviously I don't have a definitive number for you,
but but we can certainly talk about a few of
them that are at least commonly used. We talk a
lot about the Medicaid irrevocable trust, so maybe I won't
spend a ton of time on that one. But there's
also trusts that are designed to hold life insurance, like
an irrevocable life insurance trust, and those actually come in
(02:25):
two flavors, the first to die variety and the second
to die variety. And what I mean by that is
that the life insurance that you're putting in these irrevocable
trusts are either on the life of an individual or
on the lives of two individuals, which would be second
to die.
Speaker 2 (02:43):
What would be the use cases for each of those?
Speaker 3 (02:46):
So in those cases, you're thinking, if I have a
life insurance policy and it's causing my estate to be taxable,
So this isn't for everybody, right, think about the side
of your estate and whether or not it's causing a
significant estate tax impact by having it. Example, I'm worth
(03:08):
four million dollars. Oh, but I forgot about my two
million dollar term life insurance policy that I have. Now
I'm suddenly worth six million dollars. Well, from a Massachusetts standpoint,
now I have two million dollars subject to estate tax
because I can only shelter four million with basic estate
planning for a married couple. All right, well that might
be a reason to do it. Or more importantly, look federally, right,
(03:32):
if your life insurance is causing you a federal estate tax,
now you're looking at forty percent hit on the life insurance.
On the face value of life insurance, that's a big number.
So I oftentimes say, look, why don't we set up
a trust that can become the owner and the beneficiary
(03:52):
of my policy. If I do that, now i've it's
already income tax free, but you're convert it to become
estate tax free by making it owned by this aravocable trust.
And that brings me to the differences between one of
the differences between the medicaid trust and this irrevocable life
(04:13):
insurance trust. Clearly, control is a big difference. You have
a lot less control over a life insurance trust than
you do over a medicaid trust. But once you put
it in there, if it now when you die, that
face value that money flows in there state tax free.
That can be very very helpful in your estate. So
(04:35):
and you can also add other stuff to it if
you ever needed to.
Speaker 2 (04:38):
Talking with Todd Lutsky from the law firm of Cushing
and Dolan. If you have a question for Todd, this
is your chance to ask. Studio lines are open at
eight eight eight two zero five two two six three.
We do still have a little bit of room, so
if you've got a question for Todd, make sure you
calls so that you can ask him again. That number
is eight eight eight two zero five two two six three.
(05:02):
We're gonna take a quick break here, but when we
come back, it's gonna be right to your questions with Todd.
That number again is eight eight eight to zero five
two two six three. Your questions when we return.
Speaker 1 (05:16):
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 (05:40):
Talk with Todd Lutsky from the law firm of Kushiing
and Dolan. Still have one more spot available if you've
got a question for him at eight eight eight to
zero five two two six three. That number again is
eight eight eight to zero five two two six three.
But let's go to our first caller, Norman in Portland. Norman,
what is your question for Todd Lutsky?
Speaker 4 (06:03):
I was wondering about the irrevocable trust and I often
gets mentioned that it's a medicaid kind of a thing. Yeah,
but my income is such that here and Maine it's important.
Main I'm more I have more income than i'll ever
I'll never qualify for Medicaid, I don't think. And I
(06:26):
was wondering, is there another reason besides the medicaid to.
Speaker 3 (06:31):
Have an irrevocable Well, first of all, there's many kinds
of irrevocable trust, So you're right. It sounds like you
know you've run the numbers, and perhaps a medicaid irrevocable
trust isn't right for you. But depending on the size
of your estate, you could get into these other irrevocable trusts,
whether it be like a life insurance trust that we
talked about during the beginning of the segment, and and
(06:54):
how that can be designed to shelter assets from estate
tax purposes. If you need to set up gifting type
irrevocable trust. You can do that as well. Again designed
to get assets out of your estate for state tax purposes,
but not knowing how much you're worth, those kinds of
trust might not be needed either. But you make a
(07:15):
really good point for everybody else listening. And I've done
this for clients too. They'll come in and they'll say,
you know, geez, I really want to protect my assets
from you know, the cost of nursing home care. And
then I look and I see, you know, either a
combination of their investment income plus social Security plus pension.
(07:35):
And then they tell me they got a rental property
generating rental income. And then, you know, I look at
all this income and I say, wow, you're really self insured.
And if you're self insured, then maybe you don't need
to medicaid. Irrevocable trust and again they're not for everybody,
And so sounds Norman like in your case, you're saying, look,
(07:56):
I've got so much income coming in that even if
I was to shelter are all of my assets from
the nursing home, I would be denied because I have
way too much income. I totally agree. Not knowing your numbers,
it can happen folks, and that's part of the analysis
that needs to be done. Then you say, you know what,
I don't need the EARV Maybe I'll just set up
(08:18):
a revocable trust estate plan take care of the probate,
the estate taxes, the bloodline planning. Or if I need
more than that, because my value of my estate is
very large, well then I can do the revocable trust
coupled with some kind of a gifting trust. So great question, Norman.
I hope that helps for you. Please apply it to
(08:40):
your your situation. Excuse me, but folks, on that line,
we just talked about potentially two different kinds of trust,
revocable irrevocable gifting and irrevocable medicaid trusts. Folks, there's many
kinds of irrevocable trusts, many kinds of trusts in general.
Call and get the guide. This month it's regarding demystifying
(09:04):
the top seven UH trusts for estate planning purposes. This
guide will help you figure out which trust is right
for you. So if you've never done your estate planning,
this will help you figure out which way is right
for you, which one might be right for you, and
also deals with nominee realty trust, Please be wary of
those and maybe special needs trust if you have kids
(09:26):
that maybe have a special need situation eight six six
eight four eight five six nine nine or Legal Exchange
show dot com. You can download the guide there again.
Top seven Estate planning Trusts eight six six eight four
eight five six nine nine or Legal Exchange Show dot com.
Speaker 2 (09:47):
Todd, I've got another caller for you here. Let's go
to Eric in South Hadley. Eric, what is your question
for Todd Lunsky?
Speaker 5 (09:55):
Hi thought, my father's in his mid eighties and his
wife forehouse, and he has some extra cash on hand,
between five and ten thousand dollars that he wanted me
to put into a safe about of the box they
say at the bank that you're not supposed to put
cash in there, And I'm just wondering what advice I
could give him to keep that from say the pushing
(10:17):
home look back if he ends up in one.
Speaker 4 (10:19):
Uh.
Speaker 5 (10:19):
He does have a will, but his wife has a
previous marriage and the things are going to be split
divided between her children and my children, and I mean
and his children. So he's looking for a wants to
give me cash as a gift. He also wants me
to divide it up among my siblings. And I think
he's afraid somehow that they're going to take a look
(10:41):
at that and saying he has he had cashes unreported.
Speaker 3 (10:44):
So let me let me You said an awful lot
really fast, So can I just slow you down a
little bit. It's basically, you've got your dad who's now
You said he's got a second wife or is he
not married at the moment.
Speaker 5 (10:56):
No, he is married. It is a second marriage yet, and.
Speaker 3 (11:00):
His health is such that you think he's going to
actually head into a nursing home.
Speaker 5 (11:05):
Actually, he's in good health. Oh Okay, he's fearful of that.
He has a plan for nursing home care already, he
already has insurance for that. Okay, he's all set on
his end of that. But he's afraid that there's kind
of look bad.
Speaker 4 (11:20):
Period.
Speaker 5 (11:21):
He doesn't want the cash to be anything that's on
the book.
Speaker 3 (11:25):
Yeah, well, you're absolutely right. So he should then make
sure his his state, if he's got good health, make
sure the state plan is in order if it's the
kind that needs protection from the nursing home set it up.
He's got a second marriage, right, so you might want
to make sure that these assets are protected not only
for his current spouse, but also in a way that
they'll be left for his kids on his side of
the family, if that's what he and they want. So
(11:48):
maybe protecting it is important, even if it's not an
ear rev even a revocable trust, if he's got enough
long term care insurance, or he's got a nursing home
plan in place. As you said, even a revocable trust
be in order to just make sure you've got good
estate planning in place. But to your question specifically, if
he starts giving you money, which he's allowed to do,
(12:10):
it will create a five year waiting period for Medicaid
eligibility purposes, no way to hide it. It's going to
come out of the account. It's going to be deposited
in your account. They're going to see it coming out
of his account because they're going to look back five
years when and if he ever applies for Medicaid. Although
you said that doesn't seem to be the issue, but
I hope that at least addresses your concern.
Speaker 2 (12:31):
Todd, I've got one more caller for you here. Let's
go to David and Sandwich. David, we only have a
couple of minutes here, But what's your question for Todd Lutsky?
Speaker 6 (12:39):
I thought my mother has a Medicaid ir vocable grant
toward trust. I'm the trustee. Three of my siblings are beneficiaries.
My mother's asking to give them money on occasion or
are any tax implications they have to file anything with
the irs?
Speaker 3 (12:52):
Are you given the money from the trust or is
your mom given the money from her personal account from
the trust? So it it's a grand tour trust, so
it's like your mom is giving the gift. So one
the recipient. And this is so confusing for a lot
of people, and it almost is counterintuitive. The individuals who
receive the money have no issue. It is not income
(13:16):
taxable to them ever, and it's not gift taxable to
them because they're the recipients. It's the giver. I know,
no good deed goes unpunished, right, it's the giver that
has to pay the tax. So if the amount comes
out of the trust from from that trust is larger
than eighteen thousand dollars per year per person, then they
(13:37):
need to file a gift tax return. Doesn't mean they're
going to pay anything, but it means that they are
going to have to file a gift tax return and
eat into their a thirteen point six million dollars once
in a lifetime exemption, so they won't pay any but
they got a file so really interesting that the giver
is the one that has to pay it. And last comment,
(13:59):
money coming out of the trust probably the way to
go because if it comes out of the Medicaid trust,
it will not create a new five year waiting period
for mom, but if she gave it away out of
her personal account, it would create that five year waiting period.
Speaker 2 (14:15):
Todd Wtski, thank you so much for joining us today.
Speaker 3 (14:17):
Always a pleasure. Thank you.
Speaker 1 (14:19):
This has been asked Todd on the Financial Exchange Radio network.
Ask 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 three nine
three four thousand and one or visit Cushingdolan dot com.
The views expressed in this segment are solely those of
(14:40):
Cushing and Dolan. Armstrong Advisory 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. Cushing and Dolan are
experts in elder life planning and taxation. They know that
every family is unique and that every estate plan must
be different. Early planning is crucial if you want to
stress free. Retirement and trust are oftentimes the document of
(15:01):
choice to help protect your assets, but with so many
kinds of trusts, you need to learn about which one
is right for your plan. Revocable and irrevocable trusts are
most common, but there are several differences as well as
numerous tax implications with each. If you are ready to
start your planning or need a refresh and existing plan,
call Cushing and Dolan and ask for their new guide
called Dmistifying the Top seven Estate Planning Trusts. Learn how
(15:23):
to protect your assets and potentially eliminate your estate taxes.
Call eight sixty six eight four eight five six ninety
nine right now and ask for your guide today. That's
eight six six eight four eight five six nine nine,
or request it online at Legal exchange show dot com.
The proceeding was pay four 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.
(15:45):
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated
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