Episode Transcript
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Speaker 1 (00:00):
And good morning everyone. Welcome to Life Happens Radio. I
am Lupiro, your host for this morning, and today we're
going to talk about some things that you should be
thinking about in planning your future, getting your estate plan
in place, from crisis to control. How do you avoid
the pitfalls in life in terms of a state planning,
make sure making sure that you have a plan that
(00:20):
prepares you for any eventuality, that you have the right
people in place, the right documents, that you're financially prepared
and legally prepared should something happen. I know the name
of this show is Life Happens. Are you prepared? So
today we have two of our attorneys from pierre' connor
and Strauss with me. I have Dylan Newkirk here in studio.
(00:41):
Morning Dylan, Morning Lou, happy to be here, Great to
have you here. And Tom Morasco. Tommy, you're from the
New York City office. He's down in New York City
Fox and he's going to join us, give us the
downstate perspective and maybe even the Long Island perspective because
Tom works in our Manhattan office but lives on Right
(01:02):
and so are you prepared for the unexpected? That's kind
of today's theme. Is it healthcare? Is it long term care?
Is it financial? Do you have a will? If you
have a will, it's good. Do you have a trust?
If you have a trust, it's better. So we're going
to start out talking about a couple of documents, and
this is looking at planning for incapacity. If I have
(01:26):
an event, if I walk out the door and get
hit by that bus and I'm in the hospital, ain't
dead yet, but I can't manage my finances, I can't
take care of myself. I can't manage my healthcare. Who
steps in and who is the person that I want
to be making those decisions for me? And Tommy we
(01:47):
talk about this all the time with our clients. How
do you find the right people? How do you craft
a document that puts them in place and gives them
the power and authority that they need. And let's start
out with health care decision making. So when we talk
about healthcare decision making, we're thinking, Okay, I'm in a hospital,
I'm at home. I'm not able to make that critical decision.
(02:11):
Do I need a surgery? Do I need blood transfusion?
Do I need certain medications? If I'm not talking who's
talking for me?
Speaker 2 (02:18):
Tom, Well, the important thing here is that it needs
to be someone that you trust inherently, but also someone
that is familiar with your wishes, because the point of
having somebody there is not for them to impose what
it is that they would want. It's to think about
what you would want in that situation and to be
your mouthpiece.
Speaker 1 (02:38):
And so mouthpiece is an interesting words. That's what they
usually call us, is you know, when you go to court,
here's somebody's mouthpiece. That's your lawyer. But it's also true
in a hospital. It's true in a nursing home. It's
true in a healthcare setting when EMTs show up at
your house and there's a critical decision to be made.
And I'm going to introduce Dylan, who is the newest
(03:00):
attorney at Pierre, O'Connor and Strauss. And how long have
you been an attorney?
Speaker 3 (03:04):
Dylan officially about just over a month.
Speaker 1 (03:08):
Yeah, I thought you're gonna give you, you know, thirty days,
six hours, forty two minutes.
Speaker 3 (03:14):
It's been I think if I look at it, it's
been thirty three days.
Speaker 1 (03:18):
All right. So Dylan actually was a law clerk, worked
at or went to school at Albany Law School and
worked with our firm as a law clerk, and then
took the bar exam, passed the bar exam first time. Congratulations.
Still not everybody does that. And then when he got admitted,
started as an esquire and he has a big sign
on his office, says.
Speaker 3 (03:38):
Esquire says it it's official.
Speaker 1 (03:41):
It's official, Dylan, your fresh perspective yet on healthcare and
healthcare decision making as a young person. You know, you
don't really think too much about incapacity or events that happened.
But the law that we're going to talk about actually
has been developed through a series of cases involving young women.
(04:02):
I'll get to that in a second, But what's your
take on this?
Speaker 3 (04:06):
So obviously I am coming from the younger generation here.
Speaker 1 (04:11):
You know, what what letter are you? But I think
are you z?
Speaker 3 (04:17):
I'm right on the cusp. I'm not actually sure. Some
define it as millennial, some as gen Z. But at
this point, we don't really No one in my age
group is really talking about this unless maybe they've seen
it with a grandparent or a parent has has fallen
(04:38):
ill and at that point they're usually haven't gotten their
plan in place, and they call us when it's too late, unfortunately.
Speaker 1 (04:46):
And I've actually had attorneys go into the field of
trust and the states an elder law because of a grandparent.
A lot of people get drawn into this area because
they're you know, hey, you went to law school, great,
can you solve these problems. I got pulled into this
by my dad asking the same kinds of questions. So
what's your experience, yees?
Speaker 3 (05:07):
So I actually I'm very close with my grandparents myself,
and I mean they've helped me out through law school
and everything like that. And I was when I was
getting into this field, I was like, how can I
help them? How can I learn to best help my family?
And getting into this field, I feel like this is
(05:28):
the best way that I can help my family as
an attorney.
Speaker 1 (05:33):
And temmy it's an area of law that I find personally.
I've been doing it a while forty one years. That
is fulfilling in ways that when I did litigation, and
I did that early in my career, you just don't
get a satisfaction level like you do when you can
help a family through a crisis and you can help
them avoid a crisis by planning properly.
Speaker 2 (05:54):
Yeah, there's nothing truer than that, and some of the
best clause I've ever received. They were kind of two toned, right,
One was to say that, you know, a loved one
that they had passed, but how eternally grateful they were
of the help that we were able to provide them
because it set up everything for the future generations that
(06:16):
were to come, and they could not express enough appreciation
for that, And for me, that's the most gratifying call.
Speaker 1 (06:23):
Yeah, in the second half of the show, we're going
to get to asset protection planning, and that's a big
theme for our firm. How do you protect yourself? How
do you protect the assets that you've accumulated and worked
a lifetime for, and how do you protect them for yourself?
But then we focus a lot more now than I
did twenty thirty years ago on protecting them for the
next generation. And we'll talk about why as we get
(06:43):
to that. But let's go back to healthcare. The case
that gave rise to this issue was the case of
Nancy Cruizian and a young woman who was in a
persistent vegetative state and her parents wanted to remove artificial
life support, and that was something that there was a
(07:03):
conflict so there was litigation and they ended up removing
life support and she expired and they found that she
had no she'd been on the ventilator and on machines
for a very long time. They found that she had
no brain activity. So it's a very controversial issue, and
it's been litigated all the way up to the US
Supreme Court. It's been dealt with in Congress and by
(07:26):
the President over time, and in our firm. There are
two documents that we kind of have merged into one
to create I call it the script. So if you
want to have your life play out according to your wishes,
you want to be the script writer. You don't want
somebody else writing the script for you and saying, oh,
(07:48):
you're going to go over here and do this, and
if that's not what you want, you want to be
the author of that script. So, Tom, the two documents
that we've merged are called a healthcare proxy, and the
living will just talk about each of those and how
they work.
Speaker 2 (08:05):
Absolutely. So the healthcare proxy is the designation of an
agent to make medical decisions in the event that you're
unable to and you're incapacitated. So, as you were pointing
out earlier, the decision to go through a surch we're
in a transfusion or administration of some type of medicine,
and this is one person designated at a time to
serve in that role, whereas the living will is for
(08:28):
end of life decisions. If you're in a persistent vegetative state,
no cognitive function, no chance of recovering, it is the
direction that you make to state whether or not you
wish to persist in that situation or to withdraw any
type of life sustaining treatments, artificial life sustaining treatments.
Speaker 1 (08:49):
Yeah, and this area is complex because more and more
clients come into me. Maybe it's just me, but we'll
get your opinions too. If I'm in a condition where
I have dementia and I don't want to stay alive,
but you could have dementia for ten years and you
(09:10):
don't have any terminal illness that's going to take you out,
You're not being kept a library artificial means. So I
have more and more people that say I want I
have a client right now that wants to put in
her documents that she can go to Sweden and go
to one of the houses there that they allow you
to expire naturally of your own volition. And in the
(09:31):
US there are certain states California, Vermont, Oregon, not New
York yet that have something called aid in dying, But
for aid and dying, you've got to be competent. So
that's not what we're talking about here. We're not talking
about ending your life. We're not talking about anything like it.
(09:53):
Do not Resuscitate order a DNR, which says, if you die,
don't bring me back. That's a very different document. Most
people who are functioning well now don't want a dn R.
But the converse of that, or the inverse maybe is
if I'm in a situation where I am terminally ill
(10:13):
and I'm not going to recover and I don't have
any sentient life, there's no quality of life. Do I
want to be kept alive by tube feeding? Do I
want to be kept alive by a ventilator, by artificial
nutrition hydration? All of those issues go into this document,
and we want our clients to think about this very
(10:34):
carefully because it's a very sensitive decision. And if you've
ever been in the position of that decision maker I
have on twit's two family members, and so if you're
in that seat. Having clear guidance is so important, and Dylan,
clear guidance as a young person is very important all
(10:54):
the way along the line. But when you can have
your client's draft documents that that next generation, who those
decision makers are, and then what their responsibilities are and
what your wishes are writing that script, that's so important.
Speaker 3 (11:09):
It really is, especially when you get into the different generations.
Each have different values, and depending on the generation and
your values, you might think that acting a certain way
is better for the individual who may be incapacitated. They
may want to keep artificial means or they don't want
(11:32):
it while you do. And it's extremely important to have
those instructions so you know what to do.
Speaker 1 (11:40):
So we have a healthcare decision making guide at Pierre
O'Connor and Strauss. We have a guide for just about everything.
So our healthcare decision making guide goes through the healthcare proxy,
the living will, that do not resuscitate order, something called
a medical order for life sustaining treatment. The most gives
a little bit of the history, and in our firm,
we are believers strongly in the healthcare proxy and the
(12:03):
healthcare declaration or living will being together in one document.
So that's how we approach it. You can get our
Healthcare Decision Making Guide, along with our State Planning Guide,
or our Medicaid Guide or any of our other guides
on our website at Pyerrolaw dot com go to resources.
We're happy to provide those free of charge to you again,
Pierolaw dot com. The Healthcare Decision Making Guide. Next up,
(12:25):
we're gonna come back after a short break and talk
about financial decision making. If I'm in at coma, if
I get hit by that bus, Who's paying my bills,
Who's managing my assets, Who's making sure that everything I
have is protected during that time period. You're listening to
the Life Happens Radio because you know what life happens.
Be prepared. We'll be back right after this big and
(12:52):
welcome back to Life Happens Radio. I am Lupiro, your
host for this morning, and we are talking about planning
and getting people in place with the right documents, the
right powers, so that when life happens, you are prepared.
We talked about a healthcare proxy, and I just again
want to point out that we have guides available on
a state planning, on long term care planning, Medicaid, on
(13:16):
Guardianship on Business Planning, business succession Planning, and the Healthcare
Planning Guide. All of those are available. We produce them
in house. These are not things we buy online. They're
not AI generated. There are things that we have worked
on over the years and keep updating and fine tuning.
The twenty twenty five Estate Planning Guide is hot off
(13:37):
the press, so go to purolaw dot com. That's p
I E R R O l a W dot com
and avail yourself for the resources. We think education is important.
We do it in writing, we do webinars, we do seminars.
So keep tabs on us on that website to see
what the future events are and kit the guides because
(13:58):
they will give you an education. And a lot of
people just go to Google. You know, that's kind of
natural and dal in your generation googles everything, of course,
and so it's amazing what you can find on Google.
You can do a lot of actual legal research on Google,
get statutes and cases and things. But the guides are
are nuanced and it's all for New York law. So
(14:21):
what do you think about the googling of of all
of this information?
Speaker 3 (14:27):
I mean, that is that is my generation? Uh maybe
not even just my generation at this point doing doing
the googling. But you do that, and if you've googled
a state planning and lately, you're going to find a
bunch of a bunch of stuff that it's going to
(14:47):
be convoluted and tough to understand unless someone can explain
it to you in a reasonable manner and go through
the nuances of each different situation.
Speaker 1 (15:00):
Yeah, And we try to do that in these guides
and try to make it personal to you so that
when you come in to meet with us. And the
process for state planning is we send you a link
to a site where you put in your information everything
you want us to see, which is everything, because we
want to have a full set of information about you,
(15:22):
your family, your assets, what it is that you do.
So we have an online questionnaire which our clients fill
out before they come and meet with us, and it
gives us a great start to a meeting. We know
and immediately what your family is, the children, decision makers,
what your assets are beneficiaries. So all of that is
(15:44):
the start of the process, and then we start asking, Okay,
who are your healthcare agents? In the healthcare proxy, Tom,
they don't allow you more than one agent. I just
want to point that out. Now, these documents have different
ways to fill them out. A lot of attorneys get
this wrong in a point two or three healthcare agents,
and that creates a tremendous problem when you go to
(16:06):
the hospital.
Speaker 2 (16:08):
Yeah there's New York is not permit for that, and
it's specifically for that reason. In case there's an emergency
and something needs to be done, the last thing we
need is having two conflicting views as to what should
be done. So you're always designated one agent at a time,
but you are able to name successors. So in the
(16:28):
event that the first name agent is unable to act
for whatever reason or is unavailable done, your successor would
step in.
Speaker 1 (16:36):
And you know, people will say, oh, you know, my
parents are already in their sixties. That's like I'm in
my safety. So I'm a boomer and that's what my
kids say, Okay, boomer, Well what are you, Tommy? What
generation are you in? And I've been doing a lot
(16:57):
of research on the generational differences because I'm an employe,
and you know, treating gen z like you treat boomers
is a complete mistake. So everybody has unique preferences in
how they work and things like that. What is your generation.
Speaker 2 (17:13):
I'm actually millennial, but I'm on the earlier end of
the millennial, more towards the start of the millennial generation.
Speaker 1 (17:20):
Right, So how long you've been practicing TOM.
Speaker 2 (17:24):
Over ten years now, that's great.
Speaker 1 (17:26):
And so healthcare proxies, living wells combined document healthcare decision
making one agent at a time. Let's flip to the
power of attorney and talk about financial decision making. And
here you can actually have multiple agents. So if you
have three kids and you don't want to cut any
(17:47):
of them out, you can make all three children the
agents under your power of attorney, and if you really
want to screw up their lives, make them all agree
on every decision. So you have the option of having
two or more agents act jointly where they have to
(18:07):
agree on everything, or separately so that any one of
the two or three people could act. We try not
to put four people on because that just gets to
be a circus. So two is good, three is okay.
We don't trip typically go above that, but you always,
again TOM, have alternates on there. So if your primary
agents aren't available, you have secondary tertiary agents, and you
(18:31):
can put older people in as long as you have
backups that are younger. So a lot of clients miss that.
I say, I'm not going to appoint my parents because
you know they're only going to live another twenty years.
Well during that twenty year time, they could make decisions
for you. Just put somebody in behind them as an alternate,
and that allows them to act, but then have the
(18:54):
backup so that if they are not available for any reason,
you've got a decision maker.
Speaker 2 (19:01):
That's very true. I mean, the whole point of an
estate plan is fluidity and flexibility, and it's supposed to
grow with you as you age and your circumstances change,
and sometimes we don't always get that second opportunity to
go in and make a change. So the way that
we draft and we prepare our documents is we try
to account for those contingencies. We always want to have
(19:22):
a plan in place. So you shouldn't be hesitant if
there is somebody who's available now, because truth be told,
that the name of the show life happens. There's nothing
to say that something couldn't happen today or tomorrow. And
if that first person would be your parents, then there's
no reason why not to have them, as you said,
provided that in the event they weren't able to, we
do have a succession plan in place.
Speaker 1 (19:45):
Yeah, So when clients walk out of a consult with
us there, they're typically say it came in for a
sip of water and felt like I'm drinking out of
a fire hose. You know, they're exhausted because we drilled
down on all of these questions. What if that person's
not available, what if this person is not available, Who
are your beneficiaries going to be? What if they have
(20:05):
a disability? All of the questions that we drill into
and have very deep discussions on before we put pen
to paper and start drafting a document. It's very important
to ask all of those questions. So in the Power
of Attorney Tommy, there are some powers that are standard
and other powers that need to be considered and added.
In our Power of Attorney form. A lot of clients
(20:27):
call up and say, well, do I really need a
lawyer to do a power of attorney? Do I really
need a lawyer to do a healthcare proxy and a living will?
And the answer is, you know, try it, take your shot,
but more often than not they get it wrong. And
so what are some of the things that people should
be thinking about to put into that power of attorney
so that their agents have the ability to do things
(20:48):
on their behalf.
Speaker 2 (20:50):
That's a great point. And just to circle back to
what we're talking about before with googling, and sometimes it
could be convoluted, but conversely sometimes so simple fine, and
a lot of the times that's where things have missed.
So one of the things I've seen that when we
try to do the do it yourself kind of a
power of attorney and they grab the short form from
the New York site. The gifting powers, which is tremendous,
(21:15):
are often overlooked or they're not even considered. And I
had a great teacher once say, your eyes don't see
what your mind doesn't know, and you do not simply
know what it is that you should be looking for.
And with gifting powers, we don't expand on what is there.
As a matter of default, you're going to be limited
to making transactions in the Europe and the amount of
(21:37):
five thousand dollars. Now, if I'm dealing with an older
loved one and we're trying to consider medicaid planning and
they have assets that are in the tens of thousands.
How am I supposed to rely on that power of
attorney to move and put the plan in place in
order to get them to help they need And the
answer is I can't. And that's where we have the
biggest bit fault.
Speaker 1 (21:56):
Yeap, Dylan. One of the areas you're working on in
the firm is with Frank coming on the Medicaid side,
and we see this on the Medicaid planning side all
the time, where clients come in and now they've lost capacity,
they've had a stroke, they've had an illness, they're diagnosed
with dimension lost capacity, and they bring in their powers
of attorney if they can find them. They were done
twenty thirty years ago, done by their real estate lawyer,
(22:19):
and they're just not adequate.
Speaker 3 (22:22):
Yeah. Unfortunately, a lot of the power of attorneys that
come in that we see maybe come from different lawyers
or was a DIY job. But if you if it
did not come from a bona fide estate planning attorney,
they almost always are missing those gifting powers, and especially
(22:42):
with the older with the older power of attorneys, I
just saw one for the first time that they didn't
even have the statutory gift rider on it, which was
another piece of paper you had to actually catch at
the end.
Speaker 1 (22:56):
The other thing is the statute for power attorney has
changed over the years career. It's changed four or five times,
so healthcare proxy, power of attorney. Make sure it's drafted thoroughly.
Make sure you have alternate agents power attorney. You can
have co agents. Make sure it includes gifting powers that
are well considered, well thought out. Consider your digital assets.
(23:17):
A lot of people don't think that they have digital assets,
but they do, so we draft those contingencies in if
you want your pets to be taken care of, we
put those so you need to think about these documents, folks,
in a comprehensive way, and we try to do that.
Our guides are a great way to get started with
the information, but the best way to close this is
to come in for a consultation. We're going to take
(23:39):
a break for the news. When we come back, we're
going to unravel wills, trusts and a Dora. So stay
with us. You're listening to Life Happens Radio on Talk
Radio WGY. Be right back after the news and we
are back to Life Happens Radio. Hope you're all doing well,
staying warm, enjoying your Saturday, and we're here in studio
(24:02):
talking about a state planning, long term care, planning, all
the things that you need to think about to make
sure that you have the preparation necessary to succeed and
succeed through not just good times, but through bad times
as well. We all could do it if we're on
top of the game, on top of our careers, you know,
(24:22):
stockpiling money, in control of everything and every decision that
we have. But life isn't that simple, and it's not
a straight line. So when you get that curveball thrown
at you and you can't hit it, and you get
a diagnosis that you don't expect, you get an accident
that you have never contemplated, you get divorced, you have
(24:43):
issues with family members. All of these things come into
play and we need to be prepared for them. So
today we're talking about planning documents. We started with a
healthcare proxy and a whole panoply of documents that are
available to you in our office. It's primarily healthcare proxy
and living will in a combined document. We talked about
powers of attorney, making sure you go beyond just the
(25:06):
statutory basics of the statutory form is about three pages,
our forum is about fifteen. So we'd modify that document
substantially to make sure that our clients needs are satisfied.
And folks, we do the back end of this too.
They call it litigation. If you don't have the right documents,
healthcare decision makers in place, you don't have an agent
(25:26):
under a power of attorney in place, you have no
one to make decisions for you, and somebody has to
go through a whole court process called guardianship. We talk
about that on this show as well. It's a big
part of our practice, litigation, trust in the States, and guardianship. Unfortunately,
it happens, life happens, litigation happens, but being planned in
advance and having a comprehensive plan, power attorney, healthcare proxy.
(25:49):
The next piece of it is a will, because when
we die, we want to make sure that our property
goes to the people that we choose. Not According to
New York state law, if you want to leave your
hands your property in the hands of the state legislature,
you can do nothing. But if you want to take
control and write your own script and know who it's
going to, how it's going to them, et cetera. You
want to at least have a will. We're gonna talk
(26:12):
about trusts in a moment, but tom the will is
a document. In my career, it was what we did.
I tell this story to our young associates like Dylan
all the time. When I started practice, guess what, in
nineteen eighty three, there were no computers. There was nothing
that you could do word processing on. It was a
typewriter and it was onion skin paper in the beginning,
(26:35):
so wills were shorter than they or two pages because
you didn't want to have to change anything. And word
processing kind of revolutionize this. And I called the IBM Selectric,
which was a ball typewriter with a white out capability.
That was like revolutionary in its day. But now we
have word processing, we can we can do so many
(26:55):
different things with documents and maintain them and change them
and modify them. When you get to a will, you
want to make sure you have it up to date.
You want to make sure you have certain things in place.
What are those things, Tommy?
Speaker 2 (27:07):
So we need to first make sure that you have
the right person in place. Just as any other document,
you need to have somebody appointed as what is known
as your executor. That's the person who's going to be
managing your estate, collecting your assets, distributing them, pursuing to
the wishes that are in your will. Then also we
need to consider who our beneficiaries are going to be,
and as we were talking about before, there always needs
(27:29):
to be a backup plan, so whether it's for the
people we're appointing to take care of our affairs or
the people that we're leaving behind too. We also have
our contingencies in place, but that also goes a bit
beyond just naming an individual. That's also considering their circumstances
and what their circumstances are today may not be what
they are at the time that they are going to inherit,
(27:51):
so making sure that you provide for contingencies such as
disability or the applying for or receiving government benefits, or
even the potential inheritance for a minor So there are
multiple things that should be considered and go into this
world and make sure that not only that your wishes
are upheld, but also you're considering the lives of those
(28:11):
who it is that you're putting in place under that will.
Speaker 1 (28:15):
So the power of attorney in healthcare proxy operate while
you're alive, but they terminate upon your death, and the
power attorney is the document takes care of property and
the will is what picks up after you're gone. But Dylan,
you had the ability to learn in the surrogates court,
you clerked in the surrogates court here in Albany County.
(28:35):
You now practice in the probate area. Probate's no picnic, No,
it is not.
Speaker 3 (28:40):
It's one thing a lot of people don't realize is
that probate it's a year long process, at least at
least a year long process when you get into it.
At the start of it, you've got to come up
with and find all the assets, the liabilities. You have
to petition the cour or to appoint you as executor
(29:02):
and to prove that the will is in fact valid,
and then there's a waiting period afterwards where you can't
distribute or really do much of anything until the creditor
period has closed yep, which is seven months long.
Speaker 1 (29:18):
So when someone dies, a lot of people are under
the misconception that you have a will, you have an executor,
that will can just be taken to the bank and say, okay,
I'm the executor, I just want to distribute these assets.
That's not how it works. When you have a will,
it has to go through a court process. Probate is
the court process. You have to get jurisdiction over the
(29:39):
necessary parties. So the people who are your natural heirs
we call them distributees. The people who are named in
the will we call them legates, and we have to
get waivers of citation or notice is served on them,
and if they don't, if they don't comply, we have
to serve them with process, meaning we have to hire
a process server to personally serve them and give them
(30:00):
a court date, a citation return date when they can
come back in and just raise their hand and say,
I want to examine the witnesses to this will. I
don't think it's a valid will. They're entitled to that
hearing as a matter of right. So while all this
is going on, your executor has no power, no juice,
they don't have any authority. Until the court says, okay,
(30:21):
all of these things, we determine the will is valid.
We have jurisdiction over everyone. We're going to issue a
court order declaring that the will is admitted to provate
and then they're going to issue a certificate and that's
the ticket for the executor to go out, and that's
called letters testamentary and Dylan. Until they get letters testamentary,
they can't do a thing.
Speaker 3 (30:40):
No, Unfortunately, they can't bank accounts, sit their bills at
times go unpaid. And that's really the struggle is getting
to those letters to give the executor the authority to act.
Speaker 1 (30:55):
Yeah, I'll give you a perfect example. I don't do
this often. I had a client who just didn't really
have anybody else so wanted me to be their power
of attorney and their executor. And he was about to
sell his house. He was actually moving into an apartment
and just wanted to get some cash and pay the
mortgage off. And there was no liquidity in the estate,
you know. And we were going to close on the house,
(31:17):
and we had a closing date and I was going
to close it by power of attorney and he would
get whatever was left of the proceeds. Three days before
the closing, he died. So my power of attorney's gone.
Now I can't use the power of attorney. The buyer said, okay,
we need to now probate the will. Well, he didn't
have any parents. They had died, his siblings had died,
so I'm chasing, you know, niece's nephew's brother sisters to
(31:39):
try to get these waivers of citation serve so I
could get it. And the interest rates changed and the
buyer walked, so we lost to sale the house. We
had to go into a short sale situation. And you
face those risks when you don't have control over assets
and you have this delay period of probate and Tom
the will is a necessary document, but there are things
(32:00):
that we can do better.
Speaker 2 (32:03):
That's absolutely true. And just as just as a follow
up point to what you said, during that time where
you're sitting on that real estate, all the carrying costs
are still accruing real estate taxes, utility. So that's another
thing to keep in mind. So one way we avoid
that is through a trust. Now it trust is a
document that works in a similar fashion to a will, However,
(32:25):
it avoids the whole probate process. It is independent from
the probate process. So if we are able to in
that situation, Lou, if that weren't in the trust, then
you are the appointed trustee. Even with the unfortunate death
and the timing of it, you still would have been
able to go through with the deal. So it is.
It is a tremendous tool in the estate planning ourselves.
Speaker 1 (32:48):
Yeah, trusts have a lot of uses, a lot of motivation,
and in fact, for the rest of this show, for
the rest of the morning, we're going to talk about
trusts because I call it the Swiss army knife. You know,
what do you need? I want to protect my kids,
Well that's this blade here. Well, I want to protect
from medicaid. Well that's that blade over there. Well, I
want to avoid probate. All of the things that you
(33:09):
do to achieve these goals and to achieve your planning goals,
most of that happens through a trust. And we've been
proponents of trusts for my whole career, long before the
bar kind of flipped to be a trust practice that
was primarily a will practice. We've been doing revocable living
trusts and they used to look at me like I
(33:29):
had three heads, what do you need to trust for what?
And now it's like, how can you live without a trust?
So it's come full circle. I feel vindicated in my
opinion trusts early on in my career, but when we're
talking about probate. You're right, my client, that house could
(33:49):
have closed on the closing date because my power as
trustee transcends death. I'm a trustee while they're alive, and
I'm the trustee and they're deceased, and I have the
ability to handle trust assets without having to go through
that court process. And Dylan, you're working with a lot
of our clients in their probatea states. They're paying us
(34:13):
to do that. So there are a lot of steps
that have to be taken. And people say, well, why
why do I have to pay so much? Well, this
is what a probate proceeding is. And the court needs
to see these documents. We need to serve these people,
we need to get jurisdiction over all these people, and
those costs can mount.
Speaker 3 (34:31):
Those costs do add up. For example, I have my
first court date coming up this tth coming we so.
Speaker 1 (34:40):
Dylan's going to court, Tommy, no boy, I sure, am.
Speaker 3 (34:45):
Court costs money. There's filing fees. For example, you got
to pay for the time for me to get down
to the court and to sit in the court while
they read off all the all the cases for the day.
There's there's documents that need to be produced, they need
to be given to the court, and the court needs
to scrutinize them. That all takes time.
Speaker 1 (35:08):
Yeah, I tell my clients, if you knew what you
were doing, you would never inflict probate a upon your
family or guardianship. It's just very shortsighted. So, Tom, in
our most basic trust, the revocable living trust, talk about
who the parties are to that and how does the
(35:28):
trust work. And in a revocable trust situation, who are
the parties.
Speaker 2 (35:33):
So the way that it's structured is that there is
the grand tour of the trust, who is the creator
of the trust. So if you're establishing the trust, you
are what is known as the grand tour. But also
in a revocable trust setting, you are serving as your
own trustees as well. Now, the revocable trust is extremely flexible.
Think of it as another extension of yourself. You have
(35:54):
the ability to always go back in, change, modify, or
even cancel the trust if necessary. The parties are always
going to be the person who's establishing it, the trustee
who's going to be operating it. So in the estate
you have your executor and the trust, you have the trustee,
and then you have successors always because in the event
that I, as the establisher of this trust becoming capacitated,
(36:18):
I have people who are designated to step in. And
also in the event of my death, there are people
there to take over my place. And then also we
name similar in the will beneficiaries and back up beneficiaries
as well.
Speaker 1 (36:32):
So back to our decision of who and how many
we have in the healthcare proxy, it can only be one.
There's another document we're going to mention, the disposition of
remains appointment. It can only be one. But a power
of attorney, a trust, and a will can all be
multiple agents coagents. They can act separately or jointly. So
(36:52):
very often when we line up these documents, the powers
are going to be very similar, especially in the trust
and the power of attorney. And when you have a trust,
most of your assets go into that trust and get retitled.
We call it the trust funding process. So your home,
your bank accounts, your brokerage accounts. But there's one major
asset class that does not get retitled, tom.
Speaker 2 (37:14):
And that is your retirement accounts.
Speaker 1 (37:17):
Absolutely iras, which is in many clients portfolios. That's the
majority of their wealth. I just met with clients, very fortunate,
great jobs. She had a great that's the wife that
had six million in four oh one k. The husband
we had to put all the other assets in his
name to balance it out because we were doing some
state tax planning, and that four oh one k can't
(37:40):
go into the trust. So how do we deal with that?
If we can't transfer the asset, can't transfer the IRA,
how do you put that into the estate plan?
Speaker 2 (37:50):
So that we have to then consider who our beneficiaries
are and updating the designations of who those beneficiaries are
in order to make sure that it goes to whom
we want and also how we want it because there
are very special rules as to the distribution of retirement assets.
Speaker 1 (38:07):
Yeah, it's one of the most complicated areas that we
deal with. And there is a new law that I'll
call it new five years, the Secure Act, which actually
passed in twenty twenty, but final regulations didn't come out
until October of twenty four and so now we actually
have the final rules as to how these accounts work.
But for most beneficiaries like children, there's a ten year rule,
(38:29):
so you have to drain. In this case, the kids
would have to drain a six million dollar account over
ten years and pay all the income tax on it.
Under the old rules, you could stretch it out for
a lifetime. So we have to integrate those retirement plan
benefits into trusts very very carefully. And there are certain
trust beneficiaries who don't have to do the ten year
(38:52):
rule who are able to do a lifetime payout. And
those are beneficiaries who are special needs individuals, ronically ill individuals,
someone ten years or less younger than you, so in
your same generation they could get a lifetime stretch, or
a spouse if they don't do a spousal rollover, they
can still get a lifetime stretch. So those are the
(39:14):
four exception beneficiaries edbs. We call them exception designated beneficiaries,
and those are the people that we can stretch the IRA. So, folks,
when we sit down with clients and we're looking at
their portfolio and we're looking at all of their assets
and their trust, we are really looking very closely at
how we name specific assets to specific beneficiaries in specific proportions.
(39:40):
And retirement accounts are some of the hardest things to
deal with, but if you do it, properly, you can
get some of the biggest benefits. And just to throw
this out there, Tommy, we do tax planning as part
of all this. The estate tax thresholder for New York
is about seven million, little over seven point one six
and federally it's about fourteen or thirteen point t nine
to nine million, So seven and fourteen. Most clients aren't
(40:05):
taxable from an a state tax perspective, But in New
York there's a big penalty for going over that seven
point one six million, and they call it the cliff,
and you don't want to go over the cliff. And
what the heck is the cliff anyway, tom And that cliff.
Speaker 2 (40:21):
Is that once you've exceeded the one hundred and five
percent of what the exemption amount is, rather than just
being taxed on the difference between the exemption amount and
your actual true assets, the actual tax ends up being
on the entirety of your estate, which would cost hundreds
of thousands of dollars in that event.
Speaker 1 (40:42):
Yeah, So we're going to take another short break last
one of the show. When we come back, we're going
to go from powers of Attorney, healthcare proxies, wills revocable
trusts into the world of irrevocable trusts and asset protection
and tax planning. So stay with us. You're not going
to want to miss the section about protecting your assets
if you ever need long term care and protecting assets
(41:03):
for your kids. We have something called the Beneficiary Control
Trust that you're not going to want to miss. So
stay with us. We'll be back right after this short
break and we're back to Life Happens Radio. Thank you
for joining us this morning. I'm Lupiro, your host, and
I am in studio with Dylan Nwkirk, one of the associates,
(41:26):
one of the Young Legal Eagles if you remember that show,
and Tom Barrasco, who is down in our New York
City office. Tommy is one of our young attorneys. He's
been out about ten years. Dylan's been out about a month,
so I've been out over forty. So we have enough experience,
I think, to get through this conversation. We've been talking
about powers of attorney, healthcare proxies, wills, trusts, and now
(41:48):
we're at the point in time where we're looking at
asset protection so important. So many clients come in and say, well,
you know, what are the costs that I could face.
What is life happening if I have a sudden illness
and I have to go to assistant living or I
have to go to a nursing home, or I try
to get home health care. This is an area that
FOLKS is going to be evolving rapidly because the budget
(42:10):
cuts that are being proposed in Washington right now are
drastic cuts to Medicaid. Cuts to medicare the programs that
people rely on. And it's tough now to get the
help you need, but gonna get tougher, I'm afraid. So
doing asset protection planning is so important. And the trust
that we're going to talk about now is a trust
(42:33):
that we call the Medicaid Asset Protection Trust. Now, Medicaid
and asset protection. How does this work? How can I
take my assets and when it comes time to apply
for Medicaid, which is a program that only allows me
to keep about thirty one thousand dollars total, how can
I protect my other assets so that I have them
available to pay for my retirement over time? But still
(42:56):
if I do need care, and that care in our
area right now is costing about sixteen thousand dollars a
month per month folks, not a year per month, so
your year up, you know, pushing two hundred thousand dollars
a year Tom on Long Island. I think it's even
a little more expensive.
Speaker 2 (43:12):
Yeah, it's almost twenty.
Speaker 1 (43:14):
Two So two hundred and forty thousand dollars a year
to pay for a nursing home where you don't want
to be. So Medicaid is the only program that will
protect it. So we have a specific trust that we
design and we lay it out for our clients. We
draw you a picture of flow chart as to how
your assets play out and temmy, this is a lot
more flexible and you you had a great turn of
(43:36):
a phrase earlier, the flexibility of these trusts. People don't
really understand.
Speaker 2 (43:43):
It's true and roles and Medicaid as to protection. Trust
is what is known as an irrevocable trust. Sometimes we
have a lot of pushback from clients because just of
the perception, oh, it's irrevocable, and there's also different there.
There's also some specific rules and different is that distinguishes
it from the revocable trust. So whereas on a revocable trust,
(44:04):
you as the creator of the trust, are also able
to serve as a trustee in a Medicaid asset protection trust,
you are not able to so immediately people think, oh,
I'm losing control over these assets. But what's important to
remember with these particular trusts, Lou, as you said, with
the flexibility, there are certain powers that you do retain.
One of them is naming who your trustees are, and
(44:27):
second is also being able to change and update beneficiary
is when necessary. And Lou, you were saying, well, what
happens if we need to have access to, you know,
continuing support. How do I resolve that with these assets?
I'm putting this into a trust because part of the
crucial aspect of this trust is that the principle of
(44:49):
that trust cannot be made available to you directly. And
that's usually where we get the most hang up.
Speaker 1 (44:53):
It's a one way street, right and diagram. We have
the ability to take the trust and put it over
on the right side of the page and put our
home in there, and you don't really lose access to
the home. You have a life estate or life use
of the home, so nobody can tinker with that. So
you put your home in there and that's protected. You
(45:14):
can put brokerage accounts, bank accounts life, insurance policies, annuities, businesses,
other real estate all can go into this trust. On
the left side of the page, you have your retirement accounts,
your IRA's, your four to one k's, because remember, we
don't put those in trust for tax reasons, but in
this context, we don't have to put them in trust
(45:35):
for medicaid reasons because they're exempt. And tom this is
a big piece that most people miss.
Speaker 2 (45:43):
It's true. So everyone they like you said, a lot
of their biggest assets, whether if it's not a home,
it's a retirement account. But the principal value provided that
the retirement account is in payout status, So the only
portion that they're looking at for medicaid purposes is the
income that is derived from the tirement account. You're required
minimum distributions.
Speaker 1 (46:03):
So in this diagram, picture it in your mind. On
the left, you got to circle with your retirement accounts.
Those are yours. You can take money out of those anytime.
In the middle of you and we leave you with
enough liquidity, enough bank accounts and other assets that you're
comfortable you don't have to run anywhere to get money.
A lot of people think, oh, I have to run
to my trust and ask my kids, No, you have
(46:24):
plenty of access to capital. We're going to make sure
of that. And then on the right is your Medicaid
asset protection trust where you put all these other things in.
You can name trustees and change trustees. You can name
beneficiaries and change beneficiaries, and your beneficiaries couldn't get money
out of that trust during your lifetime. So your trustee,
you could hand money to your kids and they can
(46:45):
put it in an account and there's no restriction on
what the kids do with that money. They can use
it back, help you pay your bills. And if they don't,
what do you do tom.
Speaker 2 (46:56):
You remove them as trustee and then beneficiary you.
Speaker 1 (46:59):
Say you're fired. That's right, so you have the pleasure
of firing your children. So that's the Medicaid ass a
protection trust. I will just throw on that. When we
create a trust revocable or Medicaid ass protection or other
type of trust, we try not to let that trust
end because it can create tremendous value for the kids
by just carving up the trust into as many children
(47:21):
as you have, and they get what's called a beneficiary
control trust. We are about out of time, Dylan, Thanks
for joining me today, Tommy, thanks for joining us from
New York City, and thank you for listening today. We'll
be back next week with Life Happens Radio.
And good morning everyone. Welcome to Life Happens Radio. I
am Lupiro, your host for this morning, and today we're
going to talk about some things that you should be
thinking about in planning your future, getting your estate plan
in place, from crisis to control. How do you avoid
the pitfalls in life in terms of a state planning,
make sure making sure that you have a plan that
(00:20):
prepares you for any eventuality, that you have the right
people in place, the right documents, that you're financially prepared
and legally prepared should something happen. I know the name
of this show is Life Happens. Are you prepared? So
today we have two of our attorneys from pierre' connor
and Strauss with me. I have Dylan Newkirk here in studio.
(00:41):
Morning Dylan, Morning Lou, happy to be here, Great to
have you here. And Tom Morasco. Tommy, you're from the
New York City office. He's down in New York City
Fox and he's going to join us, give us the
downstate perspective and maybe even the Long Island perspective because
Tom works in our Manhattan office but lives on Right
(01:02):
and so are you prepared for the unexpected? That's kind
of today's theme. Is it healthcare? Is it long term care?
Is it financial? Do you have a will? If you
have a will, it's good. Do you have a trust?
If you have a trust, it's better. So we're going
to start out talking about a couple of documents, and
this is looking at planning for incapacity. If I have
(01:26):
an event, if I walk out the door and get
hit by that bus and I'm in the hospital, ain't
dead yet, but I can't manage my finances, I can't
take care of myself. I can't manage my healthcare. Who
steps in and who is the person that I want
to be making those decisions for me? And Tommy we
(01:47):
talk about this all the time with our clients. How
do you find the right people? How do you craft
a document that puts them in place and gives them
the power and authority that they need. And let's start
out with health care decision making. So when we talk
about healthcare decision making, we're thinking, Okay, I'm in a hospital,
I'm at home. I'm not able to make that critical decision.
(02:11):
Do I need a surgery? Do I need blood transfusion?
Do I need certain medications? If I'm not talking who's
talking for me?
Speaker 2 (02:18):
Tom, Well, the important thing here is that it needs
to be someone that you trust inherently, but also someone
that is familiar with your wishes, because the point of
having somebody there is not for them to impose what
it is that they would want. It's to think about
what you would want in that situation and to be
your mouthpiece.
Speaker 1 (02:38):
And so mouthpiece is an interesting words. That's what they
usually call us, is you know, when you go to court,
here's somebody's mouthpiece. That's your lawyer. But it's also true
in a hospital. It's true in a nursing home. It's
true in a healthcare setting when EMTs show up at
your house and there's a critical decision to be made.
And I'm going to introduce Dylan, who is the newest
(03:00):
attorney at Pierre, O'Connor and Strauss. And how long have
you been an attorney?
Speaker 3 (03:04):
Dylan officially about just over a month.
Speaker 1 (03:08):
Yeah, I thought you're gonna give you, you know, thirty days,
six hours, forty two minutes.
Speaker 3 (03:14):
It's been I think if I look at it, it's
been thirty three days.
Speaker 1 (03:18):
All right. So Dylan actually was a law clerk, worked
at or went to school at Albany Law School and
worked with our firm as a law clerk, and then
took the bar exam, passed the bar exam first time. Congratulations.
Still not everybody does that. And then when he got admitted,
started as an esquire and he has a big sign
on his office, says.
Speaker 3 (03:38):
Esquire says it it's official.
Speaker 1 (03:41):
It's official, Dylan, your fresh perspective yet on healthcare and
healthcare decision making as a young person. You know, you
don't really think too much about incapacity or events that happened.
But the law that we're going to talk about actually
has been developed through a series of cases involving young women.
(04:02):
I'll get to that in a second, But what's your
take on this?
Speaker 3 (04:06):
So obviously I am coming from the younger generation here.
Speaker 1 (04:11):
You know, what what letter are you? But I think
are you z?
Speaker 3 (04:17):
I'm right on the cusp. I'm not actually sure. Some
define it as millennial, some as gen Z. But at
this point, we don't really No one in my age
group is really talking about this unless maybe they've seen
it with a grandparent or a parent has has fallen
(04:38):
ill and at that point they're usually haven't gotten their
plan in place, and they call us when it's too late, unfortunately.
Speaker 1 (04:46):
And I've actually had attorneys go into the field of
trust and the states an elder law because of a grandparent.
A lot of people get drawn into this area because
they're you know, hey, you went to law school, great,
can you solve these problems. I got pulled into this
by my dad asking the same kinds of questions. So
what's your experience, yees?
Speaker 3 (05:07):
So I actually I'm very close with my grandparents myself,
and I mean they've helped me out through law school
and everything like that. And I was when I was
getting into this field, I was like, how can I
help them? How can I learn to best help my family?
And getting into this field, I feel like this is
(05:28):
the best way that I can help my family as
an attorney.
Speaker 1 (05:33):
And temmy it's an area of law that I find personally.
I've been doing it a while forty one years. That
is fulfilling in ways that when I did litigation, and
I did that early in my career, you just don't
get a satisfaction level like you do when you can
help a family through a crisis and you can help
them avoid a crisis by planning properly.
Speaker 2 (05:54):
Yeah, there's nothing truer than that, and some of the
best clause I've ever received. They were kind of two toned, right,
One was to say that, you know, a loved one
that they had passed, but how eternally grateful they were
of the help that we were able to provide them
because it set up everything for the future generations that
(06:16):
were to come, and they could not express enough appreciation
for that, And for me, that's the most gratifying call.
Speaker 1 (06:23):
Yeah, in the second half of the show, we're going
to get to asset protection planning, and that's a big
theme for our firm. How do you protect yourself? How
do you protect the assets that you've accumulated and worked
a lifetime for, and how do you protect them for yourself?
But then we focus a lot more now than I
did twenty thirty years ago on protecting them for the
next generation. And we'll talk about why as we get
(06:43):
to that. But let's go back to healthcare. The case
that gave rise to this issue was the case of
Nancy Cruizian and a young woman who was in a
persistent vegetative state and her parents wanted to remove artificial
life support, and that was something that there was a
(07:03):
conflict so there was litigation and they ended up removing
life support and she expired and they found that she
had no she'd been on the ventilator and on machines
for a very long time. They found that she had
no brain activity. So it's a very controversial issue, and
it's been litigated all the way up to the US
Supreme Court. It's been dealt with in Congress and by
(07:26):
the President over time, and in our firm. There are
two documents that we kind of have merged into one
to create I call it the script. So if you
want to have your life play out according to your wishes,
you want to be the script writer. You don't want
somebody else writing the script for you and saying, oh,
(07:48):
you're going to go over here and do this, and
if that's not what you want, you want to be
the author of that script. So, Tom, the two documents
that we've merged are called a healthcare proxy, and the
living will just talk about each of those and how
they work.
Speaker 2 (08:05):
Absolutely. So the healthcare proxy is the designation of an
agent to make medical decisions in the event that you're
unable to and you're incapacitated. So, as you were pointing
out earlier, the decision to go through a surch we're
in a transfusion or administration of some type of medicine,
and this is one person designated at a time to
serve in that role, whereas the living will is for
(08:28):
end of life decisions. If you're in a persistent vegetative state,
no cognitive function, no chance of recovering, it is the
direction that you make to state whether or not you
wish to persist in that situation or to withdraw any
type of life sustaining treatments, artificial life sustaining treatments.
Speaker 1 (08:49):
Yeah, and this area is complex because more and more
clients come into me. Maybe it's just me, but we'll
get your opinions too. If I'm in a condition where
I have dementia and I don't want to stay alive,
but you could have dementia for ten years and you
(09:10):
don't have any terminal illness that's going to take you out,
You're not being kept a library artificial means. So I
have more and more people that say I want I
have a client right now that wants to put in
her documents that she can go to Sweden and go
to one of the houses there that they allow you
to expire naturally of your own volition. And in the
(09:31):
US there are certain states California, Vermont, Oregon, not New
York yet that have something called aid in dying, But
for aid and dying, you've got to be competent. So
that's not what we're talking about here. We're not talking
about ending your life. We're not talking about anything like it.
(09:53):
Do not Resuscitate order a DNR, which says, if you die,
don't bring me back. That's a very different document. Most
people who are functioning well now don't want a dn R.
But the converse of that, or the inverse maybe is
if I'm in a situation where I am terminally ill
(10:13):
and I'm not going to recover and I don't have
any sentient life, there's no quality of life. Do I
want to be kept alive by tube feeding? Do I
want to be kept alive by a ventilator, by artificial
nutrition hydration? All of those issues go into this document,
and we want our clients to think about this very
(10:34):
carefully because it's a very sensitive decision. And if you've
ever been in the position of that decision maker I
have on twit's two family members, and so if you're
in that seat. Having clear guidance is so important, and Dylan,
clear guidance as a young person is very important all
(10:54):
the way along the line. But when you can have
your client's draft documents that that next generation, who those
decision makers are, and then what their responsibilities are and
what your wishes are writing that script, that's so important.
Speaker 3 (11:09):
It really is, especially when you get into the different generations.
Each have different values, and depending on the generation and
your values, you might think that acting a certain way
is better for the individual who may be incapacitated. They
may want to keep artificial means or they don't want
(11:32):
it while you do. And it's extremely important to have
those instructions so you know what to do.
Speaker 1 (11:40):
So we have a healthcare decision making guide at Pierre
O'Connor and Strauss. We have a guide for just about everything.
So our healthcare decision making guide goes through the healthcare proxy,
the living will, that do not resuscitate order, something called
a medical order for life sustaining treatment. The most gives
a little bit of the history, and in our firm,
we are believers strongly in the healthcare proxy and the
(12:03):
healthcare declaration or living will being together in one document.
So that's how we approach it. You can get our
Healthcare Decision Making Guide, along with our State Planning Guide,
or our Medicaid Guide or any of our other guides
on our website at Pyerrolaw dot com go to resources.
We're happy to provide those free of charge to you again,
Pierolaw dot com. The Healthcare Decision Making Guide. Next up,
(12:25):
we're gonna come back after a short break and talk
about financial decision making. If I'm in at coma, if
I get hit by that bus, Who's paying my bills,
Who's managing my assets, Who's making sure that everything I
have is protected during that time period. You're listening to
the Life Happens Radio because you know what life happens.
Be prepared. We'll be back right after this big and
(12:52):
welcome back to Life Happens Radio. I am Lupiro, your
host for this morning, and we are talking about planning
and getting people in place with the right documents, the
right powers, so that when life happens, you are prepared.
We talked about a healthcare proxy, and I just again
want to point out that we have guides available on
a state planning, on long term care planning, Medicaid, on
(13:16):
Guardianship on Business Planning, business succession Planning, and the Healthcare
Planning Guide. All of those are available. We produce them
in house. These are not things we buy online. They're
not AI generated. There are things that we have worked
on over the years and keep updating and fine tuning.
The twenty twenty five Estate Planning Guide is hot off
(13:37):
the press, so go to purolaw dot com. That's p
I E R R O l a W dot com
and avail yourself for the resources. We think education is important.
We do it in writing, we do webinars, we do seminars.
So keep tabs on us on that website to see
what the future events are and kit the guides because
(13:58):
they will give you an education. And a lot of
people just go to Google. You know, that's kind of
natural and dal in your generation googles everything, of course,
and so it's amazing what you can find on Google.
You can do a lot of actual legal research on Google,
get statutes and cases and things. But the guides are
are nuanced and it's all for New York law. So
(14:21):
what do you think about the googling of of all
of this information?
Speaker 3 (14:27):
I mean, that is that is my generation? Uh maybe
not even just my generation at this point doing doing
the googling. But you do that, and if you've googled
a state planning and lately, you're going to find a
bunch of a bunch of stuff that it's going to
(14:47):
be convoluted and tough to understand unless someone can explain
it to you in a reasonable manner and go through
the nuances of each different situation.
Speaker 1 (15:00):
Yeah, And we try to do that in these guides
and try to make it personal to you so that
when you come in to meet with us. And the
process for state planning is we send you a link
to a site where you put in your information everything
you want us to see, which is everything, because we
want to have a full set of information about you,
(15:22):
your family, your assets, what it is that you do.
So we have an online questionnaire which our clients fill
out before they come and meet with us, and it
gives us a great start to a meeting. We know
and immediately what your family is, the children, decision makers,
what your assets are beneficiaries. So all of that is
(15:44):
the start of the process, and then we start asking, Okay,
who are your healthcare agents? In the healthcare proxy, Tom,
they don't allow you more than one agent. I just
want to point that out. Now, these documents have different
ways to fill them out. A lot of attorneys get
this wrong in a point two or three healthcare agents,
and that creates a tremendous problem when you go to
(16:06):
the hospital.
Speaker 2 (16:08):
Yeah there's New York is not permit for that, and
it's specifically for that reason. In case there's an emergency
and something needs to be done, the last thing we
need is having two conflicting views as to what should
be done. So you're always designated one agent at a time,
but you are able to name successors. So in the
(16:28):
event that the first name agent is unable to act
for whatever reason or is unavailable done, your successor would
step in.
Speaker 1 (16:36):
And you know, people will say, oh, you know, my
parents are already in their sixties. That's like I'm in
my safety. So I'm a boomer and that's what my
kids say, Okay, boomer, Well what are you, Tommy? What
generation are you in? And I've been doing a lot
(16:57):
of research on the generational differences because I'm an employe,
and you know, treating gen z like you treat boomers
is a complete mistake. So everybody has unique preferences in
how they work and things like that. What is your generation.
Speaker 2 (17:13):
I'm actually millennial, but I'm on the earlier end of
the millennial, more towards the start of the millennial generation.
Speaker 1 (17:20):
Right, So how long you've been practicing TOM.
Speaker 2 (17:24):
Over ten years now, that's great.
Speaker 1 (17:26):
And so healthcare proxies, living wells combined document healthcare decision
making one agent at a time. Let's flip to the
power of attorney and talk about financial decision making. And
here you can actually have multiple agents. So if you
have three kids and you don't want to cut any
(17:47):
of them out, you can make all three children the
agents under your power of attorney, and if you really
want to screw up their lives, make them all agree
on every decision. So you have the option of having
two or more agents act jointly where they have to
(18:07):
agree on everything, or separately so that any one of
the two or three people could act. We try not
to put four people on because that just gets to
be a circus. So two is good, three is okay.
We don't trip typically go above that, but you always,
again TOM, have alternates on there. So if your primary
agents aren't available, you have secondary tertiary agents, and you
(18:31):
can put older people in as long as you have
backups that are younger. So a lot of clients miss that.
I say, I'm not going to appoint my parents because
you know they're only going to live another twenty years.
Well during that twenty year time, they could make decisions
for you. Just put somebody in behind them as an alternate,
and that allows them to act, but then have the
(18:54):
backup so that if they are not available for any reason,
you've got a decision maker.
Speaker 2 (19:01):
That's very true. I mean, the whole point of an
estate plan is fluidity and flexibility, and it's supposed to
grow with you as you age and your circumstances change,
and sometimes we don't always get that second opportunity to
go in and make a change. So the way that
we draft and we prepare our documents is we try
to account for those contingencies. We always want to have
(19:22):
a plan in place. So you shouldn't be hesitant if
there is somebody who's available now, because truth be told,
that the name of the show life happens. There's nothing
to say that something couldn't happen today or tomorrow. And
if that first person would be your parents, then there's
no reason why not to have them, as you said,
provided that in the event they weren't able to, we
do have a succession plan in place.
Speaker 1 (19:45):
Yeah, So when clients walk out of a consult with
us there, they're typically say it came in for a
sip of water and felt like I'm drinking out of
a fire hose. You know, they're exhausted because we drilled
down on all of these questions. What if that person's
not available, what if this person is not available, Who
are your beneficiaries going to be? What if they have
(20:05):
a disability? All of the questions that we drill into
and have very deep discussions on before we put pen
to paper and start drafting a document. It's very important
to ask all of those questions. So in the Power
of Attorney Tommy, there are some powers that are standard
and other powers that need to be considered and added.
In our Power of Attorney form. A lot of clients
(20:27):
call up and say, well, do I really need a
lawyer to do a power of attorney? Do I really
need a lawyer to do a healthcare proxy and a living will?
And the answer is, you know, try it, take your shot,
but more often than not they get it wrong. And
so what are some of the things that people should
be thinking about to put into that power of attorney
so that their agents have the ability to do things
(20:48):
on their behalf.
Speaker 2 (20:50):
That's a great point. And just to circle back to
what we're talking about before with googling, and sometimes it
could be convoluted, but conversely sometimes so simple fine, and
a lot of the times that's where things have missed.
So one of the things I've seen that when we
try to do the do it yourself kind of a
power of attorney and they grab the short form from
the New York site. The gifting powers, which is tremendous,
(21:15):
are often overlooked or they're not even considered. And I
had a great teacher once say, your eyes don't see
what your mind doesn't know, and you do not simply
know what it is that you should be looking for.
And with gifting powers, we don't expand on what is there.
As a matter of default, you're going to be limited
to making transactions in the Europe and the amount of
(21:37):
five thousand dollars. Now, if I'm dealing with an older
loved one and we're trying to consider medicaid planning and
they have assets that are in the tens of thousands.
How am I supposed to rely on that power of
attorney to move and put the plan in place in
order to get them to help they need And the
answer is I can't. And that's where we have the
biggest bit fault.
Speaker 1 (21:56):
Yeap, Dylan. One of the areas you're working on in
the firm is with Frank coming on the Medicaid side,
and we see this on the Medicaid planning side all
the time, where clients come in and now they've lost capacity,
they've had a stroke, they've had an illness, they're diagnosed
with dimension lost capacity, and they bring in their powers
of attorney if they can find them. They were done
twenty thirty years ago, done by their real estate lawyer,
(22:19):
and they're just not adequate.
Speaker 3 (22:22):
Yeah. Unfortunately, a lot of the power of attorneys that
come in that we see maybe come from different lawyers
or was a DIY job. But if you if it
did not come from a bona fide estate planning attorney,
they almost always are missing those gifting powers, and especially
(22:42):
with the older with the older power of attorneys, I
just saw one for the first time that they didn't
even have the statutory gift rider on it, which was
another piece of paper you had to actually catch at
the end.
Speaker 1 (22:56):
The other thing is the statute for power attorney has
changed over the years career. It's changed four or five times,
so healthcare proxy, power of attorney. Make sure it's drafted thoroughly.
Make sure you have alternate agents power attorney. You can
have co agents. Make sure it includes gifting powers that
are well considered, well thought out. Consider your digital assets.
(23:17):
A lot of people don't think that they have digital assets,
but they do, so we draft those contingencies in if
you want your pets to be taken care of, we
put those so you need to think about these documents, folks,
in a comprehensive way, and we try to do that.
Our guides are a great way to get started with
the information, but the best way to close this is
to come in for a consultation. We're going to take
(23:39):
a break for the news. When we come back, we're
going to unravel wills, trusts and a Dora. So stay
with us. You're listening to Life Happens Radio on Talk
Radio WGY. Be right back after the news and we
are back to Life Happens Radio. Hope you're all doing well,
staying warm, enjoying your Saturday, and we're here in studio
(24:02):
talking about a state planning, long term care, planning, all
the things that you need to think about to make
sure that you have the preparation necessary to succeed and
succeed through not just good times, but through bad times
as well. We all could do it if we're on
top of the game, on top of our careers, you know,
(24:22):
stockpiling money, in control of everything and every decision that
we have. But life isn't that simple, and it's not
a straight line. So when you get that curveball thrown
at you and you can't hit it, and you get
a diagnosis that you don't expect, you get an accident
that you have never contemplated, you get divorced, you have
(24:43):
issues with family members. All of these things come into
play and we need to be prepared for them. So
today we're talking about planning documents. We started with a
healthcare proxy and a whole panoply of documents that are
available to you in our office. It's primarily healthcare proxy
and living will in a combined document. We talked about
powers of attorney, making sure you go beyond just the
(25:06):
statutory basics of the statutory form is about three pages,
our forum is about fifteen. So we'd modify that document
substantially to make sure that our clients needs are satisfied.
And folks, we do the back end of this too.
They call it litigation. If you don't have the right documents,
healthcare decision makers in place, you don't have an agent
(25:26):
under a power of attorney in place, you have no
one to make decisions for you, and somebody has to
go through a whole court process called guardianship. We talk
about that on this show as well. It's a big
part of our practice, litigation, trust in the States, and guardianship. Unfortunately,
it happens, life happens, litigation happens, but being planned in
advance and having a comprehensive plan, power attorney, healthcare proxy.
(25:49):
The next piece of it is a will, because when
we die, we want to make sure that our property
goes to the people that we choose. Not According to
New York state law, if you want to leave your
hands your property in the hands of the state legislature,
you can do nothing. But if you want to take
control and write your own script and know who it's
going to, how it's going to them, et cetera. You
want to at least have a will. We're gonna talk
(26:12):
about trusts in a moment, but tom the will is
a document. In my career, it was what we did.
I tell this story to our young associates like Dylan
all the time. When I started practice, guess what, in
nineteen eighty three, there were no computers. There was nothing
that you could do word processing on. It was a
typewriter and it was onion skin paper in the beginning,
(26:35):
so wills were shorter than they or two pages because
you didn't want to have to change anything. And word
processing kind of revolutionize this. And I called the IBM Selectric,
which was a ball typewriter with a white out capability.
That was like revolutionary in its day. But now we
have word processing, we can we can do so many
(26:55):
different things with documents and maintain them and change them
and modify them. When you get to a will, you
want to make sure you have it up to date.
You want to make sure you have certain things in place.
What are those things, Tommy?
Speaker 2 (27:07):
So we need to first make sure that you have
the right person in place. Just as any other document,
you need to have somebody appointed as what is known
as your executor. That's the person who's going to be
managing your estate, collecting your assets, distributing them, pursuing to
the wishes that are in your will. Then also we
need to consider who our beneficiaries are going to be,
and as we were talking about before, there always needs
(27:29):
to be a backup plan, so whether it's for the
people we're appointing to take care of our affairs or
the people that we're leaving behind too. We also have
our contingencies in place, but that also goes a bit
beyond just naming an individual. That's also considering their circumstances
and what their circumstances are today may not be what
they are at the time that they are going to inherit,
(27:51):
so making sure that you provide for contingencies such as
disability or the applying for or receiving government benefits, or
even the potential inheritance for a minor So there are
multiple things that should be considered and go into this
world and make sure that not only that your wishes
are upheld, but also you're considering the lives of those
(28:11):
who it is that you're putting in place under that will.
Speaker 1 (28:15):
So the power of attorney in healthcare proxy operate while
you're alive, but they terminate upon your death, and the
power attorney is the document takes care of property and
the will is what picks up after you're gone. But Dylan,
you had the ability to learn in the surrogates court,
you clerked in the surrogates court here in Albany County.
(28:35):
You now practice in the probate area. Probate's no picnic, No,
it is not.
Speaker 3 (28:40):
It's one thing a lot of people don't realize is
that probate it's a year long process, at least at
least a year long process when you get into it.
At the start of it, you've got to come up
with and find all the assets, the liabilities. You have
to petition the cour or to appoint you as executor
(29:02):
and to prove that the will is in fact valid,
and then there's a waiting period afterwards where you can't
distribute or really do much of anything until the creditor
period has closed yep, which is seven months long.
Speaker 1 (29:18):
So when someone dies, a lot of people are under
the misconception that you have a will, you have an executor,
that will can just be taken to the bank and say, okay,
I'm the executor, I just want to distribute these assets.
That's not how it works. When you have a will,
it has to go through a court process. Probate is
the court process. You have to get jurisdiction over the
(29:39):
necessary parties. So the people who are your natural heirs
we call them distributees. The people who are named in
the will we call them legates, and we have to
get waivers of citation or notice is served on them,
and if they don't, if they don't comply, we have
to serve them with process, meaning we have to hire
a process server to personally serve them and give them
(30:00):
a court date, a citation return date when they can
come back in and just raise their hand and say,
I want to examine the witnesses to this will. I
don't think it's a valid will. They're entitled to that
hearing as a matter of right. So while all this
is going on, your executor has no power, no juice,
they don't have any authority. Until the court says, okay,
(30:21):
all of these things, we determine the will is valid.
We have jurisdiction over everyone. We're going to issue a
court order declaring that the will is admitted to provate
and then they're going to issue a certificate and that's
the ticket for the executor to go out, and that's
called letters testamentary and Dylan. Until they get letters testamentary,
they can't do a thing.
Speaker 3 (30:40):
No, Unfortunately, they can't bank accounts, sit their bills at
times go unpaid. And that's really the struggle is getting
to those letters to give the executor the authority to act.
Speaker 1 (30:55):
Yeah, I'll give you a perfect example. I don't do
this often. I had a client who just didn't really
have anybody else so wanted me to be their power
of attorney and their executor. And he was about to
sell his house. He was actually moving into an apartment
and just wanted to get some cash and pay the
mortgage off. And there was no liquidity in the estate,
you know. And we were going to close on the house,
(31:17):
and we had a closing date and I was going
to close it by power of attorney and he would
get whatever was left of the proceeds. Three days before
the closing, he died. So my power of attorney's gone.
Now I can't use the power of attorney. The buyer said, okay,
we need to now probate the will. Well, he didn't
have any parents. They had died, his siblings had died,
so I'm chasing, you know, niece's nephew's brother sisters to
(31:39):
try to get these waivers of citation serve so I
could get it. And the interest rates changed and the
buyer walked, so we lost to sale the house. We
had to go into a short sale situation. And you
face those risks when you don't have control over assets
and you have this delay period of probate and Tom
the will is a necessary document, but there are things
(32:00):
that we can do better.
Speaker 2 (32:03):
That's absolutely true. And just as just as a follow
up point to what you said, during that time where
you're sitting on that real estate, all the carrying costs
are still accruing real estate taxes, utility. So that's another
thing to keep in mind. So one way we avoid
that is through a trust. Now it trust is a
document that works in a similar fashion to a will, However,
(32:25):
it avoids the whole probate process. It is independent from
the probate process. So if we are able to in
that situation, Lou, if that weren't in the trust, then
you are the appointed trustee. Even with the unfortunate death
and the timing of it, you still would have been
able to go through with the deal. So it is.
It is a tremendous tool in the estate planning ourselves.
Speaker 1 (32:48):
Yeah, trusts have a lot of uses, a lot of motivation,
and in fact, for the rest of this show, for
the rest of the morning, we're going to talk about
trusts because I call it the Swiss army knife. You know,
what do you need? I want to protect my kids,
Well that's this blade here. Well, I want to protect
from medicaid. Well that's that blade over there. Well, I
want to avoid probate. All of the things that you
(33:09):
do to achieve these goals and to achieve your planning goals,
most of that happens through a trust. And we've been
proponents of trusts for my whole career, long before the
bar kind of flipped to be a trust practice that
was primarily a will practice. We've been doing revocable living
trusts and they used to look at me like I
(33:29):
had three heads, what do you need to trust for what?
And now it's like, how can you live without a trust?
So it's come full circle. I feel vindicated in my
opinion trusts early on in my career, but when we're
talking about probate. You're right, my client, that house could
(33:49):
have closed on the closing date because my power as
trustee transcends death. I'm a trustee while they're alive, and
I'm the trustee and they're deceased, and I have the
ability to handle trust assets without having to go through
that court process. And Dylan, you're working with a lot
of our clients in their probatea states. They're paying us
(34:13):
to do that. So there are a lot of steps
that have to be taken. And people say, well, why
why do I have to pay so much? Well, this
is what a probate proceeding is. And the court needs
to see these documents. We need to serve these people,
we need to get jurisdiction over all these people, and
those costs can mount.
Speaker 3 (34:31):
Those costs do add up. For example, I have my
first court date coming up this tth coming we so.
Speaker 1 (34:40):
Dylan's going to court, Tommy, no boy, I sure, am.
Speaker 3 (34:45):
Court costs money. There's filing fees. For example, you got
to pay for the time for me to get down
to the court and to sit in the court while
they read off all the all the cases for the day.
There's there's documents that need to be produced, they need
to be given to the court, and the court needs
to scrutinize them. That all takes time.
Speaker 1 (35:08):
Yeah, I tell my clients, if you knew what you
were doing, you would never inflict probate a upon your
family or guardianship. It's just very shortsighted. So, Tom, in
our most basic trust, the revocable living trust, talk about
who the parties are to that and how does the
(35:28):
trust work. And in a revocable trust situation, who are
the parties.
Speaker 2 (35:33):
So the way that it's structured is that there is
the grand tour of the trust, who is the creator
of the trust. So if you're establishing the trust, you
are what is known as the grand tour. But also
in a revocable trust setting, you are serving as your
own trustees as well. Now, the revocable trust is extremely flexible.
Think of it as another extension of yourself. You have
(35:54):
the ability to always go back in, change, modify, or
even cancel the trust if necessary. The parties are always
going to be the person who's establishing it, the trustee
who's going to be operating it. So in the estate
you have your executor and the trust, you have the trustee,
and then you have successors always because in the event
that I, as the establisher of this trust becoming capacitated,
(36:18):
I have people who are designated to step in. And
also in the event of my death, there are people
there to take over my place. And then also we
name similar in the will beneficiaries and back up beneficiaries
as well.
Speaker 1 (36:32):
So back to our decision of who and how many
we have in the healthcare proxy, it can only be one.
There's another document we're going to mention, the disposition of
remains appointment. It can only be one. But a power
of attorney, a trust, and a will can all be
multiple agents coagents. They can act separately or jointly. So
(36:52):
very often when we line up these documents, the powers
are going to be very similar, especially in the trust
and the power of attorney. And when you have a trust,
most of your assets go into that trust and get retitled.
We call it the trust funding process. So your home,
your bank accounts, your brokerage accounts. But there's one major
asset class that does not get retitled, tom.
Speaker 2 (37:14):
And that is your retirement accounts.
Speaker 1 (37:17):
Absolutely iras, which is in many clients portfolios. That's the
majority of their wealth. I just met with clients, very fortunate,
great jobs. She had a great that's the wife that
had six million in four oh one k. The husband
we had to put all the other assets in his
name to balance it out because we were doing some
state tax planning, and that four oh one k can't
(37:40):
go into the trust. So how do we deal with that?
If we can't transfer the asset, can't transfer the IRA,
how do you put that into the estate plan?
Speaker 2 (37:50):
So that we have to then consider who our beneficiaries
are and updating the designations of who those beneficiaries are
in order to make sure that it goes to whom
we want and also how we want it because there
are very special rules as to the distribution of retirement assets.
Speaker 1 (38:07):
Yeah, it's one of the most complicated areas that we
deal with. And there is a new law that I'll
call it new five years, the Secure Act, which actually
passed in twenty twenty, but final regulations didn't come out
until October of twenty four and so now we actually
have the final rules as to how these accounts work.
But for most beneficiaries like children, there's a ten year rule,
(38:29):
so you have to drain. In this case, the kids
would have to drain a six million dollar account over
ten years and pay all the income tax on it.
Under the old rules, you could stretch it out for
a lifetime. So we have to integrate those retirement plan
benefits into trusts very very carefully. And there are certain
trust beneficiaries who don't have to do the ten year
(38:52):
rule who are able to do a lifetime payout. And
those are beneficiaries who are special needs individuals, ronically ill individuals,
someone ten years or less younger than you, so in
your same generation they could get a lifetime stretch, or
a spouse if they don't do a spousal rollover, they
can still get a lifetime stretch. So those are the
(39:14):
four exception beneficiaries edbs. We call them exception designated beneficiaries,
and those are the people that we can stretch the IRA. So, folks,
when we sit down with clients and we're looking at
their portfolio and we're looking at all of their assets
and their trust, we are really looking very closely at
how we name specific assets to specific beneficiaries in specific proportions.
(39:40):
And retirement accounts are some of the hardest things to
deal with, but if you do it, properly, you can
get some of the biggest benefits. And just to throw
this out there, Tommy, we do tax planning as part
of all this. The estate tax thresholder for New York
is about seven million, little over seven point one six
and federally it's about fourteen or thirteen point t nine
to nine million, So seven and fourteen. Most clients aren't
(40:05):
taxable from an a state tax perspective, But in New
York there's a big penalty for going over that seven
point one six million, and they call it the cliff,
and you don't want to go over the cliff. And
what the heck is the cliff anyway, tom And that cliff.
Speaker 2 (40:21):
Is that once you've exceeded the one hundred and five
percent of what the exemption amount is, rather than just
being taxed on the difference between the exemption amount and
your actual true assets, the actual tax ends up being
on the entirety of your estate, which would cost hundreds
of thousands of dollars in that event.
Speaker 1 (40:42):
Yeah, So we're going to take another short break last
one of the show. When we come back, we're going
to go from powers of Attorney, healthcare proxies, wills revocable
trusts into the world of irrevocable trusts and asset protection
and tax planning. So stay with us. You're not going
to want to miss the section about protecting your assets
if you ever need long term care and protecting assets
(41:03):
for your kids. We have something called the Beneficiary Control
Trust that you're not going to want to miss. So
stay with us. We'll be back right after this short
break and we're back to Life Happens Radio. Thank you
for joining us this morning. I'm Lupiro, your host, and
I am in studio with Dylan Nwkirk, one of the associates,
(41:26):
one of the Young Legal Eagles if you remember that show,
and Tom Barrasco, who is down in our New York
City office. Tommy is one of our young attorneys. He's
been out about ten years. Dylan's been out about a month,
so I've been out over forty. So we have enough experience,
I think, to get through this conversation. We've been talking
about powers of attorney, healthcare proxies, wills, trusts, and now
(41:48):
we're at the point in time where we're looking at
asset protection so important. So many clients come in and say, well,
you know, what are the costs that I could face.
What is life happening if I have a sudden illness
and I have to go to assistant living or I
have to go to a nursing home, or I try
to get home health care. This is an area that
FOLKS is going to be evolving rapidly because the budget
(42:10):
cuts that are being proposed in Washington right now are
drastic cuts to Medicaid. Cuts to medicare the programs that
people rely on. And it's tough now to get the
help you need, but gonna get tougher, I'm afraid. So
doing asset protection planning is so important. And the trust
that we're going to talk about now is a trust
(42:33):
that we call the Medicaid Asset Protection Trust. Now, Medicaid
and asset protection. How does this work? How can I
take my assets and when it comes time to apply
for Medicaid, which is a program that only allows me
to keep about thirty one thousand dollars total, how can
I protect my other assets so that I have them
available to pay for my retirement over time? But still
(42:56):
if I do need care, and that care in our
area right now is costing about sixteen thousand dollars a
month per month folks, not a year per month, so
your year up, you know, pushing two hundred thousand dollars
a year Tom on Long Island. I think it's even
a little more expensive.
Speaker 2 (43:12):
Yeah, it's almost twenty.
Speaker 1 (43:14):
Two So two hundred and forty thousand dollars a year
to pay for a nursing home where you don't want
to be. So Medicaid is the only program that will
protect it. So we have a specific trust that we
design and we lay it out for our clients. We
draw you a picture of flow chart as to how
your assets play out and temmy, this is a lot
more flexible and you you had a great turn of
(43:36):
a phrase earlier, the flexibility of these trusts. People don't
really understand.
Speaker 2 (43:43):
It's true and roles and Medicaid as to protection. Trust
is what is known as an irrevocable trust. Sometimes we
have a lot of pushback from clients because just of
the perception, oh, it's irrevocable, and there's also different there.
There's also some specific rules and different is that distinguishes
it from the revocable trust. So whereas on a revocable trust,
(44:04):
you as the creator of the trust, are also able
to serve as a trustee in a Medicaid asset protection trust,
you are not able to so immediately people think, oh,
I'm losing control over these assets. But what's important to
remember with these particular trusts, Lou, as you said, with
the flexibility, there are certain powers that you do retain.
One of them is naming who your trustees are, and
(44:27):
second is also being able to change and update beneficiary
is when necessary. And Lou, you were saying, well, what
happens if we need to have access to, you know,
continuing support. How do I resolve that with these assets?
I'm putting this into a trust because part of the
crucial aspect of this trust is that the principle of
(44:49):
that trust cannot be made available to you directly. And
that's usually where we get the most hang up.
Speaker 1 (44:53):
It's a one way street, right and diagram. We have
the ability to take the trust and put it over
on the right side of the page and put our
home in there, and you don't really lose access to
the home. You have a life estate or life use
of the home, so nobody can tinker with that. So
you put your home in there and that's protected. You
(45:14):
can put brokerage accounts, bank accounts life, insurance policies, annuities, businesses,
other real estate all can go into this trust. On
the left side of the page, you have your retirement accounts,
your IRA's, your four to one k's, because remember, we
don't put those in trust for tax reasons, but in
this context, we don't have to put them in trust
(45:35):
for medicaid reasons because they're exempt. And tom this is
a big piece that most people miss.
Speaker 2 (45:43):
It's true. So everyone they like you said, a lot
of their biggest assets, whether if it's not a home,
it's a retirement account. But the principal value provided that
the retirement account is in payout status, So the only
portion that they're looking at for medicaid purposes is the
income that is derived from the tirement account. You're required
minimum distributions.
Speaker 1 (46:03):
So in this diagram, picture it in your mind. On
the left, you got to circle with your retirement accounts.
Those are yours. You can take money out of those anytime.
In the middle of you and we leave you with
enough liquidity, enough bank accounts and other assets that you're
comfortable you don't have to run anywhere to get money.
A lot of people think, oh, I have to run
to my trust and ask my kids, No, you have
(46:24):
plenty of access to capital. We're going to make sure
of that. And then on the right is your Medicaid
asset protection trust where you put all these other things in.
You can name trustees and change trustees. You can name
beneficiaries and change beneficiaries, and your beneficiaries couldn't get money
out of that trust during your lifetime. So your trustee,
you could hand money to your kids and they can
(46:45):
put it in an account and there's no restriction on
what the kids do with that money. They can use
it back, help you pay your bills. And if they don't,
what do you do tom.
Speaker 2 (46:56):
You remove them as trustee and then beneficiary you.
Speaker 1 (46:59):
Say you're fired. That's right, so you have the pleasure
of firing your children. So that's the Medicaid ass a
protection trust. I will just throw on that. When we
create a trust revocable or Medicaid ass protection or other
type of trust, we try not to let that trust
end because it can create tremendous value for the kids
by just carving up the trust into as many children
(47:21):
as you have, and they get what's called a beneficiary
control trust. We are about out of time, Dylan, Thanks
for joining me today, Tommy, thanks for joining us from
New York City, and thank you for listening today. We'll
be back next week with Life Happens Radio.
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