Life Happens 05-31

Episode Transcript

Speaker 1 (00:00):
Thy fate is the common fate of all.

Speaker 2 (00:03):
Into each life, some rain must fall, some days must
be dark and dreary. And if you live in the
Capitol District, that day is Saturday. It has rained every
Saturday since November. So if you look out your window
and you're just waking up, yeah it's raining. And into
every life, a little rain must fall. The name of

(00:24):
the show is life Happens. And so when that rain falls,
what we want you to have is an umbrella, a raincoat,
and to be totally prepared for whatever comes your way.
And to this morning, I'm very happy to have with
me one of my associates, Tomaso Morasco, who's coming to
us live from Long Island, New York.

Speaker 3 (00:44):
Good morning, time, Good morning, Lou, Thank you for having.

Speaker 2 (00:47):
Me and Henry Wadsworth Longfellow. I thought was appropriate to
kick off this morning because man, it just keeps raining
every weekend. You try to play golf, tennis, whatever you
want to do. Get outside, go for a hike, go
for a walk. And we've been facing a lot of rain.
I don't know what you got on Long Island today,
but that you know, just pouring out.

Speaker 3 (01:09):
Yeah.

Speaker 4 (01:09):
Yeah, we had a torrential downpour overnight and we're about
we're supposed to get hit with it some more in
a little while, so I guess we'll see.

Speaker 2 (01:17):
Yeah, So today's show is going to talk about building
an arc. I'm just going to keep going with you now.
So we're going to build an arc for our family
so that when the rain pours down, we're protected, and
when the rain stops, we'll have a family that is
well protected. And the theme, Tom is to talk about

(01:41):
next generation planning, and we'll touch on planning for the
client themselves. Whether you're thirty, fifty, eighty, one hundred and two,
you need a plan for yourself. But when do you
start thinking about that plan becoming a plan not just
for you, but for the next generation. And I know

(02:03):
that the first time I thought about that, Tom, and
I'm sure you had these thoughts is in the hospital
when my daughter was born, my first born, and the
doctor handed my daughter to me, and it's like, I
am responsible.

Speaker 1 (02:20):
Yeah, for that life. M h, I don't know. Did
you have something similar to that.

Speaker 4 (02:25):
Yeah, the second my son was born, my first born,
similar thought. I was like, Wow, this is a totally
totally different, uncharted waters and that's all you think about.
It's like, well, what do I need to do next?
How do I be prepared? How can I be the
best father?

Speaker 3 (02:41):
Right?

Speaker 2 (02:42):
So absolutely, and we're gonna start off with that kind
of thinking about protecting our children when they're young. But
as our children grow that doesn't mean we need to
stop thinking about it. And when they get to a
point in their lives where they have, yeah, their lives
have become as complicated it as ours life is complicated.

(03:03):
We want to make sure that we're thinking not just
for us, but downstream to the children, the grandchildren, and
these plans we do intergenerational planning that can go all
the way down and keep trusts intact, and that will
get into maybe in the second half of the show.
Keeping trusts intact generation over generation so that family wealth

(03:26):
can be protected, can be growing generation over generation, and
can be available to help put the next generations through college,
to help them buy homes, to help them succeed in
opening their own businesses.

Speaker 1 (03:41):
All the things that you need to.

Speaker 2 (03:43):
Have capital available for during your lifetime could be done
through solid trust planning.

Speaker 1 (03:50):
And we are going to open up the phone lines
this morning.

Speaker 2 (03:52):
We're going to take calls so I'm going to put
the number out there right now, so if you want
to give us a buzz, Tom Rasco Lupiro from Piero
Connorance Drause, We're going to talk about estate planning, but
we'll take your questions on almost almost anything.

Speaker 1 (04:06):
Whether the Knicks are gonna win.

Speaker 3 (04:07):
Tonight, let's hope, let's hope.

Speaker 1 (04:11):
You know it's it's all good.

Speaker 2 (04:12):
So it's eight hundred eight two five five nine four
nine again, eight hundred eight two five fifty nine forty nine.
That's eight hundred talk wgy. So Tom, let's start at
the very beginning. And I used to do a sound
effect for this over the years, and that is, we

(04:34):
have a new baby, and we're gonna plan, and what
are the things that you as a dad a of
a young child think about, and what you think about
for your clients.

Speaker 4 (04:46):
So honestly, I know this it might sound a little dark,
but the first thing I thought in my head was like, Okay,
this is my responsibility, this is what I'm gonna do.
But what happens if God forbid, something happened to me?
Who is gonna take care of my child? Who am
I going to put in charge? How do I do
that right. Thankfully, being in the field that we're in,
I have those answers. A lot of people don't, So

(05:09):
sometimes people don't want to think that way, and I
can understand that's not really a pleasant thought. But at
the end of the day, we need to be realistic.
And as the name of our show is, life Happens.
We've all heard stories, right, So first thing I tell
any new parent is that you need to have a plan.
I don't care if you don't have any assets or
if you feel like you're not in a situation in

(05:30):
your life where you think or believe that you need one.
If you have a child, you certainly need to have
a plan.

Speaker 2 (05:37):
So most people at you know you have kids in
your twenties, thirties, forties, or you know, if you're de
Niro and Paccino seven, but they're in different positions. But
when let's you're a thirty year old, you have your
firstborn and you're looking at it and saying, Okay, I'm
I'm working my tail off at a job that pays

(05:59):
me well but doesn't pay me enough really to pay
if I can't save enough quickly enough pay for college tuition,
which if you have a new baby today, That college
tuition right now is approaching six figures at some of
the academic institutions, ninety thousand a year. By the time

(06:21):
that child grows, it's going off about ten percent a year.
You're looking at one hundred and forty hundred and fifty
thousand dollars a year for college if it keeps going
at the current rate. How do you have enough money
set aside when you're just starting your career. You may
have student loans, you may have just bought a house,
and you have a mortgage. How do you get enough
money set aside so that if something happens to you,
that life event happens to you and you have a

(06:43):
premature death, you get in that accident, or you have
that illness, how do you put enough cash aside?

Speaker 3 (06:49):
The first thing I did was purchase life insurance.

Speaker 1 (06:52):
There you go, just talk about that.

Speaker 2 (06:54):
What kinds of policies do most people look for when
they're in that position?

Speaker 4 (06:58):
Yeah, so, especially when you're in a younger position, as
you said, you have a lot of liabilities over assets
at that point in time. Are there's term life insurance,
which is a lot more of an affordable plan. It's
call it a pay as you go plan, but they
have several different options available, and if you are young,

(07:19):
let's say reasonably well healthy, then they're very, very reachable
and attainable, and that's certainly where we would start.

Speaker 2 (07:29):
Absolutely, term policies at thirty years old are pennies on
the dollar and you can buy a million dollars two
million dollars of coverage so that you set aside enough
money to have that fund. But then we have to
think about tom if something happened and you die at
age thirty, where does that million dollars go? How does

(07:49):
it get managed?

Speaker 3 (07:50):
Correct?

Speaker 4 (07:52):
So that's where we talk about our trust planning and
our estate planning. That's the second integral part of all
of this.

Speaker 1 (08:00):
And most people are doing wills at that point.

Speaker 2 (08:02):
So what are the essentials in a will when you're
just starting out, when you have young children. You're going
to buy that term life insurance policy to make sure
you've covered that base you're planning for retirement. But it
takes time, you know, time in the market, not timing
the market. We hear that all over the place on
this channel. Yeah, and so it's going to take time

(08:23):
to do that. So how do we put that life
insurance in place, and what are we looking for in
the will to protect our loved ones.

Speaker 4 (08:31):
So the main thing is, aside from making sure we
know who we're going to designate to be in charge
of everything, but the vehicle in which it's going to
pass to our loved ones. Now, a lot of the
times people may not give it a lot of thought
and they think, well, I'm just going to give it
to them outright. No, wouldn't that what I want to do.
But in the event where let's say you're a single parent,

(08:53):
or of God forbid, something happened to both parents and
your children were still minors, what happens to that money.
People don't think that, but anyone who's under the age
of eighteen is not gonna be able to manage money.

Speaker 3 (09:03):
They're going to have to be it is. It's an
absolute disaster.

Speaker 2 (09:06):
I had a case where a grandparent named five grandchildren
as beneficiaries of their ira, and it wasn't an insubstantial
amount of money, but all of the grandchildren were under eighteen,
you know, ten, twelve years old. Yeah, So in that
case we had to go to court five times and
get five guardians appointed guardian.

Speaker 3 (09:27):
That's an easy process. That's pss.

Speaker 1 (09:30):
It's a guardianship.

Speaker 2 (09:31):
That's the worst of all possible worlds because until the
child is eighteen, that money goes into a joint account
with a judge if court ordered joint account under a
guardianship for a minor, and when the child turns eighteen,
the lid comes off and all the money is fully available.

Speaker 3 (09:47):
Exactly.

Speaker 4 (09:48):
There's there's no way of controlling how that gets dispersed
at that point. And like you said, if it's a
considerable amount of money and the child's eighteen, you don't
know what that what that child's circumstances are at that
point in life, or what their maturity level. It is
exactly exactly.

Speaker 2 (10:05):
Be able to do that and do it well, let
alone trying to protect that for them and for their lifetimes.
So you need to have a trust established, You need
to appoint trustees, you need to have an executor under
the will. And the third prong is where is your
child going to live?

Speaker 1 (10:23):
Right?

Speaker 3 (10:23):
You need a guardian.

Speaker 4 (10:24):
You need to appoint a guardian, and you rather it
be someone that you want rather than having a court
determine who they believe that that person should be.

Speaker 2 (10:33):
Yeah, So trust planning we're gonna there be a theme
throughout the show. Trusts are the things that we can
mold and craft and build that arc. Think are think
about our rainy day? Noah, Yes, Lord, build me an arc.
That's a built coppy routine forty by eighty humans, by
twenty humans. Right, that's it's a great routreat. But the

(10:58):
arc is what we're building in a state. And we're
going to make sure that we have our kids, our grandkids,
our great grandkids all protected when that rainy day comes.

Speaker 1 (11:07):
And trusts are how to do that.

Speaker 2 (11:08):
And I can't tell you if I had a nickel
for every person that came into me and said, well
my broker said just do transfer on death accounts and
don't worry about Okay, Well, a TOD is cheap and easy,
and Tommy, I don't know if you experiences, but when
clients walk in our door, their estate plan is based
upon a snapshot of what is today. I have three kids,

(11:31):
I have five grandkids. There are all this, that and
the other thing. But that plan is going to play
out over a lifetime. Correct, So how do we get
people across the threshold to not just plan based upon today,
but to look down the road into the future and
what that future may bring.

Speaker 4 (11:50):
So when I speak with my clients, I sometimes I
just turn it on them and I said, well, what
was it that gave you the motivation to walk through
the door today? And a lot of the time it's
that they're thinking about themselves. Well, you know, I'm getting
a bit older, and you know I want to make
sure I have everything in place, and you know, gon
forbid in the future, I need some type of health care,

(12:12):
long term care. I want to make sure everything's set up.
So they're thinking about the acid protection, what do they
need to do. But at the same time, what I
say is then, well you also have to think about
your children. As you said earlier in the show, your
children are going to grow up and have just as
complex lives as you are, and we don't know where
that's going to lead them. They could be successful, they

(12:33):
can be unsuccessful, they could have tragedies, they could have
a number of issues that you are not going to
be able to foresee. So just as important as it
was for you to come in today and talk about
your own personal planning, you have to also think about
the people that you're going to leave behind, who you're
intending to benefit and then also having to think about, well,

(12:54):
what are their situations, what's their situation going to be
like in the future when it actually comes time to inheriting,
And how do I set them up to be in
the best position to inherit everything that I've built and
worked so hard for in my wife to give to them.

Speaker 2 (13:05):
So let's jump a generation. We started out talking about
people in their young ages twenties, thirties, maybe forties, having
those first children, looking at those children, having a will
that appoints a guardian, creates a trust, appoints a trustee,
has an executor to handle the estate, all the basics

(13:27):
that need to be done through that will. And now
we have a generation of newborns or children miners. But
now we're going to go upstream, as I call it,
to the parents and then the grandparents and look at
what they can do to make their plan air tight,
water tight, build the arc in their own documents, and

(13:50):
how do we create the legacy plan that we're going
to talk about next.

Speaker 1 (13:55):
We're going to come back after a short.

Speaker 2 (13:56):
Break and we're going to walk you through planning for yourself,
for your children, your grandchildren, and how to set yourself
up so that they are protected, you are protected, and
the wealth that you've worked so hard to accumulate during
your lifetime is protected.

Speaker 1 (14:13):
We'll be back right after this.

Speaker 5 (14:15):
Would you like to meet with our attorneys for your
own planning? We offer free consultations at the office, by
video conference and by phone. Call Piero, conorand Strauss at
five point eight four five nine twenty one hundred. Pio
Connorance Strauss has loads of educational resources on our website
where you'll find videos, blogs, and free guides on estate planning, medicaid,

(14:35):
long term care, business planning, and more. Find it all
at pierolaw dot com.

Speaker 2 (14:40):
Have you been thinking of starting or updating your estate
plan but life keeps getting in the way. I'm Loupiro,
attorney at Piroconorance Strauss. We help people create estate plans,
including wills, powers of attorney, and healthcare proxies, so that
when you're no longer able to make your decisions, your
loved ones know exactly what you want.

Speaker 1 (14:56):
Don't delay. Make your wishes clear, but failure to plan
is a place and to fail.

Speaker 2 (15:00):
Take the next step with a free consultation so that
when life happens you'll be prepared calls. Today we are back.
I am Luke, your host for this morning on the

(15:21):
Radio Live with my associate Tomaso Morasco, and we are
talking about estate planning and legacy planning and that's going
to be the theme of the show, and we're talking
about trusts. And one of the things that our firm
likes to do is educate people. Educated clients are really
good clients because we want them to understand the nuances

(15:42):
the things that we do in the value of the
things that we do for them to their families and
to them during their lifetimes.

Speaker 1 (15:49):
And we have a workshop this Tuesday.

Speaker 2 (15:51):
It's coming right up, and this is kind of our
last chance to sign up for our trust Administration workshop.
And this workshop has been very very widely, very well received,
and it's been something that people have come back to
us and said, you know, the first time I heard
about all this, I heard so many miss statements and

(16:12):
so many myths about trusts. And when I came to
the administration workshop and the attorneys and we actually have
an accountant that works with us, and we have a
trust officer from trustcoll Bank that works with us, and
Gretchen Gunther from Tilbecker and Shermante is going to be
on Tuesday night with me. I'll be doing the legal

(16:33):
piece and Michael Bates will be doing the trust officer piece.
But it's a complete ninety minute workshop on how trusts
actually operate. Look under the hood, see how it works, get.

Speaker 1 (16:45):
A feel for it.

Speaker 2 (16:46):
And if you want to sign up this Tuesday, it's
five thirty registration six pm to seven thirty program. It's
at the Trustcolle Bank Center, which is right off of
Wolf Road Metro Park Road in Albany, New York, and
you can sign up at pyrolaw dot com. Go to
the events tab again pyrolaw dot com events and you

(17:08):
can sign up for the Tuesday at six pm Trust
Administration Workshop. You can always call us at five one
eight four or five nine twenty one hundred.

Speaker 1 (17:17):
Want to give the phone number out.

Speaker 2 (17:18):
One more time if you're thinking about this, planning for yourself,
planning for next generations.

Speaker 1 (17:23):
I know a lot of times parents, grandparents, great grandparents.

Speaker 2 (17:27):
Come in Tommy, when we have that young grandchild, how
do I start planning for their education? Well, that's part
of it. Five twenty nine plans or a wonderful tool,
A lot of people set up five twenty nine plans,
but let's take it to a higher level and when
it's time to do your own plan. We believe in
trust planning because that keeps our clients out of court,

(17:48):
which we think is a good thing, and our clients agree.
And so eight hundred eighty two five five nine four nine,
that's eight hundred.

Speaker 1 (17:57):
Talk WGY give us a call. When we look at it.

Speaker 2 (18:01):
A lot of times, we're creating a few different types
of trusts. And the basic trusts there are two. One
is a revocable trust and one is an irrevocable trust.
And when I say irrevocable trust to people, they start
to go ooh, really really bad things about that. Oh yeah,
But let's break it down and just give our listeners

(18:24):
a little breakdown on revocable versus irrevocable. And the one
I'm talking about now we design specifically for a purpose
of asset protection. It isn't really a tax planning vehicle.
It maintains all of the tax benefits that you have
for yourself, but it is an asset protection vehicle geared
toward long term care. So break it down Medicaid asset

(18:45):
protection trust versus revocable.

Speaker 4 (18:48):
Trust absolutely, So with the Medicaid Asset Protection trust the
irrevocable trust, there are few notable differences.

Speaker 3 (18:56):
In highlights.

Speaker 4 (18:57):
Number one is you're not going to be your own trustee,
so you would have to appoint a third party to
be the person who would manage the trust and administer
the trust on your behalf. Second is we have to
limit the access to the money, and that means to
the principle, you could still have income available to you,

(19:18):
but the principle cannot be used for the trust creator's benefit.
So the whole purpose of the irrevocable trust in order
to get the asset protection is that we have to
create some separation and distance between you and the asset
so that in the event that you need to apply
for Medicaid and they are looking at your assets to
evaluate whether or not you qualify, those assets are not countable.

(19:42):
They are not something that could be used or accessed
four purposes of medicaid, whereas in a revocable trust, you
are your own trustee and you have unfettered access to add,
to remove, amend, or even cancel at any time.

Speaker 3 (19:59):
Now, now, one of the biggest maths, as you said,
people shutter.

Speaker 4 (20:03):
They think irrevocable trust, I'm giving up my assets, especially
when we tell them a bit about the principle and
they think, well, I can't do that. I need to
have control, I need to have access to this. What
if I need something?

Speaker 3 (20:13):
What happens. So most of the time people's largest assets.

Speaker 4 (20:18):
Are real estate, So one of the biggest things that
we want to make sure is that that real estate
is protected moving forward. Now, in the scenario that we
posed with real estate, if we put it into the trust,
there isn't really much of a difference that you're going
to feel at first. I tell my clients the only
time you're really going to even notice that it's in
a trust is if ever you need to go and

(20:40):
sell it. But the great thing about the irrevocable trust
is that there's still powers that you have control over,
and there is still flexibility. It's not this rigid structure
that irrevocable you think of like this strong box that
nothing can permeated. It's just completely the way that you
set it up. But you always have right to change

(21:01):
and choose who your trustees are, and you have the
ability to go in and be able to change who
your beneficiaries are. So with those two access points that
you have, you have a lot of leverage. And also
if people say, well what happens now, okay, it's not
just real estate. I put money in there and I
need to access the money from the account, what happens.

(21:23):
Then there are ways that we've crafted to allow a
lifetime beneficiary, someone that you appoint to be able to
access the principle and take that money out. Once that
money is out and in their hands, they could use
it for whatever purpose is needed. They can't give it
back to you, but it doesn't mean that they could
not use it for something that you would require. So again, yes,

(21:48):
it's an irrevocable trust. I can't be my own trustee.
I don't have access to principle, but I can choose
who I put in place, and then that person I
can also give the authority to be able to make
with trills of principle that could be used on my
behalf for things that I may need that money for,
all while getting asset protections that in the event that

(22:08):
long term care is needed, those assets are going to
be remain protected, but we also have an avenue to
be able to utilize them should they be needed, and.

Speaker 2 (22:17):
You've left out one big piece of this, and you're right.
When clients come in, their home is one of the.

Speaker 1 (22:24):
Assets they really want to protect. And I get it.
My dad.

Speaker 2 (22:27):
That's one of the reasons I'm in elder law is
my father, after I graduated law school, said that, son,
we built this house, and they did. They built it
when the year I was born nineteen fifty eight. We've
paid off the mortgage and now we want to protect it.
How do we protect it? So I went to a
seminar down in Terrytown, which the elder law wasn't even
a thing yet.

Speaker 1 (22:46):
It was a committee on Seniors for the Trusting State Section.

Speaker 2 (22:49):
And I learned from guys like Peter Strauss, our partner,
and others that were teaching how to do the asset protection.
And this goes back thirty five years, so it's been
going on a long time. And when you have the
house and the trust, you have full rights to that house.
No one can tinker with your right to the house.
You keep your star exemption, your veterans exemption, capital gains

(23:11):
exemptions on sale, all of those things stay present. When
the kids inherit the house, it gets a step up
in basis no questions easy with regard to the house
when you have liquid assets, if it is your children
who you're relying on. Here, I love telling parents that
you can look at your child and say you're fired
because you're not doing what I want. They really get

(23:32):
exactly right, and that's exactly what happens. They can remove
that child if they're not acting appropriately and according to
their wishes. They can remove the trustee and put in
someone more favorable. But more importantly, they can remove the
child as a beneficiary.

Speaker 3 (23:45):
Correct.

Speaker 2 (23:46):
So it's enormous control over that trust, and yet it's
still protective. And in New York we know Tom that
we actually have a statute that says you can revoke
an irrevocable trust.

Speaker 3 (23:56):
That's the last part exactly.

Speaker 4 (23:58):
There is a means of being able to revoke it,
even though the title seems to be a bit misleading.

Speaker 1 (24:05):
Yep.

Speaker 2 (24:05):
And in the asset protection world, we're gonna take a
short break for the news. The one asset that we're
gonna come back and talk about because almost everyone in
that we do a seminar of one hundred and twenty
Peole one hundred and nineteen raise their hand. They have
an IRA or a Tirel one K or a four
or three B a retirement account, and we're gonna come
back and talk about retirement accounts and how they fit
into a plan. How do you protect them during your lifetime,

(24:27):
how do you protect them for the next generation, making
sure they're inside the arc where they're protected and they're
not gonna get sunk. So we'll be right back. Stay
with us for the second half of the show. I'm
Lupiro with Tom Morasco. You're listening to Life Happens Radio
every Saturday morning at nine am here on Talk Radio WGY.

(24:48):
When life happens, weather happens. Be prepared, have an indoor activity,
something that you can do. I'm going to the gym
after this and gonna work out all my frustrations there.
Give us a call eight hundred eighty two nine, that's
eight hundred TALKWGY one more time, eight hundred eight two
five fifty nine forty nine. Be happy to take your call,

(25:09):
answer your questions. Don't forget the Trust Workshop this Tuesday,
coming right up this Tuesday at six pm at the
Truscoll Bank Center right off of Wolf Road and that
is six Metro Park Road. If you want the address,
six Metro Park Road, Tuesday, six pm. Sign up at
purolaw dot com. We're talking about protecting assets, looking at

(25:31):
our own planning, and that's kind of where we finished
the first half of the show, looking at a revocable trust,
a Medicaid asset protection trust, and Tom I could go
through the list of trust and trust acronyms. When we
have a problem as a as an estate planner, the
solution is almost always a trust.

Speaker 3 (25:48):
That's that's right.

Speaker 2 (25:50):
And that's tax planning, that's asset protection planning, that's proad
avoidance management of assets. The irrevocable trust aka Medici asset
protection trust is thought about by people. They hear things,
you know, from their neighbor. You're out mowing the lawn. Oh,
I just talked to this lawyer and he told me
about a trust. But it's too restrictive, or I heard

(26:13):
this about you know, somebody who tried to do this
on their own and it didn't work. When clients come
in and they've heard about all that, we try to
get them interested enough to come for the consultation. And folks,
you can't really know what your situation is and how
the law applies. To you without going through that consultative process.

(26:35):
And the consultative process means that you fill out a
questionnaire for us. You tell us about yourself, your spouse,
your situation. Do you have a life partner, do you
have a spouse, Are you married, are you thinking about
getting married? Do you have children? Is it a second
marriage where you have children from two different marriages. Everyone's

(26:57):
situation from a family perspective is unique, and Tom, this
gets really important when we start looking at, Okay, who
is going to be my trustee? How am I going
to structure my beneficiaries? It's unique. And then you look
at the assets that you have, and we talked about
the house and maybe the vacation home. Trust planning for
those is essential. We look at other assets, brokerage accounts,

(27:19):
bank accounts, all the things that we have in our lives.
Those things need to be protected and some of those
will go in the trust, some of those will stay
in our name if we're using a Medicaid asset protection trust.
And I kind of finished with the third category of assets.
And when we do this, when we sit down with
our clients, we sit down and draw a flow chart.
And this has been something I've been doing for thirty

(27:41):
years because a picture paints a thousand words, and it's
very hard to understand the concepts without seeing a diagram
that says, okay, oh, there's my house in the trust.
There's my vacation home on the lake in the trust.
There's my brokerage account in the trust. Those are protected,
and your trust he's going to manage those. You can
keep the income from those, and if you need to

(28:03):
get principle out of that trust, it can come out
through your trustee and your other beneficiaries, so you can maintain.

Speaker 1 (28:10):
Access to principle.

Speaker 2 (28:12):
On the left side of my diagram is a big circle,
and into that circle goes iras four one KS, four O,
three b's, And this has become Tommy and My experience.

Speaker 1 (28:23):
The number one.

Speaker 2 (28:24):
Or two asset, either a house or the IRA, becomes
the most important asset for that person because we don't
have pensions anymore. Unless you work for a government agency,
you don't have a fixed pension, and so we're relying
on that IRA and four one K.

Speaker 1 (28:39):
But in New York those get special treatment.

Speaker 4 (28:42):
Yes they do, because those don't go into the trust
because the principal value provided that they are in payout
are not accountable resource for Medicaid qualification purposes.

Speaker 3 (28:54):
Which is a huge deal.

Speaker 4 (28:56):
So that means whatever the big number is the pot
of what you have in your retirement account, it is
not accountable resources for Medicaid purposes. Provided it's in payout.
They will look at the income that gets derived from
that your rmds, and there are certain rules about that
when you have to go on Medicaid, but for the
principle that you do not need to worry about.

Speaker 2 (29:17):
So when we draw a diagram, we have three buckets
of money, if you will, and one of them is
fully protected because the law protects it. Iras state in
your name. You don't have to run to a trustee,
you don't have to run to anyone that's your asset,
and you always have one hundred unfettered access to your
retirement accounts. Now, that is unique to New York State.

(29:39):
If you're listening to this program in Vermont or Massachusetts,
where I know this station carries, these rules are very
very different, and iras are not protected in those states.
So we have to be cognizant of what state we're in.
In New York, the iras are mine. I don't have
to do anything with them. I sit on them. They're
right there. We're going to talk about how to layer
them in as to beneficiaries and the complexities there. Tommy,

(30:03):
we'll talk about that, But for right now, that IRA
is staying right where it is and I can access
at any time. The middle bucket is my bank accounts,
my broken account. How much money do I want to
keep there? Because Medicaid allows me to keep thirty two
thousand dollars, so that's kind of the floor, but I'm
probably going to want to keep seventy five or one
hundred thousand dollars there for my own personal expenses, and

(30:25):
I don't need to go to the trust for that
money that's just sitting in my bank accounts correct. And
then the excess, the unprotected assets are what go into
the third bucket, which is our Medicaid Asset Protection Trust.
So when you put those three concepts together, I can
keep a certain amount of money in my name exempt,
I can keep my iras fully exempt, and I can

(30:47):
put the rest in the trust and protect it. Once
people see that and you plug in their assets, their people,
their trustees, their beneficiaries, they'll walk away and say I
didn't know it was this easy to do asset protection,
and we get that response time after time after.

Speaker 3 (31:08):
Time all the time.

Speaker 2 (31:10):
The place to get this answer is the consultation. So
we would encourage you to come in and it's free,
it's no obligation. You can get your diagram, you go
home with it, you can study it and make your
decision as to whether you want to do asset protection
planning or talk about the other type of trust time.

Speaker 4 (31:25):
The revocables absolutely, and every time I sit with my client,
I tell them that the whole purpose of this meeting
is to provide you with an education. I am going
to look at your specific situation, your assets, your family,
and I will tell you everything based on what you
tell me your concerns are and what I can gather
from the information, and we make recommendations from there. But

(31:46):
we'll give you all the information. So we gave you
the information about the asset protection trust. Sometimes you have
some skeptics still who are just hard to digest that
they need to just sit on it or chew on
it for a minute in order to truly process everything
we've gone over. But then on the other hand, we
have the revocable trust. Now, as I said earlier. The
revocable trust has a lot more control and flexibility because

(32:08):
you're your own trustee. You have the right to add,
to take away, modify, or cancel it all together unilaterally
by yourself, without the need of any other trustee, no
limitations on what you can access and what you can
do with it. And it's a great tool for probate avoidance,
so we don't have to go to court. We can
still put assets in there, we still go through the

(32:29):
whole scheme of what should go in, what could stay out,
but we want everything to eventually flow through that trust
so that we can also do our legacy planning, which
we'll get into shortly. And the revocable trust, however, does
not provide you the asset protection because when Medicaid is
going to be looking at this trust, they're going to
see that you have unfettered control and discretion over everything.

(32:52):
So whether or not it's in the name of a trust,
they're going to say it is completely available to you,
and hence it's also available for your care and you
would not qualify for Medicaid purposes.

Speaker 2 (33:03):
And there are different situations that would make it the
revocable trust the first choice.

Speaker 1 (33:10):
Yes, there is a.

Speaker 2 (33:11):
Type of long term care insurance, and insurance is a
big part of that conversation. The first question we ask
is do you own long term care insurance? Nine out
of ten people, probably nine and a half out of
ten people say it's true they don't own long term
care insurance, and so are they of an age where
they want to consider buying it. Well, they can buy

(33:32):
certain types, but as our friend Bob Vandy, who comes
on this show regularly talks about, there is only one
company left selling it other than you know, exclusive companies
that you have to be an agent of that company.

Speaker 1 (33:45):
But if you want to be.

Speaker 2 (33:45):
A broker of insurance products, there's one company and it's
Mutual of Omaha. So when you look at it, the
limited options to buy long term care today may make
you lean towards life insurance or other types of products,
and those are viable, and we tell our clients shop
look for those types of products.

Speaker 1 (34:05):
They are good, solid products.

Speaker 2 (34:07):
You can buy a life insurance policy that provides long
term care protection and if you are adequately ensured, if
you have enough cash flow in retirement, and these are
the key factors. Do you have enough cash flow in retirement,
combined with insurance benefits to private pay without depleting your assets,

(34:27):
then the revocable trust is a good vehicle for you. Absolutely,
And so that's the analysis that we go through with
our clients. We need to know what their incomes are,
not just if they're working, what the income in retirement
is going to be. We need to project that out
and we do. We sit down, we do a calculator.
Where's a security benefit, Here's a pension. If you don't
have a pension, here's your IRA minimum distributions. Here's what

(34:49):
you can expect to have the shortfall today, Tom, we're
comparing it now against the seventeen eighteen thousand dollars a
month obligation.

Speaker 3 (34:57):
A month, yeah, per month exactly.

Speaker 2 (35:00):
Why not many people can say that, Okay, I'm self insured.
I can cover that seventeen thousand dollars a month nursing
home bill. Correct, So we have to supplement that and
Medicaid trust then becomes part of the conversation. But a
revocable trust for those that have partnership long term care insurance.
And every now and then I get a client coming
in and I just had one come in a couple

(35:22):
of days ago for a second opinion on their plan
because their attorney did a revocable trust.

Speaker 1 (35:27):
And they said, is that enough? Should I have an
irrevocable trust?

Speaker 2 (35:31):
And I said, okay, why did they tell you?

Speaker 1 (35:33):
I don't know why they told me a revocable trust.

Speaker 2 (35:36):
So I said, we went through the conversation and I said,
do you have long term care insurance?

Speaker 1 (35:41):
And they said yes. I said, did you bring it
with you? It's always good idea to bring it with you, folks.
They said no.

Speaker 2 (35:48):
I said, okay, can you tell me about the policy
and they said, well, I bought it thirty years ago,
and you know, here is the benefits, and I've reduced
benefits because the premium got too much. But it has
I said, does it have this little logo on it,
the Partnership for Long Term Care, which is two stick
figure shaking hands. And they said, well, yeah, I remember
that that's on there. That gives them one hundred asset

(36:08):
protection in New York.

Speaker 1 (36:10):
Yes, So they.

Speaker 2 (36:11):
Don't need an irrevocable trust. They don't need an asset
protection trust. They're fully asset protected with their insurance policy.
And it's unfortunate, but you can't buy that partnership plan
anymore in New York State. So when we look at it,
you're comparing revocable irrevocable. This is building the arc. My
spouse and I are going to get on the arc.

(36:32):
We're going to be protected, and you know, we're going
to sail through retirement and I'm going to have the
ability to utilize my income and I'm going to know
that my assets are protected, so I'm not at risk
if I have a long term illness. So I'm not
going to digestitute. The last thing you want is to
run out of money because you paid these long term
care expenses and leave no legacy. So now I've shored
up my plan. I'm in the ark. I'm going to

(36:55):
stay afloat. But now who else can I bring into
the arc when my trust ends? Tommy, what are my
options with regard to naming beneficiaries, whether it's children, nieces, nephews,
How can I protect them?

Speaker 4 (37:10):
So that's where we talk about our legacy planning. And
we were talking earlier about people who think about making
outright gifts, but that doesn't give them any protection. Once
a individual inherits money outright, it is then subject to
any of the issues that they could become open to
it becomes it's still a risk for them. Again, we

(37:32):
don't know what their situation is going to be like.
And I tell my clients this, You're coming to me
to tell me how do I get ACID protection for myself?
But then you also want to think about, well, how
can I do that for my children, my loved ones
who I want to pass this along too. And this
is where we get into the discussion about beneficiary controlled trusts,

(37:52):
and this.

Speaker 3 (37:53):
Is how we do our legacy planning.

Speaker 4 (37:55):
So rather than leaving an individual outright, we leave it
to them in a trust. And the reason we do
that is because when it's wrapped in this trust, they
inherited in an asset protected manner. So where we're here
in this meeting trying to get that asset protection for
the client, and especially when it comes to Medicaid, we

(38:16):
also have to be cognizant of the five year look
back for our beneficiaries. They don't have to worry about
that if they are inheriting it through this trust vehicle.
They are inheriting it in something that's already ACID protected.
That means no judgments, bankruptcies, divorces, or even if they
ever needed some type of government based aid in the future.

Speaker 3 (38:36):
None of the.

Speaker 4 (38:37):
Principle in that trust could be touched or used against
them or accessed. So it is a very powerful tool
for legacy planning.

Speaker 2 (38:46):
It's become my favorite topic in talking to parents because
I have children who are getting married. It's true the
thing you think about when I'm leaving a legacy to them,
I want to leave it to them. If I have grandchildren,
I want to make sure it gets down to my grandchildren.
So this is for me a very personal thing. But
we've been doing BCTs, and that's the term we use

(39:08):
in acronym for beneficiary control trust We've been doing them
for twenty years plus. And in New York it was
a result of a case that came down that said
you can have a child as their own trustee and
still have the assets protected from creditors. That was a
controversial topic for a long time. Yeah, but it's more
or less solidified under New York law. And so we

(39:30):
create these trusts. The kids can have one control, be
their own trustee, manage the assets for themselves. We can
give the children the power to choose the ultimate beneficiaries,
or if you're Italian like us, Tommy, you want to
keep it in the bloodline. True, you want a bloodline trust.

(39:51):
It's not going outside of the family on me yet.
So if you're like me, I kids, I want them
to have as much freedom and independence over the trust
as possible, right, and so I've given them And this
is my plan, folks, I'll tell you exactly what it is.
That's a revocable living trust with these beneficiary control trusts,

(40:13):
and I'm allowing my children to.

Speaker 1 (40:15):
Be their own soul trustee.

Speaker 2 (40:16):
They can manage the money for themselves, they can use
it as they need it, and they can choose their
own beneficiaries. So there is literally no difference between inheriting
through this trust from a control perspective and an access
perspective versus just putting it into their name. But there
are major differences with who else can access that money.

Speaker 3 (40:36):
Tom That's very true.

Speaker 4 (40:38):
And that's why this is so important, because a lot
of the time to think, well, I want them to
be able to have access. I want them to be
able to have the comfort. I want them to have
the things that I had to work so hard for.
And that's great, and this is a way that you
could do that. But also keep it protected for them.
And I get all the time. It's not that I
don't love my in law or anything like that, but
you know, just in case, and I have ranchildren exactly

(41:01):
and we all understand. But the way that this is
structured is that your child, your loved one, will have
the access. They are their own trustee. As they need it,
they will be able to tap into it and it
stays there. And like I said earlier, nothing, no other
situation that comes up is going to be able to

(41:21):
permeate that barrier that you've put between their inheritance and
any outside risk that they could ever come across in
their future.

Speaker 2 (41:31):
And I am so blessed to have three children who
are educated, independent, They're healthy, that's the biggest thing. They're working,
and they each have great relationships. One is married, one
is engaged, and I'm assuming anticipating the other will be
engaged within the year. So we love their partners, We

(41:54):
travel with them, we do things together, We love the
whole family. We call it the eight pack. There are
eight of us and we do a lot of things together.
But the family still comes first. And that's something my
father taught me, because you never know life happens, and
you don't want your arc to spring a leak. You
don't want the assets leaking out in a messy divorce proceeding.

(42:15):
You want to make sure that you've protected your children
and your grandchildren, protected the next generations and your great grandchildren.

Speaker 1 (42:22):
This plan can go on and can last.

Speaker 2 (42:25):
And when I sat my kids around the table when
I was doing my plans several years ago, I said, okay, kids,
here's the deal. I can leave everything to your outright,
in which case you then have to go out and
each of you will have to do your own planning,
do a will, do a trust, you know, figure out
what to do with the assets that you inherit. And
it's you can't protect them because New York doesn't allow

(42:46):
you to protect your own assets. You can't do this
for yourself. And that's an important point that a lot
of people miss. You cannot do this planning for yourself,
but you can do it for others. I can do
it for my children, and I can put it in
a trust where you're the trustee. You manage it, you
use it, you can use it anytime, you can invest
it how you want it, and no one else can
touch it. And They looked at me, Dad, is that

(43:09):
a trick question? And I said no, that those are
your options. So it was an easy choice for me.
They made it easy, and you know, hopefully you're able
to have those crucial conversations because this topic is that important.
We're gonna take a short break. We'll be back for
the last segment of the show, so stay with us.

(43:31):
I'm Lupiro on with Tom Morasco from pier O'Connor and Strauss.
You're listening to Life Happens Be back after this message.

Speaker 5 (43:38):
Do you have a question for our attorneys? Want to
suggest a topic for Life Happens Radio or to sign
up for our newsletter, head to Life Happens Radio dot
net and send us a message and for more updates
follow us on Facebook.

Speaker 6 (43:50):
Family dispute skinnerrupt for many reasons, but usually involve money
or access to mom or dad.

Speaker 1 (43:55):
If this happens to you, you need a lawyer who
knows his way around the courtroom.

Speaker 6 (43:59):
I'm Aaron Connor, managing partner at Piero connor and Straps.
Our experienced litigation team can help you with will contests,
trust disputes, guardianship or other legal challenges. Protect yourself and
your family. Call Piero, Connor and Strauss so when life happens,
you'll be prepared.

Speaker 5 (44:14):
Would you like to meet with our attorneys for your
own planning? We offer free consultations at the office, by
video conference and by phone. Call Piero, Connor and Strauss
at five one eight four twenty one.

Speaker 2 (44:26):
Look, we have about eight minutes left, Tommy. We've covered
building the arc. Today's soggy theme here on this screeny Saturday,
another greena Saturday. But you know, into every life a
little rain must fall. And beneficiary control trusts are the
ultimate umbrella when when your kids have a creditor problem,

(44:51):
you know they have, they get sued, they get in
a bad accident, they get sued, they have creditor issues,
they go bankrupt or they need medicaid themselves, and you
want to protect the assets or on the flip side
of this time, my kids, I hope they're all wildly
successful in a mass great fortunes of their own, But

(45:13):
then they're going to be in an.

Speaker 1 (45:14):
Estate tax situation, that's right.

Speaker 2 (45:17):
And when we layer in tax planning on top of this,
how do these assets weigh in on my children's own
estate tax planning.

Speaker 4 (45:27):
Well, if we put them in the trust, that's not
something that we're going to need to worry about, thankfully,
But if we leave it to them outright, that's another
matter because now it becomes part of their state. It's
includable in their assets at the time of their passing
and will count towards that evaluation on whether or not
state taxes do so.

Speaker 2 (45:45):
BCTs protect assets for the children, whether it's a litigation,
a bankruptcy, a divorce, medicaid planning, tax planning. These are fortresses.
These are things that you can build for your children
that they have one hundred percent control and access to.
And a lot of people think of trust, oh, they're

(46:05):
only for rich people. Well, okay, so if you're leaving
your child three hundred thousand dollars and they blow through
all of their own money and they're getting sued, wouldn't
it be nice for that three hundred thousand dollars to
be protected or one hundred thousand dollars to be protected,
or whatever the amount is. Keeping it protected is so important.

(46:27):
And you know, I don't have a personal story as
a beneficiary, but I've always thought that if my parents
were not wealthy people they owned a home and that
was kind of the legacy, which was great. But if
I ever had an ability to inherit money, I wouldn't
want to dump into my bank account because I know
how hard it is to try to plan for that.

Speaker 3 (46:49):
Right.

Speaker 4 (46:51):
And so right, no, and it's to take one layer
further than just grand children, but thinking of grand parents,
because a lot of the clients we come in our
parents that do you know, have that situation where they're
fortunate enough that they still have parents and their parents
might have amassed something. And so we're sitting here dealing
with the we'll call it the middle generation, right we

(47:15):
have grandparent parent and call it grandchild. We're sitting there
with the parents. And that's one of the questions I
asked them too, if if their parents are still alive,
I'm like, well, is there any expected inheritance that you
could be coming into? And then okay, well what is
what are your parents' plans look like? Because how they
leave it to you is going to impact the planning
that we're going to be doing for you and your children.

(47:35):
So it's it's it's all relevant. And and you make
a good point, lou Is that if people have that ability.
It's it's really crucial to get them all in above.
I was fortunate enough that, you know, my my parents
are still with me, and I had to sit down
with my father too.

Speaker 3 (47:49):
He's an immigrant for Italy.

Speaker 4 (47:51):
But you know, he's he's always been an entrepreneur and
he's always he's done well for himself. And I've had
that conversation with him as well. I'm like, you need
to think about it. I mean, obviously it's in your hands,
but what is it that is most important to you,
and what is it that you're looking to accomplish, And
it's important to get that into the conversation as well.

Speaker 2 (48:09):
Absolutely, And this we can tie the whole theme together
if we go back to our newborns and new parents
and we think about those grandparents wanting to plan for
the grandchildren and wanting to benefit the children. When you
structure a beneficiary control trust, it becomes a family trust

(48:31):
for each branch of the family, So three children. When
your own trust breaks, when my revocable trust or Medicaid
ASID protection trust breaks upon death, it doesn't end. It divides.
It divides into three shares. Each of the children gets
their own share, and then their children are beneficiaries of

(48:54):
that trust simultaneously. So the asset protection trust, you can
leave in your child's hands, leave the money fully protected
and have it available so that they can use it
to pay for college tuition or healthcare expenses, or helping
their child buy a home or start that business. The
beneficiary control trust have that flexibility that their entire family

(49:16):
is going to be in the arc, in the boat
with them and is going to have the ability to
access those funds.

Speaker 1 (49:21):
And to me, Tom, that's so.

Speaker 3 (49:22):
Yeah, it's crucial.

Speaker 4 (49:24):
That's that's that's what it's all about, right, That's what everybody,
That's what we live for. That's everybody's why and their
and their purpose and why not take that extra step
to make sure that we are doing everything that we
possibly can to ensure that it remains protected.

Speaker 2 (49:40):
So, if you'd like to get more information on any
of the topics that we talk about, I just want
to plug our website. We do a lot of work
on it. We spend a lot of time on it.
We write blogs, we write articles. They all appear on
our website, and we have a handout on beneficiary control trusts.
And this is kind of the add on to your
own estate planning, whether you're doing a revocable trust or

(50:03):
a Medicaid asset protection trust, the capstone to that plan can,
and in many cases should be the beneficiary control trusts
for each of your family members. And there's a lot
that goes into this planning tell me, and that consultative
process is the absolute key walking through all the issues
and making sure that our clients are fully apprized of

(50:26):
all of the possibilities and the things that they can do.
Got one more minute, anything else you want to add?

Speaker 4 (50:34):
Now, I'll just make sure we continue the two by
twos into the boat and latch it up, making sure
it's nice and secure, and we set sail right and
keep on that water and keep it out too.

Speaker 1 (50:46):
Yeah.

Speaker 2 (50:46):
Absolutely, So everyone join us Tuesday at six pm for
our Trust Administration workshop. We also have Medicaid Monday coming
up on June ninth. That's Frank Hemming talking about Medicaid issues.
We try to keep our educational program going, so go
to purolaw dot com go to the events tab and
you'll see all of the upcoming events. Thank you for

(51:07):
joining us again this Saturday morning. Rainy as it is,
but hopefully little sun will come into your life. Tomorrow,
the next day, the sun will come up. I'm not
going there, so have a great weekend.

Speaker 1 (51:21):
We hope you enjoy. Be back next week