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 O
Connor and Strauss with me. I have Dylan Newkirk here
in studio.
Speaker 2 (00:41):
Morning Dylan, Morning Lou, happy to be here, Great.
Speaker 1 (00:44):
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
life right and so are you prepared for the unexpected?
(01:05):
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
(01:26):
have 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
(01:47):
we 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
(02:09):
that critical decision. 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? Tom?
Speaker 3 (02:20):
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 2 (03:04):
Dylan officially about just over a month.
Speaker 1 (03:08):
Yep. I thought you're gonna give you, you know, thirty days,
six hours, forty two minutes.
Speaker 2 (03:13):
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,
stillan 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 2 (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 2 (04:06):
So obviously I am coming from the younger generation here.
Speaker 1 (04:11):
What what letter are you? I think are gen Z?
Speaker 2 (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?
Speaker 2 (05:06):
Yes, 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 tell me, 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 3 (05:54):
Yeah, there's nothing truer than that, and some of the
best claus I've ever received, or they were kind of
two toned, right, One was to say that you 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 conflict,
(07:04):
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 the President
(07:27):
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, you're
(07:48):
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 a living
will just talk about each of those and how they work.
Speaker 3 (08:05):
Absolutely. So, the healthcare proxy is a 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 where
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 end
(08:29):
of life decisions. If you're in a persistent vegetative state,
no cognitive functional 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, And say, 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
(09:10):
and you don't have any terminal illness that's going to
take you out, you're not being kept a lively 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
(09:31):
in the 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
(09:52):
like it. 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 and I'm not going to recover
(10:14):
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 carefully because it's a very sensitive decision.
(10:36):
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 the way along the line. But
(10:56):
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 2 (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 health care 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
(12:02):
and the 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.
(12:24):
Next up, 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
Life Happens Radio, because you know what life happens. Be prepared.
(12:45):
We'll be back right after this big and 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
(13:07):
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 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
(13:29):
are things that we have worked on over the years
and keep updating and fine tuning. The twenty twenty five
of State Planning Guide is hot off 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
(13:52):
keep tabs on us on that website to see what
the future events are and kit the guides because they
will give you an education. And a lot of people
just go to Google. You know, that's kind of natural
and dial 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
(14:16):
are nuanced and it's all for New York law. So
what do you think about the googling of of all
of this information?
Speaker 2 (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 and 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
immediately what your family is, the children, decision makers, what
your assets are beneficiaries. So all of that is the
(15:44):
start of the process, and then we start asking, okay,
who are your healthcare agents and 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 3 (16:08):
Yeah there's New York is not permit for that, and
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 designating one agent at a time, but
you are able to name successors. So in the event
(16:28):
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 sixties, so I'm a boomer and that's what my
kids say, Okay, boomer, Well what are you, Tommy? What
what generation are you in? And I've been doing a
(16:57):
lot of research on the generational differences because I'm an employee,
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 3 (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.
Speaker 3 (17:22):
Tome Over ten years?
Speaker 1 (17:25):
Now, that's great. 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
(17:46):
to cut any 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
(18:07):
they have to 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,
(18:31):
and you can put older people in as long as
you have backups that are younger. So a lot of
clients miss that. So 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
(18:53):
then have the backup so that if they are not
available for any reason, you've got a decision maker.
Speaker 3 (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
(20:47):
to do things on their behalf.
Speaker 3 (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 become polluted, but conversely, sometimes so simple and a
lot of the times that's where things are 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
(21:10):
New York site. The gifting powers, which is tremendous, 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.
(21:32):
As a matter of default, you're going to be limited
to making transactions into Europe and the amount of 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
(21:53):
is I can't. And that's where we have the biggest
bit falls.
Speaker 1 (21:56):
Yep, 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 2 (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 of attorney
has changed over the years my 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. A lot of people don't think
(23:18):
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 a break for the news.
(23:40):
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,
(24:00):
and we're here in studio 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
(24:21):
of our careers, you know, 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,
if you get an accident that you have never contemplated,
you get divorced, you have issues with family members, All
(24:46):
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 statutory basics of the statutory form is
(25:09):
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 under a power of attorney in place,
you have no one to make decisions for you, and
(25:30):
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. The next piece of it is a will,
(25:51):
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 going
(26:11):
to talk 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 were 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 do so many different things
(26:56):
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 3 (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
wild 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 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 surrogate's court. You're in Albany County. You
(28:35):
now practice in the probate area. Probate's no picnic, No,
it is not.
Speaker 2 (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 court 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
(29:39):
over the 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
(29:59):
give them 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 2 (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
(31:17):
house 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 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 served 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 3 (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
documents 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 do to
(33:10):
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. We 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 had
three heads, what do you need to trust for what?
(33:32):
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
have closed on the closing date because my power as
(33:53):
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 probated states. They're paying us
to do that. So there are a lot of steps
(34:16):
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 2 (34:31):
Those costs do add up. For example, I have my
first court date coming up this twth coming we so.
Speaker 1 (34:40):
Dylan's going to court, Tommy, no boy, I sure, am.
Speaker 2 (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 upon your family
or guardianship. It's just shortsighted. So, Tom, in our most
basic trust, the revocable living trust, talk about who the
parties are to that and how does the trust work.
(35:29):
And in a revocable trust situation, who are the parties.
Speaker 3 (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 trustee 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. 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 with beneficiaries
as well.
Speaker 1 (36:31):
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.
Apployment can only be one. But a power of attorney,
a trust, and a will can all be multiple agents
co agents. They can act separately or jointly. So very
(36:53):
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 and that is.
Speaker 3 (37:16):
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 3 (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 dollars 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 individualsically 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 none nine
to nine million, so seven and fourteen. Most clients aren't
(40:05):
taxable from an 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 3 (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 partecting your assets
if you ever need long term care and protecting assets
(41:03):
for your kids. We have something called a 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 Newkirk, 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 3 (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 Tommy, 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 3 (43:43):
It's true. And while the Medicaid ACCID 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, you as
(44:05):
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 second is
(44:27):
also being able to change and update beneficiaries 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 that trust cannot
(44:50):
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 3 (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 hirement 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
could hand money to your kids and they can put
(46:45):
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 3 (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 O
Connor and Strauss with me. I have Dylan Newkirk here
in studio.
Speaker 2 (00:41):
Morning Dylan, Morning Lou, happy to be here, Great.
Speaker 1 (00:44):
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
life right and so are you prepared for the unexpected?
(01:05):
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
(01:26):
have 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
(01:47):
we 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
(02:09):
that critical decision. 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? Tom?
Speaker 3 (02:20):
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 2 (03:04):
Dylan officially about just over a month.
Speaker 1 (03:08):
Yep. I thought you're gonna give you, you know, thirty days,
six hours, forty two minutes.
Speaker 2 (03:13):
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,
stillan 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 2 (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 2 (04:06):
So obviously I am coming from the younger generation here.
Speaker 1 (04:11):
What what letter are you? I think are gen Z?
Speaker 2 (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?
Speaker 2 (05:06):
Yes, 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 tell me, 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 3 (05:54):
Yeah, there's nothing truer than that, and some of the
best claus I've ever received, or they were kind of
two toned, right, One was to say that you 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 conflict,
(07:04):
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 the President
(07:27):
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, you're
(07:48):
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 a living
will just talk about each of those and how they work.
Speaker 3 (08:05):
Absolutely. So, the healthcare proxy is a 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 where
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 end
(08:29):
of life decisions. If you're in a persistent vegetative state,
no cognitive functional 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, And say, 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
(09:10):
and you don't have any terminal illness that's going to
take you out, you're not being kept a lively 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
(09:31):
in the 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
(09:52):
like it. 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 and I'm not going to recover
(10:14):
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 carefully because it's a very sensitive decision.
(10:36):
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 the way along the line. But
(10:56):
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 2 (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 health care 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
(12:02):
and the 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.
(12:24):
Next up, 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
Life Happens Radio, because you know what life happens. Be prepared.
(12:45):
We'll be back right after this big and 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
(13:07):
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 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
(13:29):
are things that we have worked on over the years
and keep updating and fine tuning. The twenty twenty five
of State Planning Guide is hot off 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
(13:52):
keep tabs on us on that website to see what
the future events are and kit the guides because they
will give you an education. And a lot of people
just go to Google. You know, that's kind of natural
and dial 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
(14:16):
are nuanced and it's all for New York law. So
what do you think about the googling of of all
of this information?
Speaker 2 (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 and 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
immediately what your family is, the children, decision makers, what
your assets are beneficiaries. So all of that is the
(15:44):
start of the process, and then we start asking, okay,
who are your healthcare agents and 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 3 (16:08):
Yeah there's New York is not permit for that, and
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 designating one agent at a time, but
you are able to name successors. So in the event
(16:28):
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 sixties, so I'm a boomer and that's what my
kids say, Okay, boomer, Well what are you, Tommy? What
what generation are you in? And I've been doing a
(16:57):
lot of research on the generational differences because I'm an employee,
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 3 (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.
Speaker 3 (17:22):
Tome Over ten years?
Speaker 1 (17:25):
Now, that's great. 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
(17:46):
to cut any 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
(18:07):
they have to 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,
(18:31):
and you can put older people in as long as
you have backups that are younger. So a lot of
clients miss that. So 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
(18:53):
then have the backup so that if they are not
available for any reason, you've got a decision maker.
Speaker 3 (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
(20:47):
to do things on their behalf.
Speaker 3 (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 become polluted, but conversely, sometimes so simple and a
lot of the times that's where things are 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
(21:10):
New York site. The gifting powers, which is tremendous, 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.
(21:32):
As a matter of default, you're going to be limited
to making transactions into Europe and the amount of 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
(21:53):
is I can't. And that's where we have the biggest
bit falls.
Speaker 1 (21:56):
Yep, 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 2 (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 of attorney
has changed over the years my 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. A lot of people don't think
(23:18):
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 a break for the news.
(23:40):
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,
(24:00):
and we're here in studio 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
(24:21):
of our careers, you know, 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,
if you get an accident that you have never contemplated,
you get divorced, you have issues with family members, All
(24:46):
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 statutory basics of the statutory form is
(25:09):
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 under a power of attorney in place,
you have no one to make decisions for you, and
(25:30):
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. The next piece of it is a will,
(25:51):
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 going
(26:11):
to talk 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 were 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 do so many different things
(26:56):
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 3 (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
wild 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 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 surrogate's court. You're in Albany County. You
(28:35):
now practice in the probate area. Probate's no picnic, No,
it is not.
Speaker 2 (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 court 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
(29:39):
over the 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
(29:59):
give them 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 2 (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
(31:17):
house 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 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 served 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 3 (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
documents 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 do to
(33:10):
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. We 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 had
three heads, what do you need to trust for what?
(33:32):
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
have closed on the closing date because my power as
(33:53):
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 probated states. They're paying us
to do that. So there are a lot of steps
(34:16):
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 2 (34:31):
Those costs do add up. For example, I have my
first court date coming up this twth coming we so.
Speaker 1 (34:40):
Dylan's going to court, Tommy, no boy, I sure, am.
Speaker 2 (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 upon your family
or guardianship. It's just shortsighted. So, Tom, in our most
basic trust, the revocable living trust, talk about who the
parties are to that and how does the trust work.
(35:29):
And in a revocable trust situation, who are the parties.
Speaker 3 (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 trustee 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. 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 with beneficiaries
as well.
Speaker 1 (36:31):
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.
Apployment can only be one. But a power of attorney,
a trust, and a will can all be multiple agents
co agents. They can act separately or jointly. So very
(36:53):
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 and that is.
Speaker 3 (37:16):
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 3 (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 dollars 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 individualsically 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 none nine
to nine million, so seven and fourteen. Most clients aren't
(40:05):
taxable from an 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 3 (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 partecting your assets
if you ever need long term care and protecting assets
(41:03):
for your kids. We have something called a 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 Newkirk, 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 3 (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 Tommy, 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 3 (43:43):
It's true. And while the Medicaid ACCID 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, you as
(44:05):
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 second is
(44:27):
also being able to change and update beneficiaries 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 that trust cannot
(44:50):
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 3 (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 hirement 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
could hand money to your kids and they can put
(46:45):
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 3 (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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