Life Happens

Episode Transcript

Speaker 1 (00:00):
Points and promises made during the following program are not
those of w g y it's staff, management or parent company. iHeartMedia.

Speaker 2 (00:16):
Welcome to Life Happens Radio, featuring the attorneys from Pier,
O'Connor and Strauss. Tune in every Saturday morning at nine
am for the most in depth discussions that help you
navigate the legal, financial, and health related challenges we all face.
Life Happens.

Speaker 3 (00:31):
Are you prepared? Good morning everyone, Welcome to Life Happens.

Speaker 4 (00:41):
I'm Luke here are your host for this morning, and
I'm going to begin with a poem, be still set,
heart and cease repining. Behind the clouds is the sun
still shining. Thy fate is the common fate of all.
Into each life, some rain must fall, Some days must
be dark and dreary. And if you live in the

(01:03):
Capitol District, that day is Saturday. It has rained every
Saturday since November. So if you look out your window
and you're just waking up, yeah it's raining. And into
every life, a little rain must fall. The name of
the show is Life Happens. And so when that rain falls,
what we want you to have is an umbrella, a raincoat,

(01:24):
and to be totally prepared. For whatever comes your way,
and to this morning, I'm very happy to have with
me one of my associates, TOMASO Morasco, who's coming to
us live from Long Island, New York.

Speaker 5 (01:37):
Good morning time, Good morning, Lou, Thank you for having.

Speaker 4 (01:40):
Me and Henry Wadsworth Longfellow. I thought was appropriate to
kick off this morning because man, it just keeps raining
every weekend. You try to play golf, tennis, whatever you
want to do, get outside, go for a hike, go
for a walk. And we've been facing a lot of rain.
I don't know what you got on Long Island today,
but that you know, just pouring out.

Speaker 5 (02:02):
Yeah. Yeah, we had a torrential downpour overnight and we're
about we're supposed to get hit with it some more
in a little while, so I guess we'll see. Yeah.

Speaker 4 (02:11):
So today's show is going to talk about building an arc.
I'm just going to keep going with you now. So
we're going to build an arc for our family so
that when the rain pours down, we're protected and when
the rain stops, we'll have a family that is well protected.

(02:31):
And the theme Tom is to talk about next generation planning,
and we'll touch on planning for the client themselves, whether
you're thirty fifty eighty, one hundred and two, you need
a plan for yourself. But when do you start thinking
about that plan becoming a plan not just for you

(02:53):
but for the next generation. And I know that the
first time I thought about that, Tom, and I'm sure
you had these thoughts is in the hospital when my
daughter was born, my first born, and the doctor handed
my daughter to me, and it's like, I.

Speaker 3 (03:11):
Am responsible, yeah for that life. M h, I don't know.
Did you have something similar to that?

Speaker 5 (03:18):
Yeah, the second my son was born, my first born,
similar thought. I was like, Wow, this is a totally
totally different, uncharted waters and that's all you think about it.
It's like, well, what do I need to do next?
How do I be prepared? How can I be the
best father? Right?

Speaker 4 (03:35):
So absolutely, and we're going to start off with that
kind of thinking about protecting our children when they're young.
But as our children grow that doesn't mean we need
to stop thinking about it. And when they get to
a point in their lives where they have, yeah, their
lives have become as complicated as ours, and life is complicated.

(03:56):
We want to make sure that we're thinking not just
for us downstream to the children, the grandchildren, and these
plans we do intergenerational planning that can go all the
way down and keep trusts intact, and that will get
in into maybe in the second half of the show,
keeping trusts intact generation over generation, so that family wealth

(04:19):
can be protected, can be growing generation over generation, and
can be available to help put the next generations through college,
to help them buy homes, to help them succeed.

Speaker 3 (04:31):
In opening their own businesses.

Speaker 4 (04:34):
All the things that you need to have capital available
for during your lifetime could be done through solid trust planning.

Speaker 3 (04:43):
And we are going to open up the phone lines
this morning.

Speaker 4 (04:45):
We're gonna take calls, so I'm gonna put the number
out there right now, so if you want to give
us a buzz, Tom Morasco Lupiro from Pier o'connoran Strauss.
We're going to talk about estate planning, but we'll take
your questions on almost almost anything, whether the Knicks or
gonna win tonight.

Speaker 5 (05:02):
Let's hope, let's hope.

Speaker 3 (05:04):
You know it's it's all good.

Speaker 4 (05:05):
So it's eight hundred eight two five, five nine four
nine again eight hundred eight two five fifty nine forty nine.
That's eight hundred talk WGY. So Tom, let's start at
the very beginning. And I used to do a sound
effect for this over the years, and that is, we

(05:27):
have a new baby, and we're gonna plan and what
are the things that you as a dad a of
a young child think about?

Speaker 3 (05:37):
And what do you think about for your clients?

Speaker 5 (05:39):
So honestly, I know this it might sound a little dark,
but the first thing I thought in my head was like, Okay,
this is my responsibility, this is what I'm gonna do.
But what happens if God forbid, something happened to me.
Who's gonna take care of my child? Who am I
gonna put in charge? How do I do that? Right? Thankfully,
being in the field that we're in, I have those answers.

(06:00):
A lot of people don't, So sometimes people don't want
to think that way, and I can understand that's not
really a pleasant thought. But at the end of the day,
we need to be realistic. And as the name of
our show is, life happens. We've all heard stories, right,
So first thing I tell any new parent is that
you need to have a plan. I don't care if
you don't have any assets or if you feel like

(06:22):
you're not in a situation in your life where you
think or believe that you need one. If you have
a child, you certainly need to have a plan.

Speaker 4 (06:30):
So most people at you know you have kids in
your twenties, thirties, forties, or you know, if you're de
Niro and Paccino seven, but they're in different positions. But
when let's you're a thirty year old, you have your
first born, and you're looking at it and saying, Okay,
I'm I'm working my tail off at a job that

(06:52):
pays me well but doesn't pay me enough really to
pay it if I can't save enough quickly enough pay
for college tuition, which if you have a new baby today,
that college tuition right now is approaching six figures at
some of the academic institutions, ninety thousand a year. By

(07:13):
the time that child grows, it's going off about ten
percent a year. You're looking at one hundred and forty
hundred and fifty thousand dollars a year for college if
it keeps going at the current rate. How do you
have enough money set aside when you're just starting your career.
You may have student loans, you may have just bought
a house and you have a mortgage, how do you
get enough money set aside so that if something happens
to you, that life event happens to you and you

(07:36):
have a premature death, you get in that accident, or
you have that illness, how do you put enough cash aside?

Speaker 5 (07:42):
The first thing I did was purchase life insurance.

Speaker 4 (07:45):
There you go, just talk about that. What kinds of
policies do most people look for when they're.

Speaker 3 (07:50):
In that position?

Speaker 5 (07:51):
Yeah, so, especially when you're in a younger position, As
you said, you have a lot of liabilities over assets
at that point in time, there are there's term life insurance,
which is a lot more of an affordable plan. It's
call it a pay as you go plan, but they
have several different options available, and if you are young,

(08:12):
let's say, reasonably well healthy, then they're very very reachable
and attainable. And that's certainly where we would start.

Speaker 4 (08:22):
Absolutely, term policies at thirty years old are pennies on
the dollar, and you can buy a million dollars two
million dollars of coverage so that you set aside enough
money to have that fund. But then we have to
think about tom if something happened and you die, at
age thirty.

Speaker 3 (08:40):
Where does that million dollars go? How does it get managed?

Speaker 5 (08:43):
Correct? So that's where we talk about our trust planning
and our estate planning. That's the second integral part of
all of this.

Speaker 3 (08:53):
And most people are doing wills at that point.

Speaker 4 (08:55):
So what are the essentials in a will when you're
just starting out, when you have young children, You're gonna
buy that term life insurance policy to make sure you've
covered that base you're planning for retirement. But it takes time,
you know, time in the market, not timing the market.
We hear that all over the place on this channel. Yeah,
and so it's gonna take time to do that. So

(09:17):
how do we put that life insurance in place? And
what are we looking for in the will to protect
our loved ones?

Speaker 5 (09:24):
So the main thing is, aside from making sure we
know who we're going to designate to be in charge
of everything, but the vehicle in which it's going to
pass to our loved ones. Now, a lot of the
times people may not give it a lot of thought
and they think, well, I'm just going to give it
to them outright. No, wouldn't that what I want to do.
But in the event where let's say you're a single parent,

(09:46):
or of God forbid, something happened to both parents and
your children are still minors. What happens to that money.
People don't think that, but anyone who's under the age
of eighteen is not gonna be able to manage money.
They're gonna have to be it is. It's an absolute disaster.

Speaker 4 (09:59):
I had a case where a grandparent named five grandchildren
as beneficiaries of their ira, and it wasn't an insubstantial
amount of money, but all of the grandchildren were under eighteen,
you know, ten, twelve years old. Yeah, So in that
case we had to go to court five times and
get five guardians appointed.

Speaker 5 (10:19):
Guardians an easy process.

Speaker 4 (10:21):
That's it's a guardianship. That's the worst of all possible
worlds because until the child is eighteen, that money goes
into a joint account with a judge court ordered joint
account under a guardianship for a minor, and when the
child turns eighteen, the lid comes off and all the
money is fully available exactly.

Speaker 5 (10:41):
There's no there's no way of controlling how that gets
dispersed at that point, and it, like you said, if
it's a considerable amount of money and the child's eighteen.
You don't know what that what that child's circumstances are
at that point in life, or what their maurity level.
It is exactly exactly to be able to do that and.

Speaker 4 (10:59):
Do it well, let alone trying to protect that for
them and for their lifetimes. So you need to have
a trust established. You need to appoint trustees, you need
to have an executor under the will. And the third
prong is where is your child gonna live?

Speaker 5 (11:16):
Right? You need a guardian. You need to appoint a guardian,
and you'd rather be someone that you want rather than
having a court determine who they believe that that person
should be.

Speaker 4 (11:26):
Yeah, So trust planning, we're gonna there's gonna be a
theme throughout the show. Trusts are the things that we
can mold and craft and build that arc. Think, think
about our rainy day Noah, Yes, Lord, build me an
arc that's a built copy of routine.

Speaker 3 (11:45):
Forty cubans by eighty humans, by twenty humans. Right, it's
a great routreat.

Speaker 4 (11:50):
But the arc is what we're building in an estate plan,
and we're gonna make sure that we have our kids,
our grandkids are great grandkids all protected.

Speaker 3 (11:58):
When that rainy day comes and trusts are how to
do that.

Speaker 4 (12:01):
And I can't tell you if I had a nickel
for every person that came into me and said, well,
my brokers said just do transfer on death accounts and
don't worry about Okay.

Speaker 3 (12:11):
Well, a tod is cheap and easy.

Speaker 4 (12:13):
And Tommy, I don't know if you experienced this, but
when clients walk in our door, their estate plan is
based upon a snapshot of what is today.

Speaker 3 (12:23):
I have three kids, I have five grandkids. There are
all this, that and the other thing.

Speaker 4 (12:28):
But that plan is going to play out over a lifetime, correct,
So how do we get people across the threshold to
not just plan based upon today, but to look down
the road into the future and what that future may bring.

Speaker 5 (12:43):
So when I speak with my clients, I sometimes I
just turn it on them and I said, well, what
was it that gave you the motivation to walk through
the door today? And a lot of the time it's
that they're thinking about themselves. Well, you know, I'm getting
a bit older, and you know I want to make
sure I have everything place and you know gone forbid.
In the future. I need some type of health care,

(13:05):
long term care. I want to make sure everything's set
up so they're thinking about the acid protection, what do
they need to do. But at the same time, what
I say is, then, well, you also have to think
about your children. As you said earlier in the show,
your children are going to grow up and have just
as complex lives as you are, and we don't know
where that's going to lead them. They could be successful,

(13:25):
they can be unsuccessful, they could have tragedies, they could
have a number of issues that you are not going
to be able to foresee. So just as important as
it was for you to come in today and talk
about your own personal planning, you have to also think
about the people that you're going to leave behind, who
you're intending to benefit, and then also having to think about, well,

(13:47):
what are their situation, what's their situation going to be
like in the future when it actually comes time to inheriting,
and how do I set them up to be in
the best position to inherit everything that I've built and
worked so hard for in my life to give to them.

Speaker 4 (13:58):
So let's jump agnation. We started out talking about people
in their young ages twenties, thirties, maybe forties, having those
first children, looking at those children having a will that
appoints a guardian, creates a trust, appoints a trustee, has
an executor to handle the estate, all the basics that

(14:20):
need to be done through that will.

Speaker 3 (14:22):
And now we have a.

Speaker 4 (14:23):
Generation of newborns or children minors. But now we're going
to go upstream, as I call it, to the parents
and then the grandparents and look at what they can
do to make their plan air tight, water tight, build
the arc in their own documents, and how do we

(14:44):
create the legacy plan that we're going to talk about next.

Speaker 3 (14:48):
We're going to come back after a short.

Speaker 4 (14:49):
Break and we're going to walk you through planning for yourself,
for your children, your grandchildren, and how to set yourself
up so that they are protected. You are protected, and
the wealth that you've worked so hard to accumulate during
your lifetime is protected. We'll be back right after this.

Speaker 6 (15:08):
Would you like to meet with our attorneys for your
own planning?

Speaker 7 (15:11):
We offer free consultations at the office, by video conference
and by phone. Call Piero Conorance Strauss at five point
eight four five nine twenty one hundred. Piro Conorance Strauss
has loads of educational resources on our website where you'll
find videos, blogs, and free GUIDs on estate planning, medicaid,
long term care, business planning, and more.

Speaker 6 (15:30):
Find it all at pierolaw dot com.

Speaker 4 (15:33):
Have you been thinking of starting or updating your estate
plan but life keeps getting in the way. I'm Lupiro,
attorney at Piroconorance Strauss. We help people create estate plans,
including wills, powers of attorney, and healthcare proxies so that
when you're no longer able to make your decisions, your
loved ones know exactly what you want. Don't delay, make
your wishes clear. But failure to plan is a plan
to fail. Take the next step with a free consultation

(15:55):
so that when life happens, you'll be prepared. Calls today
five poet eight.

Speaker 3 (16:09):
We are back.

Speaker 4 (16:11):
I am Luke your host for this morning on the
radio Live with my associate Tomaso Morasco, and we are
talking about estate planning and legacy planning and that's going
to be the theme of the show, and we're talking
about trusts. And one of the things that our firm
likes to do is educate people. Educated clients are really

(16:31):
good clients because we want them to understand the nuances
the things that we do in the value of the
things that we do for them to their families and
to them during their lifetimes.

Speaker 3 (16:42):
And we have a workshop this Tuesday.

Speaker 4 (16:44):
It's coming right up, and this is kind of our
last chance to sign up for our trust Administration workshop.
And this workshop has been very widely, very well received,
and it's been something that people have come back to
us and said, you know, the first time I heard
about all this, I heard so many miss statements and

(17:04):
so many myths about trusts. And when I came to
the administration workshop and the attorneys and we actually have
an accountant that works with us, and we have a
trust officer from trustcoll Bank that works with us, and
Gretchen Gunther from Tilbecker and Shermante is going to be
on Tuesday night with me. I'll be doing the legal

(17:26):
piece and Michael Bates will be doing the trust officer piece.
But it's a complete ninety minute workshop on how trusts
actually operate. Look under the hood, see how it works,
get a feel for it. And if you want to
sign up this Tuesday, it's five thirty registration, six pm
to seven thirty program. It's at the Trustcolle Bank Center,

(17:49):
which is right off of Wolf Road Metro Park Road
in Albany, New York, and you can sign up at
pyrolaw dot com. Go to the events tab again pyrolaw
dot com events and you can sign up for the
Tuesday at six pm Trust Administration Workshop. You can always
call us at five one, eight four or five nine

(18:09):
twenty one hundred. Want to give the phone number out
one more time if you're thinking about this, planning for yourself,
planning for next generations. I know a lot of times parents, grandparents,
great grandparents come in Tommy, when we have that young grandchild,
how do I start planning for their education? Well, that's
part of it. Five twenty nine plans or a wonderful tool.
A lot of people set up five twenty nine plans,

(18:32):
but let's take it to a higher level and when
it's time to do your own plan. We believe in
trust planning because that keeps our clients out of court,
which we think is a good thing.

Speaker 3 (18:42):
And our clients agree.

Speaker 4 (18:44):
And so eight hundred eighty two five five nine four nine,
that's eight hundred talk WGY give us a call when
we look at it. A lot of times we're creating
a few different types of trusts and the basic trusts,
there are two. One is a revocable trust and one

(19:05):
is an irrevocable trust. And when I say irrevocable trust
to people, they start to go ooh, really really bad
things about that. Oh yeah, But let's break it down
and just give our listeners a little breakdown on revocable
versus irrevocable and the one I'm talking about now, we
design specifically for a purpose of asset protection. It isn't

(19:26):
really a tax planning vehicle if it maintains all of
the tax benefits that you have for yourself, but it
is an asset protection vehicle geared toward long term care.
So break it down Medicaid asset protection trust versus revocable trust.

Speaker 5 (19:42):
Absolutely so with the Medicaid asset protection trust the irrevocable trust.
There are few notable differences in highlights. Number one is
you're not going to be your own trustee, so you
would have to appoint a third party to be the
person who would manage the trust, and an minister the
trust on your behalf. Second is we have to limit

(20:04):
the access to the money, and that means to the principle,
you could still have income available to you, but the
principle cannot be used for the trust creator's benefit. So
the whole purpose of the irrevocable trust in order to
get the asset protection is that we have to create
some separation and distance between you and the asset so

(20:25):
that in the event that you need to apply for
medicaid and they are looking at your assets to evaluate
whether or not you qualify, those assets are not countable.
They are not something that could be used or accessed
four purposes of medicaid, whereas in a revocable trust, you
are your own trustee and you have unfettered access to add,

(20:48):
to remove, amend, or even cancel at any time. Now,
one of the biggest maths, as you said, people shutter.
They think irrevocable trust, I'm giving up my assets, especially
when we tell them bit about the principle and they think, well,
I can't do that. I need to have control, I
need to have access to this. What if I need something?
What happens? So most of the time people's largest assets

(21:11):
are real estate. So one of the biggest things that
we want to make sure is that that real estate
is protected moving forward. Now, in the scenario that we
posed with real estate, if we put it into the trust.
There isn't really much of a difference that you're going
to feel at first. I tell my clients the only
time you're really going to even notice that it's in
a trust is if ever you need to go and

(21:33):
sell it. But the great thing about the irrevocable trust
is that there's still powers that you have control over,
and there is still flexibility. It's not this rigid structure
that irrevocable you think of like this strong box that
nothing can permeate it. It's just completely the way that
you set it up. But you always have the right
to change and choose who your trustees are, and you

(21:56):
have the ability to go in and be able to
change who beneficiaries are. So with those two access points
that you have, you have a lot of leverage. And
also if people say, well, what happens now, Okay, it's
not just real estate. I put money in there, and
I need to access the money from the account, what happens?
Then there are ways that we've crafted to allow a

(22:20):
lifetime beneficiary, someone that you appoint to be able to
access the principle and take that money out. Once that
money is out and in their hands, they could use
it for whatever purpose is needed. They can't give it
back to you, but it doesn't mean that they could
not use it for something that you would require. So again, yes,

(22:41):
it's an irrevocable trust. I can't be my own trustee.
I don't have access to principle, but I can choose
ho I put in place, and then that person I
can also give the authority to be able to make
withdrawals of principle that could be used on my behalf
for things that I may need that money for, all
while getting asset protections that in the event that long

(23:02):
term care is needed, those assets are going to be
remain protected, but we also have an avenue to be
able to utilize them should they be needed.

Speaker 4 (23:09):
And you've left out one big piece of this, and
you're right. When clients come in their home is one
of the assets they really want to protect, and I
get it my dad. That's one of the reasons I'm
in elder law is my father, after I graduated law school,
said debt Son, we built this house, and they did.
They built it when the year I was born nineteen
fifty eight. We've paid off the mortgage and now we

(23:32):
want to protect it. How do we protect it? So
I went to a seminar down in Terrytown, which the
elder Law wasn't even a thing yet. It was a
committee on seniors for the Trust and State section, and
I learned from guys like Peter Strauss, our partner, and
others that were teaching how to do the asset protection.
And this goes back thirty five years, so it's been

(23:53):
going on a long time. And when you have the
house and the trust, you have full rights to that house.
No one can tinker with your right to the house.
Correct You keep your star exemption, your veterans exemption, capital
gains exemptions on sale, all of those things stay present.
When the kids inherit the house, it gets a step
up in basis, no questions easy with regard to the

(24:13):
house when you have liquid assets. If it is your
children who you're relying on here, I love telling parents
that you can look at your child and say you're
fired because you're.

Speaker 3 (24:24):
Not doing what I want.

Speaker 5 (24:24):
They really get exactly right.

Speaker 4 (24:26):
And that's exactly what happens. They can remove that child
if they're not acting appropriately and according to their wishes.
They can remove the trustee input in someone more favorable.
But more importantly, they can remove the child as a beneficiary. Correct,
So it's enormous control over that trust, and yet it's
still protective. And in New York, we know, Tom that
we actually have a statute that says you can revoke

(24:48):
an irrevocable trust.

Speaker 5 (24:49):
That's the last part exactly. There is a means of
being able to revoke it, even though the title seems
to be a bit misleading.

Speaker 3 (24:58):
And in the asset protection world, going to take a
short break for the news.

Speaker 4 (25:02):
The one asset that we're gonna come back and talk
about because almost everyone in that we do a seminar
of one hunred and twenty people one hundred nineteen raiser
hand they have an IRA or a tyrel one or
a four or three B a retirement account, and we're
gonna come back and talk about retirement accounts and how
they fit into a plan. How do you protect them
during your lifetime, how do you protect them for the
next generation, making sure they're inside the arc where they're

(25:25):
protected and they're not gonna get sunk. So we'll be
right back. Stay with us for the second half of
the show. I'm Lupiro with Tom Morasco. You're listening to
Life happens radio every Saturday morning at nine am here
on talk radio WGY.

Speaker 8 (25:43):
The WGY accurate. The forecast is going to be nice
with a mix of clouds and sunshine, getting to seventy
seven degrees, steady rain overnight into the first part of
tomorrow low fifty eight, and then the rain becomes more
intermittent Tomorrow afternoon sixty four. Still a shower around on Sunday.
Other eyes, clouds and sun sixty two, seventy two with
a passing shower Monday. From the WGY Weather Center, I'm Meteoral,

(26:07):
just Jeff Nordine.

Speaker 3 (26:18):
Thanks guys.

Speaker 5 (26:18):
We asked for some rainy day be music shooting.

Speaker 3 (26:23):
This is rainy day Mondays, but Mondays are sunny. It's
it's kind of amazing.

Speaker 4 (26:28):
If you're meteorologists, go back for the last four months
and look at how many sunny Mondays we back and
rainy Saturday Sundays. It's just it's really incredible when you
look back at So when life happens, weather happens, be prepared,
have an indoor activity, something that you can do. I'm
going to the gym after this and gonna work out
all my frustrations there.

Speaker 3 (26:50):
Give us a call eight hundred eight two five five
nine four nine.

Speaker 4 (26:53):
It's eight hundred talk WGY one more time eight hundred
eighty two five fifty nine forty nine. Be happy to
take your call, answer your questions. Don't forget the Trust
workshop this Tuesday, coming right up this Tuesday at six
pm at the trustcoll Bank Center right off of Wolf
Road and that is six Metro Park Road. If you

(27:14):
want the address, six Metro Park Road, Tuesday, six pm,
sign up at purolaw dot com. We're talking about protecting assets,
looking at our own planning, and that's kind of where
we finished the first half of the show, looking at
a revocable trust, a Medicaid asset protection trust, and Tom
I could go through the list of trust and trust acronyms.

(27:35):
When we have a problem as a as an estate planner,
the solution is almost.

Speaker 3 (27:39):
Always a trust.

Speaker 5 (27:41):
That's that's right, and that's tax.

Speaker 4 (27:43):
Planning, that's asset protection planning, that's proad avoidance management of assets.
The irrevocable trust aka Medicaid Asset protection trust is thought
about by people.

Speaker 3 (27:55):
They hear things, you know, from their neighbor. You're out
mowing the lawn.

Speaker 4 (27:59):
Oh I just talked to this lawyer and he told
me about a trust, but it's too restrictive, or I
heard this about somebody who tried.

Speaker 3 (28:07):
To do this on their own and it didn't work.

Speaker 4 (28:10):
When clients come in and they've heard about all that,
we try to get them interested enough to come for
the consultation. And folks, you can't really know what your
situation is and how the law applies to you without
going through that consultative process. And the consultative process means
that you fill out a questionnaire for us. You tell

(28:33):
us about yourself, your spouse, your situation. Do you have
a life partner, do you have a spouse, are you married,
are you thinking about getting married? Do you have children?
Is it a second marriage where you have children from
two different marriages. Everyone's situation from a family perspective is unique,

(28:53):
and Tom, this gets really important when we start looking at, Okay,
who is going to be my trustee?

Speaker 3 (28:57):
How am I going to structure my beneficiaries? It's unique.

Speaker 4 (29:01):
And then you look at the assets that you have,
and we talked about the house and maybe the vacation home.
Trust planning for those is essential. We look at other assets,
brokerage accounts, bank accounts, all the things that we have
in our lives. Those things need to be protected, and
some of those will go in the trust. Some of
those will stay in our name if we're using a
Medicaid asset protection trust. And I kind of finished with

(29:25):
the third category of assets. And when we do this,
when we sit down with our clients, we sit down
and draw a flow chart. And this has been something
I've been doing for thirty years because a picture paints
a thousand words, and it's very hard to understand the
concepts without seeing a diagram that says, okay, oh, there's
my house in the trust. There's my vacation home on

(29:45):
the lake in the trust. There's my brokerage account in
the trust. Those are protected and your trustee is going
to manage those. You can keep the income from those,
and if you need to get principle out of that trust,
it can come out through your trustee and your other beneficiaries,
so you can maintain access to principle. On the left

(30:05):
side of my diagram is a big circle and into
that circle goes iras four one ks, four three b's.
And this has become Tommy in my experience. The number
one or two asset, either house or the IRA becomes
the most important asset for that person because we don't
have pensions anymore. Unless you work for a government agency,

(30:26):
you don't have a fixed pension, and so we're relying
on that IRA and four one K.

Speaker 3 (30:31):
But in New York those get special treatment.

Speaker 5 (30:34):
Yes they do, because those don't go into the trust
because the principal value, provided that they are in payout,
are not accountable resource for Medicaid qualification purposes, which is
a huge deal. So that means whatever the big number
is the pot of what you have in your retirement account,
it is not countable resources for Medicaid purposes provided it's

(30:58):
in payout. They will look at the income that gets
derived from that your RMDS, and there are certain rules
about that when you have to go on Medicaid, but
for the principle that you do not need to worry about.

Speaker 4 (31:09):
So when we draw a diagram, we have three buckets
of money, if you will, and one of them is
fully protected because the law protects it. Iras stay in
your name. You don't have to run to a trustee,
you don't have to run to anyone. That's your asset,
and you always have one hundred percent unfettered access to
your retirement accounts. Now, that is unique to New York State.

(31:31):
If you're listening to this program in Vermont or Massachusetts,
where I know this station carries, these rules are very
very different, and iras are not protected in those states.
So we have to be cognizant of what state we're in.
In New York, the iras are mine. I don't have
to do anything with them. I sit on them.

Speaker 3 (31:49):
They're right there.

Speaker 4 (31:50):
We're going to talk about how to layer them in
as to beneficiaries and the complexities there. Tommy, we'll talk
about that, But for right now, that IRA is staying
right where it is and I can access at any time.
The middle bucket is my bank accounts, my broken account.
How much money do I want to keep there? Because
Medicaid allows me to keep thirty two thousand dollars, so

(32:10):
that's kind of the floor, but I'm probably going to
want to keep seventy five or one hundred thousand dollars
there for my own personal expenses, and I don't need
to go to the trust for that money that's just
sitting in my bank accounts.

Speaker 5 (32:21):
Correct.

Speaker 4 (32:21):
And then the excess, the unprotected assets are what go
into the third bucket, which is our medicaid asset protection trust.
So when you put those three concepts together, I can
keep a certain amount of money in my name exempt,
I can keep my iras fully exempt, and I can
put the rest in the trust and protect it. Once

(32:43):
people see that and you plug in their assets, their people,
their trustees, their beneficiaries, they'll walk away and say, I
didn't know it was this easy to do asset protection.
And we get that response time after time after time,
all the time. The place to get this answer is

(33:04):
the consultation. So we would encourage you to come in
and it's free, no obligation. You can get your diagram,
you go home with it. You can study it and
make your decision as to whether you want to do
asset protection planning or talk about the other type of
trust time, the revocable trust.

Speaker 5 (33:19):
Absolutely, And every time I sit with my client I
tell them that the whole purpose of this meeting is
to provide you with an education. I am going to
look at your specific situation, your assets, your family, and
I will tell you everything based on what you tell
me your concerns are and what I can gather from
the information, and we make recommendations from there, but we'll
give you all the information. So we gave the information

(33:41):
about the Asset Protection Trust. Sometimes you have some skeptics
still who are just hard to digest that they need
to just sit on it or chew on it for
a minute in order to truly process everything we've gone over.
But then on the other hand, we have the revocable trust. Now,
as I said earlier, the revocable trust has a lot
more control and flexibility because you're your own trustee. You

(34:02):
have the right to add, to take away, modify, or
cancel it all together unilaterally by yourself, without the need
of any other trustee, no limitations on what you can
access and what you can do with it. And it's
a great tool for probate avoidance, so we don't have
to go to court. We can still put assets in there,
we still go through the whole scheme of what should

(34:22):
go in, what could stay out, But we want everything
to eventually flow through that trust so that we can
also do our legacy planning, which we'll get into shortly.
And the revocable trust, however, does not provide you the
asset protection because when medicaid is going to be looking
at this trust, they're going to see that you have
unfettered control and discretion over everything. So whether or not

(34:45):
it's in the name of a trust, they're going to say,
it is completely available to you, and hence it's also
available for your care, and you would not qualify for
Medicaid purposes.

Speaker 4 (34:55):
And there are different situations that would make the revocable
trust the first choice. Yes, there is a type of
long term care insurance, and insurance is a big part
of that conversation. The first question we ask is do
you own long term care insurance? Nine out of ten people,
probably nine and a half out of ten people say

(35:17):
it's true they don't own long term care insurance, and
so are they of an age where they want to
consider buying it. Well, they can buy certain types, but
as our friend Bob Vandy, who comes on this show
regularly talks about, there is only one company left selling
it other than you know, exclusive companies that you have
to be an agent of that company. But if you

(35:37):
want to be a broker of insurance products, there's one
company and it's Mutual of Omaha. So when you look
at it, the limited options to buy long term care
today may make you lean towards life insurance or other
types of products, and those are viable, and we tell
our clients shop look for those types of products. They're good,

(35:58):
solid products. You can buy a life insurance policy that
provides long term care protection. And if you are adequately ensured,
if you have enough cash flow in retirement, and these
are the key factors. Do you have enough cash flow
in retirement combined with insurance benefits to private pay without
depleting your assets, then the revocable trust is.

Speaker 3 (36:21):
A good vehicle for you.

Speaker 5 (36:23):
Absolutely.

Speaker 4 (36:24):
And so that's the analysis that we go through with
our clients. We need to know what their incomes are,
not just if they're working, what the income in retirement.

Speaker 3 (36:32):
Is going to be.

Speaker 4 (36:32):
We need to project that out and we do. We
sit down, we do a calculator. Here's a security benefit,
here's a pension. If you don't have a pension, here's
your IRA minimum distributions. Here's what you can expect to
have the shortfall today, Tom, we're comparing it now against
the seventeen eighteen thousand dollars a month obligation.

Speaker 5 (36:49):
A month, yeah, per month exactly.

Speaker 4 (36:52):
And not many people can say that, Okay, I'm self insured.
I can cover that seventeen thousand dollars a month nursing
home bill. Correct, so we have to supplement that and
Medicaid trust then becomes part of the conversation. But a
revocable trust for those that have Partnership long term care insurance.
And every now and then I get a client coming in,

(37:12):
and I just had one come in a couple of
days ago for a second opinion on their plan because
their attorney did a revocable trust.

Speaker 3 (37:19):
And they said, is that enough?

Speaker 4 (37:20):
Should I have an irrevocable trust? And I said, okay,
why did they tell you? I don't know why they
told me a revocable trust? So I said, we went
through the conversation and I said, do you have long
term care insurance?

Speaker 3 (37:33):
And they said yes. I said, did you bring it
with you? It's always a good idea to bring it
with you, folks. They said no.

Speaker 4 (37:40):
I said, okay, can you tell me about the policy
and they said, well, I bought it thirty years ago,
and you know, here is the benefits and I've reduced
benefits because the premium got too much. But it has
I said, does it have this little logo on it?
The Partnership for Long Term Care which is two stick
figure shaking hands. And they said, well, yeah, I remember
that that's on there that gives them one hundred percent

(38:00):
asset protection in New York. Yes, so they don't need
an irrevocable trust. They don't need an asset protection trust.
They're fully asset protected with their insurance policy. And it's unfortunate,
but you can't buy that partnership plan anymore in New
York State. So when we look at it, you're comparing
revocable irrevocable. This is building the arc. My spouse and

(38:22):
I are going to get on the arc. We're going
to be protected, and you know, we're going to sail
through retirement and I'm going to have the ability to
utilize my income and I'm going to know that my
assets are protected, so I'm not at risk if I
have a long term illness. So I'm not going to digestitute.
The last thing you want is to run out of
money because you paid these long term care expenses and
leave no legacy. So now I've shored up my plan.

Speaker 3 (38:46):
I'm in the arc.

Speaker 4 (38:47):
I'm going to stay afloat. But now who else can
I bring into the arc when my trust ends? Tommy,
what are my options with regard to naming beneficiaries, whether
it's children, nieces, nephews, how can I protect them?

Speaker 5 (39:02):
So that's where we talk about our legacy planning. And
we were talking earlier about people who think about making
outright gifts, but that doesn't give them any protection. Once
a individual inherits money outright, it is then subject to
any of the issues that they could become open to.
It becomes it's still a risk for them. Again, we

(39:24):
don't know what their situation is going to be like.
And I tell my clients this, You're coming to me
to tell me how do I get asset protection for myself?
But then you also want to think about, well, how
can I do that for my children, my loved ones
who I want to pass this along too. And this
is where we get into the discussion about beneficiary controlled trusts,

(39:45):
and this is how we do our legacy planning. So
rather than leaving an individual outright, we leave it to
them in a trust. And the reason we do that
is because when it's wrapped in this trust, they inherited
in an asset protected manner. So where we're here in
this meeting trying to get that acid protection for the

(40:05):
client and especially when it comes to Medicaid, we also
have to be cognizant of the five year look back
for our beneficiaries. They don't have to worry about that
if they are inheriting it through this trust vehicle, they
are inheriting it in something that's already acid protected. That
means no judgments, bankruptcies, divorces, or even if they ever
needed some type of government based aid in the future,

(40:28):
none of the principle in that trust could be touched
or used against them or accessed. So it is a
very powerful tool for legacy planning.

Speaker 4 (40:38):
It's become my favorite topic in talking to parents because
I have children who are getting married, and that's true
the thing you think about when I'm leaving a legacy
to them, I want to leave it to them, and
if I have grandchildren, I want to make sure it
gets down to my grandchildren. This is for me a
very personal thing. But we've been doing BCTs, and that's

(40:59):
the term we use an acronym for Beneficiary control trust.
We've been doing them for twenty years plus. And in
New York it was a result of a case that
came down that said you can have a child as
their own trustee and still have the assets protected from creditors.
That was a controversial topic for a long time. Yeah,
but it's more or less solidified under New York law.

(41:22):
And so we create these trusts, the kids can have
one control, be their own trustee, manage the assets for themselves.
We can give the children the power to choose the
ultimate beneficiaries. Or if you're Italian like us, Tommy, you
want to keep it in the bloodline, you want a

(41:42):
bloodline trust. It's not going outside of the family on me.

Speaker 3 (41:46):
Yeah.

Speaker 4 (41:47):
So if you're like me, my kids, I want them
to have as much freedom and independence over the trust
as possible. And so I've given them and this is
my plan for so I'll tell you exactly what it is.
That's a revocable living trust with these beneficiary control trusts,
and I'm allowing my children to be their own soul trustee.

(42:08):
They can manage the money for themselves, they can use
it as they need it, and they can choose their
own beneficiaries. So there is literally no difference between inheriting
through this trust from a control perspective and an access
perspective versus just putting it into their name. But there
are major differences with who else can access that money.

Speaker 5 (42:28):
Tom, That's very true, and that's why this is so
important because a lot of the time they think, well,
I want them to be able to have access. I
want them to be able to have the comfort. I
want them to have the things that I had to
work so hard for. And that's great, and this is
a way that you could do that but also keep
it protected for them. And I get all the time.
It's not that I don't love my in law or

(42:48):
anything like that, but you know, just in case, and
I have grandchildren exactly, and we all understand. But the
way that this is structured is that your child, your
loved one, will have the access. They are their own trustee.
As they need it, they will be able to tap
into it and it stays there. And like I said earlier, nothing,
no other situation that comes up is going to be

(43:12):
able to permeate that barrier that you've put between their
inheritance and any outside risk that they could ever come
across in their future.

Speaker 4 (43:23):
And I am so blessed to have three children who
are educated, independent, They're healthy, that's the biggest thing. They're working,
and they each have great relationships. One is married one
is engaged and I'm assuming anticipating the other will be
engaged within the year. So we love their partners, We

(43:46):
travel with them, we do things together. We love the
whole family. We call it the eight pack. There are
eight of us and we do a lot of things together.
But the family still comes first. And that's something my
father taught me. Because you never know, life happens, and
you don't want your arc to spring a leak. You
don't want the assets leaking out in a messy divorce proceeding.

(44:07):
You want to make sure that you've protected your children
and your grandchildren, protected the next generations and your great grandchildren.
This plan can go on and can last. And when
I sat my kids around the table when I was
doing my plan several years ago, I said, okay, kids,
here's the deal. I can leave everything to your outright,
in which case you then have to go out and

(44:28):
each of you will have to do your own planning,
do a will, do a trust, you know, figure out
what to do with the assets that you inherit. And
you can't protect them because New York doesn't allow you
to protect your own assets. You can't do this for yourself.
And that's an important point that a lot of people miss.
You cannot do this planning for yourself, but you can
do it for others. I can do it for my children,

(44:51):
and I can put in a trust where you're the trustee.
You manage it, you use it, you can use it anytime,
you can invest it how you want it, and no
one else can touch it. And they looked at me, Dad,
is that a trick question? And I said no, that
those are your options. So it was an easy choice
for me. They made it easy. And you know, hopefully

(45:12):
you're able to have those crucial conversations because this topic
is that important. We're gonna take a short break. We'll
be back for the last segment of the show, so
stay with us. I'm Lupiro on with Tom Morasco from
Pier O'Connor and Strauss. You're listening to Life Happens.

Speaker 3 (45:28):
Be back after this message.

Speaker 7 (45:30):
Do you have a question for our attorneys? Want to
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Speaker 9 (45:42):
Family disputes ca interrupt for many reasons, but usually involve
money or access to mom or dad. If this happens
to you, you need a lawyer who knows his way
around the courtroom. I'm Aaron Connor, managing partner at pier
O'Connor and Straps. Our experienced litigation team can help you
with will contests, trust disputes, guardianship or other legal challenges.
Protect yourself and your family. Call Piero Connorance Strauss so

(46:05):
when life happens, you'll be prepared.

Speaker 6 (46:06):
Would you like to meet with our attorneys for your
own planning.

Speaker 7 (46:09):
We offer free consultations at the office, by video conference
and by phone. Call Piero, connor and Strauss at five
one eight four twenty one hundred.

Speaker 4 (46:27):
All right, welcome back, Lukero Tom Rasco. We have about
eight minutes left.

Speaker 3 (46:32):
Tommy.

Speaker 4 (46:33):
We've covered building the arc. Today's soggy theme here on
this rainy Saturday, another green Saturday. But you know, into
every life a little rain must fall and beneficiary control trusts.

Speaker 3 (46:50):
Are the ultimate umbrella when when your kids have a creditor.

Speaker 4 (46:54):
Problem, you know they have they get sued, they get
in a bad accident, they get sued, they have credit
or issues, they go bankrupt or they need medicaid themselves,
and you want to protect the assets or on the
flip side of this time, my kids, I hope they're
all wildly successful in a mass great fortunes of their own,

(47:17):
but then they're going.

Speaker 3 (47:18):
To be in an estate tax situation, that's right.

Speaker 4 (47:21):
And when we layer in tax planning on top of this,
how do these assets weigh in on my children's own
estate tax plan.

Speaker 5 (47:31):
Well, if we put them in the trust, that's not
something that we're going to need to worry about, thankfully.
But if we leave it to them outright, that's another
matter because now it becomes part of their state, it's
includable in their assets at the time of their passing
and will count towards that evaluation on whether or not
state taxes do so.

Speaker 4 (47:49):
BCTs protect assets for the children, whether it's a litigation,
a bankruptcy, a divorce, medicaid planning, tax planning. These are fortresses.
These are things that you can build for your children
that they have one hundred percent control and access to.
And a lot of people think of trust, Oh, they're

(48:09):
only for rich people. Well, okay, so if you're leaving
your child three hundred thousand dollars and they blow through
all of their own money and they're getting sued. Wouldn't
it be nice for that three hundred thousand dollars to
be protected or one hundred thousand dollars to be protected.

Speaker 3 (48:26):
Or whatever the amount is. Keeping it protected is so important.

Speaker 4 (48:31):
And you know, I don't have a personal story as
a beneficiary, but I've always thought that if my parents
were not wealthy people, they owned a home and that
was kind of the legacy, which was great.

Speaker 3 (48:45):
But if I ever had.

Speaker 4 (48:46):
An ability to inherit money, I wouldn't want to dump
into my bank account because I know how hard it
is to try to plan for.

Speaker 5 (48:53):
That, right, and so go ahead, No, And it's to
take it one layer further than just grandchildren, but thinking
of grandparents, because a lot of the clients become in
our parents that do you know, have that situation where
they're fortunate enough that they still have parents and their
parents might have amassed something, and so we're sitting here

(49:15):
dealing with the we'll call it the middle generation, right
we have grandparent parent and call it grandchild. We're sitting
there with the parents. And that's one of the questions
I asked them too, if if their parents are still alive.
I'm like, well, is there any expected inheritance that you
could be coming into And then okay, well what is
what are your parents' plans look like? Because how they
leave it to you is going to impact the planning

(49:37):
that we're going to be doing for you and your children.
So it's it's it's all relevant. And and you make
a good point, lou Is that if people have that ability,
it's it's really crucial to get them all in above.
I was fortunate enough that, you know, my my parents
are still with me, and I had to sit down
with my father too. He's an immigrant from Italy, but
you know, he's he's always been an entrepreneur and he's

(49:58):
always they've done well for himself. And I've had that
conversation with him as well. I'm like, you need to
think about it. I mean, obviously it's in your hands,
but what is it that is most important to you
and what is it that you're looking to accomplish? And
it's important to get that into the conversation as well.

Speaker 4 (50:13):
Absolutely, And this we can tie the whole theme together
if we go back to our newborns and new parents
and we think about those grandparents wanting to plan for
the grandchildren and wanting to benefit the children. When you
structure a beneficiary control trust, it becomes a family trust

(50:35):
for each branch of the family. So three children, when
your own trust breaks, when my revocable trust or mitigate
asid protection trust breaks upon death, it doesn't end. It divides.
It divides into three shares. Each of the children gets
their own share, and then their children are beneficiaries of

(50:58):
that trust simultaneously. So that asset protection trust you can
leave in your child's hands, leave the money fully protected
and have it available so that they can use it
to pay for college tuition or healthcare expenses, or helping
their child buy a home or start that business. The
beneficiary control trust have that flexibility that their entire family

(51:20):
is going to be in the ark, in the boat
with them and is going to have the ability to
access those funds.

Speaker 3 (51:25):
And to me, Tom, that's so important.

Speaker 5 (51:30):
Yeah, it's it's crucial. That's that's that's what it's all about, right,
That's what everybody, that's what we live for. That's everybody's
why and their and their purpose and why not take
that extra step to make sure that we are doing
everything that we possibly can to ensure that it remains protected.

Speaker 4 (51:48):
So if you'd like to get more information on any
of the topics that we talk about, I just want
to plug our website. We do a lot of work
on it. We spend a lot of time on it.
We write blogs, we write articles. All appear on our website,
and we have a handout on beneficiary control trusts.

Speaker 3 (52:05):
And this is kind of the add on to your
own estate planning. Whether you're doing a.

Speaker 4 (52:10):
Revocable trust or a Medicaid asset protection trust, the capstone
to that plan can, and in many cases should be
the beneficiary control trusts for each of your family members.
And there's a lot that goes into this planning tell me,
and that consultative process is the absolute key walking through
all the issues and making sure that our clients are

(52:32):
fully apprized of all of.

Speaker 3 (52:34):
The possibilities and the things that they can do. Got
one more minute, anything else you want to add?

Speaker 5 (52:41):
Now, I'll just make sure we continue the two by
twos into the boat and latch it up, making sure
it's nice and secure and we're set sail right and
keep on that water and keep it out too.

Speaker 3 (52:53):
Yeah.

Speaker 4 (52:54):
Absolutely, So everyone join us Tuesday at six pm for
our Trust Administration workshop. We also have Dedicade Monday coming
up on June ninth. That's Frank Hemming talking about Medicaid issues.
We try to keep our educational program going, so go
to purolaw dot com go to the events tab and
you'll see all of the upcoming events. Thank you for

(53:15):
joining us again this Saturday morning. Radi as it is,
but hopefully little sun will come into your life tomorrow.
The next day the sun will come up. I'm not
going there, so have a great weekend. We hope you
enjoy be back next week.

Speaker 2 (53:31):
You've been listening to Life Happens Radio. Well to you
by the law firm of Puro, Connor and Strauss. For
more information or to contact an attorney at the firm,
visit Piro Law dot com or call five point eight
or five nine twenty one hundred. Please join us again
next Saturday at nine am for Life Happens Radio on
News Radio eight ten and one oh three point one

(53:52):
WGY and you will be prepared.

Speaker 3 (53:57):
Wgyam skin oc tod w y f m all.

Speaker 1 (54:01):
But they