Life Happens Radio with Hosts: Lou Pierro and Tom Marasco

October 11th, 2025. 

Episode Transcript

Speaker 1 (00:01):
And good morning everyone. Welcome to Life Happens Radio. I'm
A Lupiro, your host for this morning, and I want
to welcome you all. If your first time listener, this
show is about you. It's about your family. It's about
the things that you have that you want to make
sure get to the right people in the right way.
It's about preserving your autonomy, keeping yourself independent, making sure

(00:22):
that you have a plan in place, making sure that
if you have children, the children would be taken care
of if something happens to you, making sure that your
spouse is taken care of, making sure there's enough money,
and if you're incapacitated, if you have an accident, an illness,
an event, making sure you have the right decision makers
in place. We call this whole topic of state planning,

(00:46):
and today's show is going to be talking about estate
planning and how you should be looking to arrange your affairs.
And we're going to open up the phone lines take
your questions. I'll give out the phone number right now
if you want to just jot it down. It's eight
hundred talk WGY. That's eight hundred eight two five five
nine four nine again eight hundred eight two five fifty

(01:09):
nine forty nine, and I am with the firm of Pierre,
O'Connor and Strauss. We're based here in Latham. We have
offices around New York State. We practiced in several states, Massachusetts,
New Jersey, Connecticut, Florida, and this is what we do.
We do a state planning. So we try to make
sure that our clients are well informed, that they're well advised,
and that they do more than think about a plan,

(01:30):
that they execute on it, because a plan in your
head does your family no good when you're not there.
So today I have a very special co host with me,
Tom Morasco, who's joining us from Long Island. Good morning, Tommy,
Good morning Lou.

Speaker 2 (01:47):
Thank you for having me.

Speaker 1 (01:48):
It's a pleasure to be working with you. I worked
with you yesterday in our New York City office at
to sixty Madison Avenue in Manhattan. We we had a
day down there yesterday that I was in the office,
and today we're on the radio, so welcome and again
we're going to take your calls, so keep their phone nearby.

(02:09):
We're going to be talking about things that impact all
of us at some point in time. And Tommy, the
theme of this show, and we've been doing this for
now for over fourteen years, and the theme of the
show is life happens. Are you prepared? And people ask, well, what, No,
that's a great name, that's clever name. And now, fourteen

(02:30):
years ago nobody was using life happens. Now you see
it on commercials, you see it all over the place.
They didn't copyright it fourteen years ago. But it's a
derivative of another term. And if you think back to
Forrest Gump, tom and you think of when he was
running down the road and they asked him about life
and he said, it happens. Yeah, well you know what

(02:53):
it is and it gets on your shoe. And so
we couldn't say that on the radio, so we said
life happens. Because every damn day, Tommy, we have people
walking into our offices saying, my husband was in a
car accident, my mother just had a stroke, my father
just got a diagnosis of Parkinson's disease, and all of

(03:15):
a sudden, And if you've been through this, folks, you
know what this feels like. Your world is turned completely
upside down. And if you're not prepared for that, if
you're not prepared for that event, for that diagnosis, for
that critical illness, then you're gonna get caught short. Your

(03:36):
family's gonna get caught short, and you're gonna have issues
that are just gonna be irresolvable in a normal day,
and your family members are going to be wondering what
to do. And if you don't have a good, tightly
woven plan, you're leaving the door open for a lot
of problems.

Speaker 2 (03:55):
Tom, It's true.

Speaker 1 (03:57):
And so when we look at a state planning and
we look at planning for our clients and how we
can best serve them. And if I ask you this question, Tom,
if you come up, if a client comes in and
has an issue in the planning realm, what is the
one vehicle that we use that applies in so many of.

Speaker 2 (04:18):
These situations, That would be the trust.

Speaker 1 (04:21):
A trust, And people hear about trusts. A lot of
people don't really understand trusts. People have questions. So if
you have a question about trusts, today's show is your
time to get an answer. And Tommy and I will
take that question at eight hundred eight two five, five,
nine four nine. So Tom tell our listeners what is

(04:43):
a trust and why is it better than having no trust?
Whether you have a will or you have no will.
A lot of clients come in and say, well, I
don't have anything. I'm seventy years old, I've never done anything. Well,
time is now today, Why is the trust better?

Speaker 2 (04:58):
So a lot of the misconception around trusts is that
it has to do with people who are only extremely wealthy.
And that's the first misconception that I'm always faced with. Well,
I don't think I really qualify for a trust. I
don't know that I have enough to establish a trust.
Only rich people That's what the people think right now.
But then they are a multifaceted tool, and they can

(05:21):
be honed in one of or many several ways that
could be serving multiple purposes. So, whether that is simply
probate avoidance, which I'll get into, whether that's long term
care planning, or even if it is for high net
worth planning, they can fit a lot of different molds.
So a trust is a vehicle that works or looks similar.

Speaker 1 (05:45):
To a will.

Speaker 2 (05:46):
It is a document that names someone who would be
in charge in the event that you're unable to serve
or an event of your passing. It also dictates how
your assets would pass to whom and how But the
major difference here is that I don't have to get
a court involved, So it makes the transfer of power

(06:07):
a lot smoother and there's a lot more flexibility. Now,
if a person dies with assets in their name alone,
it requires something called probate, and that means that I
need a petition a court to get their approval to
appoint someone who's supposed to be in charge of that
person's estate, who is then authorized to marshal all the

(06:28):
assets and then distribute them pursuant to the terms of
your will, and if you don't have a will, then
pursuant to the default laws of intestacy for that state.
So it's basically going to go to your closest of kin. Now,
the problem with the probate process is that it's very lengthy,
and what people don't realize is that it's not simply

(06:49):
the costs that are incurred to let's say higher attorney
or file a petition or court filing fees. But the
fact is that you could be sitting on a particular asset.
Let's use real estate for example, because that's usually people's
biggest asset. You're sitting on this asset for downstate at
least for upwards to a year or more. So now
those real estate taxes are coming in, the carrying costs

(07:11):
are coming in, and where's that money coming from? And
while we're in this probate process, this asset is locked.
We can't do anything with it until we get our
court approval.

Speaker 1 (07:21):
So whether you.

Speaker 2 (07:23):
Don't have a will or you do have a will,
we're gonna be in that boat.

Speaker 1 (07:27):
Now.

Speaker 2 (07:27):
The problem with not having any type of document is
that there are people who could end up with your
assets whom you've never intended or ever wanted to have
your asset.

Speaker 1 (07:35):
They used to call them when I was in law school,
laughing airs, It's true, Uncle John died and you're getting
a million dollars. Really, I didn't even know uncle John.

Speaker 2 (07:44):
Exactly, Yeah, exactly, it's true. So a will is a
step up better than having nothing at least because this
way you're still in some way formulating your wishes in
a place that you know at least your assets will
go in that way. But would they trust I can?
I can solve all those problems. I can name who
I want. I have the flexibility of how they're going

(08:06):
to get it, and I don't have to get the
court involved, which means there's no weight period, which means
the carrying costs are going to be limited. So it's
not that there's no cost. But if I don't have
to go through a court and I don't have to
wait a year before I can do something with an asset, well, hey,
that's a huge advantage. And that's the major what's one
of the major features of the trust and why it's

(08:27):
so powerful.

Speaker 1 (08:28):
So let's take a step backwards, because a trust is
a document, right, and we're hearing now and we're reading
and it's it's like, Okay, it started to sprinkle a
few years ago, but now it's raining pretty hard and
in a few years it's going to be a downpour.
And that is aim the show right before us talking

(08:50):
about AI and productivity. Well, part of productivity is lawyers
working to do things, and AI is jumping in. People
are creating new ideas, new companies for AI. But when
we do a trust, it isn't just a document.

Speaker 2 (09:08):
No, it's not.

Speaker 1 (09:09):
You can get a form trust and it might be
pretty good. It's not going to be your trust. It's
not going to be tailored to you.

Speaker 3 (09:15):
No.

Speaker 1 (09:16):
But what we're going to talk about today is how
and why a trust works and how you have to
arrange your assets, your home, all of your other assets.
How do the things that you own play together with
the trust. So that's going to be one of our
themes for today. And I'm going to keep putting the
phone number out there till one of you calls me.

(09:37):
So give us a call if you have a question
on trust. It's eight hundred eighty two five five nine
four nine. And the trust itself, Tom is the document.
How does that document work, when is it done? How
is it done? And what steps do you take when
you're doing your trust?

Speaker 2 (09:56):
That's those are all very important points. So for off
any at any point that you've accumulated any sort of assets,
you've purchased, a home, you have, or you know certain accounts,
and you have beneficiary that you want to leave it to,
it's always the time to evaluate the trust and which

(10:17):
trust would be perfect for your needs. So a lot
of these A lot of times the other thing is
well when do I need to start? And we were
talking you said earlier in the show. Sometimes people usually
wait for there to be an issue that is not
the time to do planning. That's called chaos. Planning. That's
that's that is you know risk aversion. That's not risk aversion,

(10:37):
that's reacting. So you want to be proactive. So the
point is is the best time to have done planning
is yesterday. The next best time is today. So with
the trust, how it's established is we would appoint again,
we would evaluate your particular circumstances. But that's evaluating everything.
We look at what assets you have, how they're held,

(10:59):
where they're situated, and the point is we have to
tie them all together. I've also had clients who came
in who have done those form trusts. Lough like you've said,
they think like, oh, I have a trust, I'm set right.
I'm like, okay, well that's a start. So what's in
the trust? And they look at me and they're like,
what do you mean? I mean, what did you put
in the trust? And they're not aware of that. In

(11:21):
order for a trust to be effective, it needs to
be funded. And that is at least lou I could
say from as far as our firm goes, is that
we take extra steps to make sure that not just
that the trust is established. Again, We're not just here
to provide you with a document you can do that
anywhere we provide you with a service, and regardless of
whatever AI advancements come in, I don't think that portion

(11:45):
of it's ever going to be replaced.

Speaker 1 (11:46):
And you just said a magic word, Tom, and that
is the legal profession is providing a service.

Speaker 4 (11:54):
Correct.

Speaker 1 (11:55):
It isn't a document, no, it's a plan absolutely. And
when we look at the plan, I refer to this
now more and more frequently because it just encapsulates the
thought process that we go through as attorneys with our clients.
We conduct a very thorough interview and then we're drafting

(12:15):
an agreement. It's a trust agreement or contract. And depending
upon the type of trust, that client may be their
own trustee, they may have other people that need to
be trustees. They're going to determine what happens not only
at death. And I think a lot of people don't
really understand death isn't the only thing that can happen

(12:37):
to you. When life happens, you might be in the hospital,
you might be unable to manage all of your businesses, affairs,
bank accounts, pay your bills, do all the things that
you do without even thinking about it on a day
to day basis. Perfect point who steps in to take
care of your stuff, your assets, your bank accounts, your
brokerage accounts, your bitcoin, your cryptocurrency. Who has the password

(13:00):
and the keywords to all of these things? Have you
done the planning? And we walk our clients through a
very vigorous and detailed interview to get at the heart
of all of this. And what I call the trust
is is, yes, it's a contract, it's an agreement, but
to me, it's a script. And how do you want
your life to play out if all of these things

(13:24):
that could happen to you, if one of them happens to.

Speaker 4 (13:26):
You, How do you want people to step in, Who
do you want to step in, what authority do you
want them to have, and how do you want them
to treat you and your assets and your other family members.

Speaker 1 (13:40):
It's your script. You get to be the author of
that script and write it in the way that you
want it. So a trust doesn't just take effect to
death like a will. Trust takes effect the day you
sign it, and you're getting at it at one of
the key elements that a lot of people miss, and
that is you can have best trust in the world,

(14:02):
but unless you have it coordinated with all of your
assets and your beneficiary designations. You don't have anything until
you get to the point where you're deceased, and now
you're still in probate, right because those assets have to
get to your trust after your death. Tommy, we're gonna
take a short break. When we come back, we're going
to talk about the trust funding process and why a

(14:24):
trust is important, How it works from the day you
sign it and begin to fund it, what happens on
that day of your document signing. What do you want
to see happen? What do you put in your script
to be the document that takes care of you, your spouse,
and ultimately your children. Because Tom, trusts don't have to

(14:46):
end when you pass. They can, but we're going to
talk about how trusts can be a plan not just
for you, but for your children and your grandchildren. Stay
with us. You're listening to Life Happens Radio every Saturday
morning here on Talk radio w g Y. We'll be
right back after this short break. All right, we are back.

(15:07):
I'm Loup Pirir, your host for this morning of Life
Happens Radio. Are you prepared? I'm on with my associate
Tom Morasco, who works out of our Manhattan office. He
is down and you're from home today, Tom on Long Island. Correct, Yes,
I am all right, and I see that we have
a caller. We have Peter from Sogerty's. We're reaching down

(15:27):
to Sogerty's with w G Y. Good morning, Peter, Welcome
to life Happens.

Speaker 5 (15:31):
Yes, thank you for taking my call. I have a
I have a quick question about about about a trust
that that I know there's a specific type of trust
that you're basically talking about putting your putting the your
your house into that trust, and so you might touch

(15:57):
on that because I know there are many different types
of trust. The next question is, uh, do do you
the the trust I assume is still you know so
so and so sell and So's trust, so it still
basically has your name on it. And uh do you
lose any any of the benefits that you get? For instance,

(16:20):
veterans veterans discounts uh start start start discount the senior
citizens get uh when when you're taking the the the
property out of your your house, out of your name,
do uh do you lose that? And the last question

(16:41):
I have is is how do you actually once you
once you establish the trust, how do you transfer your
property to it a quick claim deed or or or
some other means I can hang up.

Speaker 2 (16:57):
So I like.

Speaker 1 (16:59):
You actually because you've asked a multipart question and these
are great questions, and these are things that you've let
us into a great topic, and that is what are
one of the what's one of the main assets that
most of our clients have, and that's their home and
they want to protect their home. And you you kind
of started off with there are different types of trusts

(17:19):
and different purposes for trusts. We're going to get into
that in real detail on the second half of the show.
Because the one main difference between the revocable living trust,
which is the one a lot of people do, and
a trust that we design that's irrevocable is to protect
that house if you ever need long term care, and

(17:39):
that has become a main planning component for a lot
of people because the cost of care today is over
two hundred thousand dollars a year, so if you have
a five year long term the other paying a million bucks.

Speaker 5 (17:53):
The other purpose of the trust of the sides to
so so it's not taken by medicare. If you go
into a nursing home. The other, as you mentioned, is
to avoid probate.

Speaker 1 (18:07):
Yes, exactly, And you can hit both nails right on
the head. And I'm gonna let tom take this and
we're gonna jump over the revocable trust for now because
we're leaning towards the app what we call the asset
protection trust. So Tommy take it away and talk about
how that trust works, how you get your home or
other real estate in there, because you're the real estate guy.

(18:27):
And then what are the benefits of the trust in
terms of preserving all of the good tax benefits you
have over your residence.

Speaker 2 (18:34):
Absolutely, so these are these are those are very great questions.
By the way, So the Medicaid Asset Protection Trust, as
we refer to it as an irrevocable trust, looks a
little bit different than a revocable trust. So part of
it is that we need to demonstrate to Medicaid that
there has been some type of separation between you and

(18:54):
the assets within the trust. That separation is done by
a number of ways. First, is the trustee or trustees
of the trust cannot be you or a spouse. It
cannot be the Grand Tours. It would have to be
an independent third party. This could be an adult child.
This could be a sibling or other family member, or
a close friend confidant, It could be whomever that you

(19:17):
trust or designate to be in that position. Second main
component of that is that you are restricted from accessing
the principle of the trust. So if you deposited a
certain amount of money in the trust, you will not
be able to simply take that money out at will. However,
there are certain mechanisms that are included in the trust

(19:39):
that that money could be drawn by another named lifetime
beneficiary that could still be used for you through other means,
but without directly giving it to you.

Speaker 1 (19:51):
This gets as you can tell, right. And when we
sit down with clients, one of the things we do
is we draw a picture, because the picture's worth a
thousand words, and we do a diagram of that client's assets,
the people that are going to be their trustees, the
trust terms, things that go in the trust, things that
don't go in the trust, and we'll talk in detail

(20:12):
about that, but Tommy, I want to focus on the
house going in yes, and the rights that Peter's going
to have to that house in this irrevocable trust, and
then the rights he has to modify that trust in
terms of trustees and beneficiaries exactly.

Speaker 2 (20:27):
So the point being is that when people hear the
word irrevocable, they start to think that, oh, no, I've
lost all control. What does that mean for me? So
as it pertains to a house, you will always have
the exclusive right use and occupancy of the home. So
as far as a day to day basis goes, nothing
is going to change for you. And it also preserves

(20:49):
the exemptions. As you were discussing earlier and you were
asking about whether it's star enhanced star veterans, those are
preserved simply by putting the house into the trust. Because
it's a the type of trust that it is, it
would be preserved. However, for you, it's business as usual.
You are still going to be paying your bills as usual,

(21:10):
You're going to be getting your taxes, everything on well
fund basis.

Speaker 5 (21:15):
If the trust owns the property, the trust is a
separate entity like the corporation. So you're you're uh, the
house is not producing income, so the trust needs needs
the someone to loan it money to to to pay
to pay the taxes and the upkeep on the house.

Speaker 2 (21:33):
It's a it's a good thought but because the trust
is what is known as a grand tours trust for
for tax purposes, it's still it's still you as a person,
and it's still your responsibility to pay the bills, and
it doesn't have to go through the trust. You paying
the bills directly.

Speaker 5 (21:51):
Like an escorp.

Speaker 1 (21:52):
Then it's very different than corporation. This type of and s.

Speaker 5 (21:58):
Corp is not is not as upper entity. It's it's
it's the profits and lass and the is on your
personal income tax and as opposed to a scorp, which
is a separate entity.

Speaker 1 (22:12):
And from an income tax perspective, you're spot on. This
trust is you for all income tax purposes. But the
other issue is expenses and paying bills. And right in
the language of the trust, it says that you have
the exclusive use and occupancy and that you don't have
to pay rent or anything like that, but you have
the obligation to maintain the property and to pay the taxes.

(22:33):
That's actually all built right into the trust. And there's
one other tax benefit that I just want to mention,
and Tommy can talk about this, but everybody has a
capital gains tax exclusion if you sell your home, and
it's two hundred and fifty thousand per person. Does the
trust keep that, Tom.

Speaker 2 (22:49):
Yes, it does, which is another huge advantage of the trust.

Speaker 1 (22:53):
So a lot of people say, oh, I just want
to put my kids names on the deed. That's okay,
but now you're changing ownership and now you have different taxpayers,
and now you don't have the same rights, you don't
have the same exemptions. And when you sell that house,
kids are going to pay capital gains tax. So holding
the house in the trust keeps all of the tax
benefits star veterans and capital gains, and it keeps it

(23:17):
in a way that protects the house if you ever
need Medicaid. So we kind of get the best of
both worlds. We get asset protection, but we get all
the tax advantages by having it in this specifically designed trust.
So Peter does that. I hope that answers your question
because we have thirty seconds till the news. Do you

(23:37):
want to stay with us or are we good?

Speaker 5 (23:39):
Well, I'll listen on the radio. Okay, Okay, we hang
up and listen on on on the on the radio.
And of course obviously that this standard standard forms of
the of these trust that that you know have already

(24:00):
been made up you don't have you know, when you're
when you're writing them, you don't have to start from
will nothing.

Speaker 1 (24:05):
We'll cover that as well, But it's not as simple
as you think. We're gonna break for the news and
we'll be right back. Stay with us and we are back.
Welcome back. I'm Lupirori, your host for this morning on
Life Happens Radio Live on the Radio with Tom Morasco
and Peter will get back to his questions in a moment,
but we have Dan from Clifton Park who patiently held

(24:27):
through the news. Dan, good morning, how can we help
you today?

Speaker 6 (24:31):
Hey, good morning guys. So I used to have a question.
My father is aging, and uh just kind of let
me know he wanted to leave me a piece of land.
So I'm kind of caught in this weird situation where
I know he wants to give it to me, but
with the Medicare look back period, you know, I don't

(24:51):
want to leave things that chance. Is there a way
that I could purchase the property now from him at
a discount without it creating a headache for myself, you know?
Moving forward?

Speaker 1 (25:02):
Sure, let me ask a couple of questions just so
we can put this in a frame. Does your father
own any other assets besides this piece of land?

Speaker 6 (25:12):
No?

Speaker 1 (25:13):
Okay, So it's just this land and houses.

Speaker 6 (25:16):
Health currently, I, you know, not bad, but I realistically
do I think he's got five years lest probably not okay.

Speaker 1 (25:27):
So if this is the only asset he has, he
doesn't have any bank accounts or anything like that. Let's
we have to kind of dig into medicaid and the
medicaid rules, which is great because we would do that anyway.
And for Medicaid purposes, they allow you to keep thirty
two thousand dollars in assets. That's the asset limitation. You

(25:48):
can keep other things like an IRA is an exempt asset,
so you can keep an IRA plus thirty two thousand dollars.
If you're living at home and you receive home care,
your home is exempt. Does your dad own his own
home or no?

Speaker 6 (26:02):
No?

Speaker 1 (26:02):
No okay. So all we have is a piece of
land that we want to get out of your dad's name,
and you want to do it in a way that
doesn't impinge upon his right someday to get medicaid. Right, So,
there are two sets of rules that you need to
be familiar with, and one is if Dad ever needs
a nursing home. The transfer of that land will stay

(26:24):
with him for five years before it's clear. There's a
look back period for nursing home care of five years
there is for home health care, which is where most
people want to be. You know, you want to stay
at home and you want to get home healthcare. For
home healthcare today in New York and a lot of
people don't believe this, there is no look back. So

(26:47):
if your dad transferred that land to you today and
he needed Medicaid home care next month, he's eligible. The
trick is, how do you know if you're going to
get through the five years. So there are two rules here,
and one is a tax rule and the other one
is a Medicaid rule. If your dad gives the house
to you and three years from now needs nursing home care,

(27:12):
if you give the house back to him, it erases
the penalty and puts him right back where he started.
So you can unwind this and you can fix it
if you will during that five year time period. If
he needs Medicaid home care, he's fine, he can apply
and he's eligible. But what you want to make sure
is in the deed. If you're going to do just
a deed if he has no other assets, you want

(27:34):
to make sure that you retain for dad a life
estate in the property. And temmy, why do we keep
that life.

Speaker 2 (27:42):
Estate because the life estate will preserve what's known as
a step up in basis upon his passing and reduce
the negative tax implications of whether if it was an
outright gift to you otherwise.

Speaker 1 (27:56):
So we talked about a lot of tax issues in
a trust if some alive and I'm hoping you're not
going to sell this property, right, he's gonna give it
to You're gonna hang on to it.

Speaker 6 (28:06):
Yeah, and it's just land to be clear, no home, okay.

Speaker 1 (28:10):
So if you sell the land, then there are going
to be capital gains tax consequences, whether it's you selling
your dad sells it. There's going to be capital gains
on the sale if it's appreciated, and that the appreciation
means that what did Dad pay for the land versus
what could you sell it for? Right, and the difference
is capital gain and you pay tax on that. But

(28:32):
when you hold it in this type of deed called
a life estate deed, Dad has the right to use
the property and for tax purposes, this is critical because
when Dad passes, your cost basis what would have been
the original purchase price changes to the value of the
property on date of death. So if Dad bought the

(28:53):
land for fifty thousand and now it's worth one hundred.
If he were to just deed the house to you,
your basis is fifth. If you sell it, you've got
a fifty thousand dollars capital gain. If he deeds it
to you with the life estate, when Dad passes, your
new cost basis goes from fifty to one hundred thousand,
and you can sell it and pay no capital game.

(29:14):
So the way to do this, I believe is a
life estate deed. Get the house in your name, reserve
that right for Dad so that you get the tax
benefit upon his passage. If this, if this property happens
to appreciate over his lifetime, you get the benefit of
that stepped up basis. And if he needs a nursing
home in the next five years, you can just dad

(29:34):
it back to him and erase that penalty. Okay, all right,
So those are those are some of the answers. Thanks
for calling, appreciate your call. Thank you that number again.
If you have questions on trusts or property eight hundred
eight two five five nine four nine. That's eight hundred

(29:54):
talk WGY And if you don't like spelling on your
dial pad, like I don't again eight hundred and eight
two five fifty nine forty nine. So, Tom, the trust
that Peter brought up in the first half, the Medicaid
Asset Protection Trust, Yeah, is one of the major trusts
that we do. And very often when clients come in,

(30:16):
they're looking at a couple of different options. And you
said earlier that people do this for tax purposes, for
asset protection purposes. So when we scale trusts up, how
much money do you need in order to have to
do tax planning and have a trust that would help
you by gifting assets out and getting them out of

(30:37):
your estate.

Speaker 2 (30:38):
That's a great question. So in New York State, currently
the tax, the estate tax exemption is in the realm
of seven million dollars. Once we go over that seven
million dollars is when we start to have issues because
not only is there the potential for the estate tax,
but there's something called the cliff in New York. So

(30:59):
once we've exceeded one hundred and five percent of that
is stay tax exemption. Not only do you get taxed
on the excess of what exceeds that seven million, but
you actually get taxed on the entire amount, and that
is that's huge. That's that's a difference of hundreds of
thousands of dollars.

Speaker 1 (31:18):
Now seven hundred thousand dollars swing folks.

Speaker 2 (31:20):
Yeah, if you miss the mark, yeah, and we're talking
about doesn't matter how far over you are. Once you're
over that cliff, you're getting tax on the entirety of
the amount. So tax planning becomes crucial once you've crossed
that threshold. On the federal basis. That is well as
of January currently it's you know, in the thirteen point

(31:44):
nine million mark, but as of January we'll jump to
fifteen million. And again this also is going to depend
on whether or not you're a single individual or you're married,
because there are different rules as to how that exemption
can be used and how we would have to preserve it.
Whether it's New York State or federal, it's done in

(32:04):
different ways. But for New York State, again, once you
cross that seven million threshold, you really need to be
looking at tax planning.

Speaker 1 (32:12):
So we do planning for high net worth families as well,
and if they get up over seven million, then there
are a number of things that we can do to
reduce the size of the estate and eliminate a state tax.
And a lot of those evolve trusts, so there are
tax motivated trusts. When clients get over the fifteen million,
your effective tax rate on everything over that fifteen million

(32:35):
for a single individual is fifty percent. So you want
to make sure you're doing planning at those high net
worth levels because the fifty percent tax is going to
be very devastating to your family when they have to
write that check. But most people that we meet with
are not over seven million. Most people are in the
you know, anywhere between one hundred thousand and a few million.

(33:00):
If they've done well over their lifetime. They have irais,
they may have some life insurance, they have a real estate,
they may have a home, a second home. You put
all that together, and one of the things that we
do in order to know where people fit and what
category their trust should be in and how their trust
should be designed, is time we do a very thorough
fact finder up front. And how important is that to

(33:22):
have that information?

Speaker 2 (33:23):
It is absolutely crucial. It is a essential and we
lou was referring to earlier that when we do our
deep probe, we also like to work with your accountants,
your advisors. We need to get the whole picture, because
in order for us to help you, we need to
know exactly what you have. If you give us just
a few details, well they're doing a disservice to yourself because,

(33:47):
as you can tell just from our short time that
we've been on the air, the different complexities and nuances
that are involved when it comes to all different aspects.
And again this is still all under the umbrella of
the term trust. But as you can see, depending on
where you are, what the assets are, and ultimately what
the goals are is how we need to then craft

(34:08):
and create this document to fit you. Remember, this is
not to go back to what Peter was saying that, oh,
there's a form trust that really you don't have to
do much and and no, that's that, that's that's very
reality accurate.

Speaker 1 (34:22):
There are a thousand form trusts and that's there, and
that's which one right for you?

Speaker 2 (34:25):
Exactly which is the one that's right for you? And
the only way that we can make that determination is
understanding not only what your goals are, but everything that
you have and what we need to work with and
how we need to craft it in the way to
achieve what those goals are.

Speaker 1 (34:40):
All right, we have another caller, Maggie from host Is
on the line. Good morning, Maggie, how are you today?

Speaker 3 (34:46):
Good morning, I'm great. I really enjoy your programs very much.
They're very helpful. And I have a question that I
never even realized this existed until yesterday when I went
to the bank. But what is a health care trust
or health trust that I could have put money in

(35:09):
at the bank.

Speaker 1 (35:10):
Well, I think you're talking about something called a health
savings account. Does that sound familiar?

Speaker 3 (35:16):
Okay, No, I'm really oblivious. I don't know anything about this.

Speaker 1 (35:21):
It could be. So, what's referred to as a health
savings account is money that you set aside to pay
for your own health expenses. And you can do this
on a pre tax basis, so an HSA as it's
called medical savings accounts another number for it, a name
for it. Rather for certain medical expenses like copays, deductibles.

(35:44):
You can put money in a health savings account out
of your paycheck, but you have to have earned income
to do this. It's like a retirement account. For healthcare.
So you can, Oh, you can put money away when
you're working into a health savings account and that money
goes in tax free if you use it for qualified
health care expenses. So if that's what they're talking to

(36:06):
you about, and you're working and you have income, you
could look into setting up a health savings account if
you have healthcare expenses that are not covered by your
health insurance.

Speaker 3 (36:18):
I wish try to know them that way way way
back when when I was I'm retired now and my
healthcare I pay three hundred and fifty three dollars and
change per month to AARP United Healthcare, But I don't
pay any code pays and things like that. So I
guess it's like some people say, that's a lot to

(36:40):
pay for health care, But on the other hand, I
don't pay anything out of pocket, well outside of the
premium care.

Speaker 1 (36:48):
Yeah, when you put that together and you multiply it
by twelve, you know, that's a that's good size number
every year coming out of your income to pay for
health insurance. And right, health insurance is something we talk
talk about a lot. Medicare is the program you're looking at.
Is this an Medicare advantage? Plan that you're in.

Speaker 3 (37:11):
I guess you should call it that. I'm all alone.
I don't have any resources, so to speak, except that
I've been on this plan for many years because of
a mine musband that passed away.

Speaker 1 (37:24):
It could be a Medicare supplement there. It's very a
lot of different operations.

Speaker 3 (37:28):
That I'm retired. I have Medicare and I also have
AARP and n Healthcare as the backup plan. So it's
eighty twenty.

Speaker 1 (37:38):
I guess, all right, So it sounds like a Medicare
Medicare supplement.

Speaker 3 (37:43):
Policy supplement, that's it.

Speaker 1 (37:45):
Yes, So you have Medicare supplement, you have primary Medicare,
and those cover doctors, hospitals, So sounds like you've got
those expenses pretty well covered. The expenses that we were
talking about earlier go beyond doctors and hospitals. If you
have primary coverage for those, you're okay. But when you

(38:08):
go to the long term care side of things, if
it isn't acute care, if it isn't a medical doctor,
if it isn't a hospital, and you just need help,
you need care, that's long term care. Your policy doesn't
cover those things. Medicare doesn't cover those things. Then we
flip to the other M of the M and MS,

(38:28):
which is Medicaid. And to get Medicaid you can only have,
as we were talking about earlier, a certain amount of assets.
But I think the account that you're looking at, Maggie
is a health savings account, and that might be what
the bank is talking to you about, an HSA. But
if you have full coverage through your United health Care plan,

(38:51):
then that's probably not something that you would need, and
if you're not working, that's not something you could put
your earned income into.

Speaker 3 (39:00):
So exactly.

Speaker 1 (39:01):
Yeah, so medicaid when you're living.

Speaker 3 (39:04):
On Social Security?

Speaker 1 (39:06):
Great understood. Yeah, yep, all right, any is that answer
your question, Maggie for this morning.

Speaker 3 (39:13):
Very helpful. Thank you so much, and I'll continue to
listen to you on Saturday mornings and during the week.
And that glass all of you for what you do
to help us.

Speaker 1 (39:22):
Thank you very much. We appreciate your call and your comment.
And right now, I think that's a good time time
to take our last break. Great, and we're going to
take a short break. We will be right back. You're
listening to Life Happens Radio here on Talk Radio WG.
Why stay with us. We're back right after this, all right,
welcome back. We probably have time for one or two

(39:43):
more calls if you want to give us a buzz
eight hundred talk WG. Why that's eight hundred eight two
five fifty nine forty nine. And I want to give
a little heads up to a program we have coming up.
It's called Medicaid Monday, the topic we were just talking about,
and Medicaid is a very complicated program. You may have
heard that in the One Big Beautiful Bill Act, the

(40:04):
federal government has proposed to cut about one trillion dollars
out of Medicaid. And I've been talking to my friends
in the New York State government and the lobbyists and
all the people that I talked to on a daily basis,
and the budget next year for Medicaid is going to
be tight. The New York State budget is going to
be tight. We are in a blue state, so we're

(40:24):
facing some difficult days ahead. And when we look at medicaid,
Medicaid is the lifeline for a lot of families and
a lot of people. And if you don't have a
proper plan, it's going to take your assets and it's
going to make you spend them on this healthcare that
you always thought, like Maggie did, She's got an insurance policy.

(40:44):
Why doesn't that policy cover all of her health care needs? Well,
it stops when healthcare becomes long term care, and Medicaid
is the program that pays for long term care. And
that's where we have the thirty two thousand dollars cap.
Most people tom to be taken care of at home,
and on Monday, not this Monday, which would normally be

(41:04):
our day, but it's Indigenous People's Day or Columbus Day,
depending upon. I don't know where we are for that,
but it's a holiday, and so we're not gonna do
it this Monday. We're gonna do it next Monday, October twentieth,
from noon to twelve thirty and it's Frank Heming, myself
and Nina Crissanda, who is a care coordinator, a health
professional healthcare advocate who works with people and our clients

(41:29):
included to help them through the home healthcare process. It's
hard to find care, coordinate the care, get Medicaid to
pay for it. Frank myself, Nina, we're going to explore
all of that in a crisp thirty minutes. So from
twelve to twelve thirty on October twentieth, you can sign
up for Medicaid Monday by going to our website which

(41:51):
is Pierro Law dot com. Go to the events tab
and you'll see Medicaid Monday. There again, p I e
r R Law dot com. Sign up for Medicaid Monday.
We typically have on these programs every other Monday or
every other month. We have about two to three hundred
people that join us in their professionals and consumers and

(42:12):
a whole group, and we try to get real information
out there because folks, I can tell you from Tom
and you can comment on this when people come in
and tell us what they've heard about Medicaid and about trusts.
There is so much misinformation.

Speaker 2 (42:28):
Out there beyond Yeah, absolutely.

Speaker 1 (42:32):
And Medicaid is a program that you can make work
for you. And today we're talking about trusts and how
trusts work to protect assets. So the Medicaid Asset Protection Trust,
the Revocable Living Trust. For many clients, this is the choice.
So when we sit down, we look at your assets,
we look at what you have, we look at how
you want to structure those assets. And the home we

(42:52):
talked about earlier in the show, Getting the home into
the trust, and whether it's a revocable trust or a
Medicaid Asset protection trust, we're going to make sure that
those assets get in their real estate deeds in time.
You do a lot of real estate in your practice
in New York City. It's co ops. Can we get
them into the trust? But the trust worked really well
for real.

Speaker 2 (43:11):
Estate, Yes, they really do. And also there's a wealth
of information on our website. Two of previous Medicaid mondays
as well, which, as you know, thirty minutes can't do
justice to all of the different applicable rules. But there
is a wealth of information online that you can produce
through as well as as well as tuning in on.

Speaker 1 (43:31):
Our website, we have a whole series of these, been
doing these for several years, so there's a whole library
that you can tap into of that information. We have
Wayne from Assets on the line. Good morning Wayne, Good
morning Lo.

Speaker 7 (43:45):
Can you hear me?

Speaker 1 (43:45):
I can hear you? Just fine? Yeah, do you have
a question for us this morning?

Speaker 7 (43:49):
Yeah, we're customers or yours, Lou, And we were just
wondering with this all this AI stuff that's coming down
and regulations being changed and laws being changed, possibly how
do we how do we get informed of changes in
the law.

Speaker 1 (44:05):
Well, that's a great question. I'm going to flip that
right to Tom.

Speaker 2 (44:08):
So we have an our firm, we really stand behind
our client relationships and we offer a client maintenance program
that we call our Professional Advisor's Lifetime Management System where
we on an annual basis stay in touch with you. You
have time allotted to contact us with any of your questions,

(44:29):
and most importantly is at the end of the year,
we conduct a thorough review. We do an annual review.
We go over all of your specific documents, your current circumstances,
any changes in the law that might have come up
that could impact your your plan, and then we see
if whether or not any revisions or updates need to
be made.

Speaker 1 (44:49):
So it's it's a client care program we call it YEAH,
which involves an annual meeting, so we sit down with
you once a year. We have technology that we use
that's called Inherlink, which is a site, a fully secured
website where your documents, your data, all of your information
lives and we go through everything. We go through every trust,

(45:12):
every document, power attorney, healthcare proxy, all the things you've done,
the assets that you have the real estate, iras, retirement accounts,
other types of assets. We look at all those things,
and then as the law changes, because we are expecting
new things in mediciate new issues. One of the things
that I keep talking about is that for home healthcare

(45:33):
today there is no waiting period, there's no look back.
But New York State has told us that they're going
to impose a thirty month or two and a half
year look back at some point in time, So you
need to know that, you need to know when that
would set in. But that annual program gives you a meeting,
all of the information organized and when you think about it,

(45:54):
and one of the main things that people say to
us is, well, how do my kids know where to
look if something happens to me? How do they even
know where all my information is and all my assets are,
my documents? This is all of these things in one
place in the inheriting site, and all we need to
do is give them the password, which happens at the

(46:15):
appropriate time, and they can go in and they have
everything at their fingertips. And I was the child for
my parents that my sister and I went into the house,
so we started looking for things, where's the power of attorney.
Do they have a will? Do they have a trust?
Where are their assets? Where are their bank accounts? And
we're rummaging through drawers and file cabinets and trying to

(46:35):
find paperwork, and it's daunting and it's frustrating. This program
gives children the ability to just step in and do
things at the appropriate time with full information and all
the documents that they will need. We also tom build
into that consulting time during the course of the year.
So if you have questions Wayne during the course of

(46:57):
the year, you don't get a bill, you can call
us up, you can e mail us. We will answer
your questions throughout the year up to two hours of
attorney time. We bundle all this and it's called our
Palms program. You can actually see a sample site on
our website purolaw dot com. And if you don't want
that program, because there there is an annual fee and

(47:18):
here in the Capital region for the annual consultation, the
two hours of attorney time and the technology, I'll give
that annual fee out on the radio. It's nine hundred
and fifty dollars. If you don't want to do the
annual program, then you have to stay tuned into life happens,
you have to come to our seminars and webinars. Stay

(47:38):
active on our website because we post information, we blog
when there are changes in the law. We can't reach
out to every client individually, but on our website we
put up all of this information for you to find.
So if you want to be more hands on, the
PALMS program is great. If you don't, then just keep
tuned into the website to look at the next block,

(48:00):
the next webinar, and get educated as you go as
to the changes that are occurring.

Speaker 7 (48:07):
Okay, well you set up a nice your avocable trust
for us.

Speaker 1 (48:12):
That's perfect.

Speaker 7 (48:13):
Well yeah, yep, all right, Well thank you for thank
you for taking my call.

Speaker 1 (48:19):
Oh you're welcome. Thanks for Colin Wayne, and thanks for
being a client. We appreciate it. So Tommy, we hope
this is a distinguisher for for a lot of people. Absolutely,
And when people say, oh, we can just you know,
go to legal zoom dot com and do our own trust.
We can watch Susie Ormond on public television and for
six payments of twenty nine to ninety nine, we can

(48:41):
get a living trust package on a CD ROM. You know,
that's all well and good, right, But what you're not
getting is professional advice.

Speaker 2 (48:49):
Yeah, you're not getting the service you're you're you're looking
at just an item at that point. But does it
work for you? Right, as we were saying before, there
are so many forms.

Speaker 1 (48:58):
Does it work for you?

Speaker 2 (48:58):
Did it take into consider it all of the different
things that we've mentioned. As it pertains to goals assets,
it's not a one size fits all.

Speaker 1 (49:09):
So when we look at trust, this is the other piece,
and we started with this having a trust document, your script.
You need a good script, you need it well thought out,
you need the right people in the right places. But
then you need to tie your assets together. We don't
have time to go through each one of these because
we're running down on time. But bank accounts, brokerage accounts, stocks, bonds, investments,

(49:32):
real estate, insurance policies, tangible property, your stuff, you're John
Deere tractor, your diamond rings, all of those things go
into the trust. If you have limited liability companies, corporations,
they all go into the trust and get retitled. The
one major asset, Tom, and we have one minute to
count it down. The one major asset that does not

(49:52):
go in is your IRA and retirement account for that,
we tie it back together with beneficiary designations. All right,
so we are out in about forty seconds. Tommy, thanks
for joining me today on the radio and taking some
time out of your Saturday morning.

Speaker 2 (50:08):
No. I appreciate joining and thank you for having me
as always.

Speaker 1 (50:10):
Thanks everyone for listening, and we really thank our loyal
Life Happens listeners like Maggie who listen every Saturday morning
at nine am right here on Life Happens Radio. And
don't forget Medicaid. Monday on the twentieth, it is on
Medicaid home Care, how to navigate the process, how to
get care in your own home. We hope you can
join us for that, and remember our website because it

(50:33):
is a valuable tool where there is a lot of information,
a lot of webinars, seminars, things that have been recorded.
That's all for you. Stay with us and be back
next week on Life Happens. Thanks