Episode Transcript
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Speaker 1 (00:00):
Live in studio and I am here live with my
partner Frank Hemming. Good morning, Frank Heillo, and we're very
happy to welcome all of our listeners to the last
show of twenty twenty four. Hard to believe it is
the year, a very interesting, tumultuous, nerve racking year. And
(00:21):
we last week had Hugh Johnson on talking about the
state of the economy and what he's predicting. And if
if you missed that show, it's a good one to
go to our podcast, if you go to where can
they find us? Rank on our website of course hero
law dot com, and then we should have what a
Life Happens link there, So I'm gonna I'm actually gonna
(00:41):
pull it up like that. He's gonna do that as
I'm talking, because we are on Spotify, So you can
find us on Spotify, Life Happens Radio, the WGY website,
we'll link to the Life Happens Radio show. But Hugh
Johnson gave us a very good insight into issues like immigration,
in inflation, the Fed, what the Fed may be doing
(01:03):
for the next year. Two rate cuts he predicted, which
kind of shook the market when they got a little
bit soft on the rate cuts and the market did rebound.
But how does all of that policy and the economy
play together internationally? How are things going to shake out
with the new administration. We have global dynamics that are
(01:25):
just very fragile right now in Ukraine, Middle East, China, Taiwan,
so many things that could impact us. And what we're
going to do today is take a look not at
those big macro economic factors that we really can't control.
But Frank, what we're going to look at today are
(01:46):
things that our listeners can control. Sure, And twenty twenty
five is you know, the year to get it done.
Speaker 2 (01:56):
I like it.
Speaker 1 (01:58):
And we're going to talk about things that you can
do in your own life. And we'll go off the
beaten path a little bit because we talk about wills
and trusts and powers of attorney, healthcare proxies, planning for
long term care, tax planning, minimizing your taxes, maximizing your wealth.
That's all part of what we do at Puer, O'Connor
and Strauss. We are in a state planning firm. We
(02:20):
do a lot of elder law, special needs business planning.
We do litigation, guardianship and trust in the state's litigation.
But today what we're going to try to do, Frank,
is to lay out for folks what they can do
right now to get ready for this next year, for
twenty twenty five, and dare I say it, I'm not
buzz Lightyear and beyond I love it. So we're going
(02:43):
to go beyond into what does the rest of your
life look like?
Speaker 2 (02:49):
Those are big concepts.
Speaker 3 (02:51):
Yeah, and probably not everybody's favorite topic to talk about
or think about.
Speaker 2 (02:56):
And just before I forget, so I did pull up
the website.
Speaker 3 (02:58):
So if you go to our website, Piero Law, if
you go over on the side, there's a little three
barred piece where you can hit our menu. So if
you go to our menu, then there is a radio tab.
So if you just hit the radio tab, that brings
you to our web page dedicated to Life Happens Radio,
and then on there you can either get redirected to
Spotify where you can get your episodes on the Spotify platform,
(03:21):
or there are links to each episode so you can
actually download the episode like right off the web page
as well if you don't want to go through Spotify.
So if you want to go miss and listen to
past episodes, that's how you do it.
Speaker 1 (03:32):
This is our thirteenth year doing life Happens, and we
have some excellent shows. We've had some excellent guests, and
we certainly have an excellent engineer and Zach who's back
and will be with us hopefully for twenty twenty five.
He brings us the music that brings us our show
in and out, which is great. And for all of
you thinking about the next year, thinking about the years
(03:53):
after that, and Frank, you and I are, let's just say,
in different stages of life.
Speaker 2 (04:00):
I think that's fair. That's fair. Yeah.
Speaker 1 (04:02):
And you just celebrated the holidays with your family. I did,
and your lovely daughter.
Speaker 3 (04:08):
My four and a half year old daughter and our
fourteen week old puppy. So it's a little crazy at
my house theas Yes. And so how old are you now, Frank,
I will be thirty eight tomorrow, okay, and you are
the youngest partner?
Speaker 2 (04:23):
Yes, bye, by a bit.
Speaker 3 (04:26):
There's about ten years I think between me and Aaron,
and Aaron's to he's not here to.
Speaker 2 (04:30):
Tell me not to say that, So there's about ten
years I think between me.
Speaker 1 (04:32):
And him, and then you go another eighteen years to
get to me. And then you go another twenty two
years to get to Peter Strauss. We're representing several generations here, folks.
And I celebrated the holidays, and we have a tradition
(04:53):
and I talked about it last week, the Seven Fishes
Christmas Eve dinner.
Speaker 2 (04:57):
We didn't do it on Christmas Eve.
Speaker 1 (04:59):
We did it on Saturday before Christmas Eve, which gave
everybody kind of a little bit more time to breathe
and relax and it wasn't as rushed and hurried, and
we had a marvelous time. And we celebrated it with
my aunt aunt Nettie. God bless you, Aunt Nettie. Shout
out to you. Hope you're listening down there in Columbia County.
And Aunt Nettie is one hundred and two. Great for her,
(05:21):
and she gave a toast and her toast was I
want to make it to one hundred and third Christmas
to celebrate.
Speaker 2 (05:28):
That was her toast. That's great.
Speaker 1 (05:29):
So I'm hoping all of you have the goals that
my Aunt Nettie has set, and that is just to
keep doing what she's doing and living life at one
hundred and two.
Speaker 2 (05:40):
That's an incredible, incredible story. Incredible lady.
Speaker 1 (05:43):
And you had some dealings with my family, frank when
in a variety of legal matters I have.
Speaker 3 (05:48):
Yeah, And it's been interesting kind of just to see
how like my career has progressed, and obviously like how
things have just changed in general, like we've talked about
on the show. We've I did some things for your uncle,
I've done things for you for your in laws. Now
we've got your aunt.
Speaker 1 (06:03):
So yeah, and you know, Aunt Nettie has availed herself
of the medicaid program because she she ran out of
money and she.
Speaker 2 (06:11):
Had a house.
Speaker 3 (06:12):
Yeah, I mean, I mean, not to be fair, I'm
not sure how many people are financially planning to get
through one hundred and two years right right, Like, I
don't think I'm going to make it to one hundred
and two. I mean, I'm going to try, but I
don't know how likely that is.
Speaker 2 (06:24):
So when we.
Speaker 1 (06:25):
Say to twenty twenty five and beyond, she she's been
doing this for one hundred and two years. We did
a trust for her probably twenty years.
Speaker 3 (06:36):
Ago, yeah, before my time, and we put her house
in the trust. Yeah is why why not?
Speaker 1 (06:42):
And you know now she is not living at home.
She is living elsewhere, and the house was sitting vacant,
and you know it was time to sell the house,
which happened a few weeks ago, and the house sold
and the money went into the trust. And because she's
on medicaid, Frank, does that knock her off Medicaid?
Speaker 3 (07:04):
Not as long as it was in irrevocable medicaid trust,
which obviously in this instance, I know that it was.
Speaker 2 (07:09):
But as long as it's.
Speaker 3 (07:09):
A correctly drafted trust to do that purpose, no, that
would not impact her eligibility or benef It's going forward.
Speaker 1 (07:15):
And I tell that story to kind of lead into
this topic because when we're looking at planning for next year,
the year after ten years, twenty years, thirty years, forty
years down the line, you know I would be living
if I live to Aunton Nettie's age another thirty eight years,
thirty six years. Yeah, which is kind of crazy to
even think about. Yeah, I hope I do.
Speaker 3 (07:36):
Still doing document executions and I hope life happens right
one and two. But yeah, I don't think so. But
it's this is reality, folks. I'm at a different stage.
I'm at a point in my life at sixty six
years old where I have to start thinking in terms of, Okay,
what if I do need long term care, what if
I need help day to day?
Speaker 2 (07:55):
What if my resources run out?
Speaker 1 (07:57):
What if I haven't planned properly and invested properly with
the wonderful investment advisors here on WGY Steve Bouchet, Dave Kopick.
And how about if I'm not ready to absorb all
of those costs. The Medicaid Asset Protection Trust is something
that we're going to start with. Usually I leave that
(08:18):
to the end and we run out of time. So
I put it on the top of the agenda this time,
and I'm gonna let you, Frank, just talk about how
this trust works. And I've been practicing law, folks, I'm
coming up. I was admitted to the bar in nineteen
eighty four January of nineteen eighty four, so this is
my fortieth anniversary of practicing law, and I've been doing
(08:42):
trust work and wills and powers of attorney and healthcare proxies.
Probably the most tried and true document and plan that
we've had in our practice, and not just our practice,
but practices across the country, is the Medicaid Asset Protection Trust.
Just explain a little bit about how this works and
(09:02):
why getting into it maybe at sixty six or seventy
or even fifty six is something that people really need
to think about.
Speaker 3 (09:11):
Yeah, sure, no problem. So, generally speaking, with this type
of trust, we do not allow the grandeurs or the
makers of the trust to actually be the trustees.
Speaker 2 (09:20):
Right.
Speaker 3 (09:20):
When you have a trust, you have different players. You
have your grandeur or your maker of the trust. You
have your trustee or trustees of the trust that you
manages the assets held within the trust. And then you
have your beneficiaries, whether that's during the lifetime of the
maker or following the death of the maker of the trust.
So in this instance, we typically do not allow the
grandeur or the maker of the trust to be the trustees.
(09:41):
And in Antnettie's case, it's me, let's say so. In
her case, she didn't have she doesn't have children, me
and my cousin.
Speaker 2 (09:48):
Let's say so.
Speaker 3 (09:49):
In many respects, you know, in the vast majority of
cases this would be the children being the trustees. Doesn't
have to be, right. We have people sometimes that have
children that are too young for that responsibility. Sometimes they're
just they're not savvy with money or they're not as
trustworthy with money, or they're just not ready yet. So
you can pick anybody that you want. You can even
have more than one if you want so. So using
(10:11):
aunt and Nettie an example, right, Lou at you and
your cousin. And then if you have multiple trustees, we
lay out who how they can act, whether they can
act jointly meeting they have to agree and they both
have to take care of everything together, or whether they
can act separately meeting only one signature is needed. But
then they have to have a very communicative relationship. They
have to be open and honest and forthtelling. But in
(10:31):
a lot of respects with most families, if we have
multiple kids, we appoint the kids as the trustees. They
act separately, everybody's involved, nobody feels left out, and ultimately
it gets kind of that train rolling towards asset protection
after five years for a nursing home.
Speaker 1 (10:45):
So at Christmas Eve, you know, in my family in
this particular situation, she didn't have children of her own,
but her brother Carmine had two children, her brother Joe
had two children, and her brother Lou had two children,
and that was my dad. So there were six cousins
(11:08):
and we all kind of wrapped ourselves around Aunt Nettie,
and when her husband passed away, we kind of became
her guides and caretakers to some extent, but she was
very independent at that point in time. But we have
two nurses in the family, which kind of helps makes
it a good thing from a medical perspective. We have
a lawyer in the family, so the legal documentation was good.
(11:31):
And my cousin Carmine Cappy we call him. He has
done so much great work for my aunt, just making
sure all of her finances are in shape and all
the things that he's done to keep her going. And
the family does support her. So at the Christmas Eve,
all six family members were represented. One of my cousins
has passed away. Two of them actually have passed away,
(11:55):
and so my cousin Victor passed away at a younger age,
so his wife was substituted in in his place, and
we did that early on. And then my other cousin
passed away and her two sons were there. So we're
all there at Christmas Eve celebrating Aunt Nettie, and it's
the trust was kind of a savior for her and
(12:19):
and the rest of us because we didn't have to
worry about spending down and putting out you know, fifteen
sixteen thousand dollars a month on the cost of her care.
Speaker 2 (12:30):
The house was protected and preserved.
Speaker 3 (12:32):
Plus I mean on top of it, just think of
the emotional toll of having to sell the house, right
that your aunt and uncle lived in for I'm sure
a very long time that they built. Oh okay, yeah,
so even so even better so they built it themselves, right,
and then seeing the proceeds come in, and then having
to give any of that to a to a nursing
home or or you know, to pay for care when
(12:53):
you don't necessarily have to do that. Yeah, right, that
that's hard. That sometimes that that itself is is hard,
you know, and that takes the other pieces out of
that equation.
Speaker 1 (13:02):
Yeah, there's a typical Italian family. They all built homes together.
So my father and his brother had adjoining backyards, and
my aunt was one house up, so the three of
them had houses all together built. And I remember when
her house was built because ours was in a little
bit before and it was a little bit later, and
it's just something where the family occupied and my sister
(13:25):
is back in my parents' house, and my nephew is
back in his grandfather's house. Okay, And so my aunt
Netty's house is the one that just got sold because
she didn't have children. Sure, And the trust, the Medicaid
Asset Protection Trust, is flexible enough that you can have
money get distributed and used back for the grand tour.
(13:46):
You can break the trust. Just talk about some of
the flexibility when we come back after this short break,
because when people walk into our office, they've heard, Oh,
I have to go to my children for money. Oh,
I can't have it anything in my own name. Oh,
this trust is irrevocable. I can never get anything out
of it. All false. Stay with us and we'll tell
(14:09):
you why. Go back right after this short break. You're
listening the Life Happens Radio every Saturday morning right here
on Talk Radio WGY. I'm Lupiro, your host for this
Morning in Studio Live with Frank Hemming. We're going to
open up the phone lines. If you have a question, comment,
if you'd like to have anything explained about anything that
we do, or just say hi and happy New Year.
(14:29):
You can give us a call at Talk WGY eight
hundred TALKWGY. That's eight hundred eight two five five nine
four nine Again eight hundred eight two five fifty nine
forty nine. We would love to hear from you. We're
talking about Medicaid and Medicaid Asset Protection TRUSTS. Medicaid is
a program that's very much in the crosshairs of the
(14:52):
government because of the cost of the Medicaid program, and
as we know, it's the program that has become the
not just the pay of last resort for healthcare, but
the only payer for many types of services that people need,
especially as we age or suffer disabilities. And we have
a series that runs every second Monday of the month.
(15:14):
We call it Medicaid Monday, and the next one is
going to be January thirteenth. It's a very tight thirty
minute session. We just did our last one for the
year a couple of weeks ago. You can find that
again where.
Speaker 3 (15:27):
Frankpurolaw dot com and just search for Medicaid Monday and
I'll see if I will grab the website again and
see if I can direct you a little bit better
than that.
Speaker 1 (15:35):
But on January thirteenth, join me and Frank when we
really dig into the Medicaid program. New numbers, new laws,
new rules, new regulations, a lot of changes happening in
medicaid because guess what, people need services and the only
program that pays for them is Medicaid. The only way
you get to medicaid, folks, is to not have countable assets.
(15:59):
And frank, how do clients not have countable assets.
Speaker 3 (16:03):
Either, Well, that assumes they had them in the first place, right,
Some people just don't have them. But if you have them, right,
then you need to do something with them. You can
give them away. And we have clients sometimes that come
in and say, well, I gave everything to my kids
X number of years ago, or I put their name
on the deed, or you know whatever, and that works
plenty well and in some case, you know, in many circumstances,
(16:24):
like people think that that's kind of the best way
to do things until they get hopefully educated about different options.
Speaker 1 (16:30):
Well, there are tax consequences to that from a capital
gains tax perspective carry over basis the house, you lose
your exemption from capital gains tax, not gift tax. We're
not talking about gift tax, but income tax and capital
gains tax consequences when money is gifted out right to
the kids, not to mention the kids might do the
wrong things with the money, right or unintentionally. They might
(16:51):
die before you.
Speaker 3 (16:52):
Right, And we've had all those things happen. So while
gifting it away is one option, it's it's much better,
much safer to do trust planning. That goes hand in
hand with the Medicaid trust that we've been talking about
for the first segment of the show.
Speaker 1 (17:04):
And so the Medicaid Asset Protection Trust is just that
it protects your home, It protects your money, your stocks, bonds,
the mutual funds, all the things, annuities, non qualified annuities.
But let's talk and I kind of tease this out
at the end of the first segment. If you're not
your own trustee and the principle has to be locked
(17:26):
up inside the trust, how does that work for people,
especially if they're not knocking on the door of the
nursing home they want to live a while independently. Yeah,
how do people get comfortable with the concept of this
Medicaid Asset protection trust?
Speaker 3 (17:41):
Well, for one, I think a big misnomer here is
that everything you own has to go in it in
the first place. We frequently get clients that come in
and they've heard things, or they've done some research on
their own, or maybe they've even seen other attorneys, and
they have this big misconception that like, once you have
this trust, that every single thing that you own goes
(18:01):
in it the second.
Speaker 2 (18:02):
That you do the trust.
Speaker 3 (18:04):
Then, at least here in New York, again, we're pretty
fortunate that, you know, the state exempts certain assets right
off the top, and one of the biggest ones that
we exempt where virtually nowhere else does, very few other
places do, are retirement accounts. So if you have an
IRA A four oh one K, A four h three
B A four fifty seven, you know if it's attacked
the third retirement account that is an exempt asset here
(18:27):
in New York for medicaid purposes, so you don't have
to put it in a trust to protect it.
Speaker 2 (18:31):
It's already protected.
Speaker 3 (18:32):
And honestly, if you put it in a trust, you'd
have to liquidate the account, then put all the stuff in,
pay a lot of income tax, and start five years
rolling on it. So logically speaking, it doesn't even make
sense to do it, even though, especially when you don't
even have.
Speaker 1 (18:46):
To and let me borrow from an old commercial that
is huge. Most people come in with a couple of
assets that are meaningful. You know, we don't have pensions anymore.
Unless you were teacher where you worked for the government,
you don't really have a pension. Now you have some
kind of qualified retirement plan and maybe you have a
(19:08):
four to oh one K and maybe your employer did
a match as we do.
Speaker 2 (19:12):
But you're on the hook.
Speaker 1 (19:13):
You got to put money away for your own retirement
and hopefully you've done it successfully and you've put enough
of money away in your four oh one K and
your IRA, and that's something we'll talk a little bit
more about in the second half of the show. But
once you get money into that IRA, if you need
medical assistance and you need Medicaid, that IRA could be
(19:35):
a million dollars, could be two million dollars.
Speaker 2 (19:37):
That IRA is exempt.
Speaker 3 (19:38):
Yeah, it doesn't count. So the the asset limit is
thirty one and seventy five dollars.
Speaker 2 (19:44):
Probably going to go up a little bit for the
new year.
Speaker 3 (19:47):
Did I just checked that the new numbers are not
have not been released by the state as of five
minutes ago when I looked, So that's probably going to
change just a little bit.
Speaker 1 (19:56):
That's why you have to join us on January thirteenth
at twelve noon to get the new numbers for dead Monday.
Speaker 2 (20:00):
Hopefully we have them by then.
Speaker 1 (20:01):
And it's a thirty minute webinar and you're gonna get
all the new information, all the things, all the changes
in Medicaid. Sign up right now at our website again
puro law dot com events. Sign up for Medicaid Monday
and you can join us. It's a thirty minute live webinar.
Frank myself can unroll all the new rules for Medicaid
this January thirteenth, twenty twenty five. Get ready, join us
(20:24):
for the thirty minute webinar. And that's the Medicaid program, Frank,
that is so vital to our clients.
Speaker 3 (20:31):
It's for many people, it's the only way that they
can can get the care that they need and not
lose everything. Right, is they actually qualify for Medicaid. But
to do that, as we've been talking about, yet to
be financially eligible. So going back to your question, lou So,
when people come in right and they're scared to the
strust because of how it sounds and how restrictive it seems.
First big thing is if you if you have a
(20:52):
big retirement account, which many people either have them or
they're building towards that they don't even go in there.
So I think people just hearing that alone makes them
feel a lot better about the situation because it's like, well,
what if we told you you have your big bucket
in your IRA that will always be there, always in
your name. You will have always full access to it, right,
that doesn't change, and you can.
Speaker 1 (21:12):
Touch that money and use it for yourself any time
you want.
Speaker 3 (21:16):
Because it's not tied to the trust in any way.
So that that's a big one. The second piece is like,
one of the other big assets that people come in
with typically that they want to protect is their house,
right the family home. Now, it could be it could
be a very valuable home. It could be just valuable
to you. It doesn't doesn't really matter, right, if it's
an asset that you have that you want to protect,
(21:38):
it makes I think it's worthwhile to consider doing a trust.
So with a house, it's it's actually again very non intrusive.
We change the deed, we put the we'd move the
residence from your name or you and your spouse into
the name of the trust. We don't just give it
to the children. We put the children's name on the
deed as trustees for your trust, but it's not the
same as just putting it in their name. And then
(21:58):
once your house is in the trust, your trustees, who
are people of your choosing right, can can still sell
it for you. You can still live in it, that
you still can maintain it. You still remain responsible for maintenance,
upkeep taxes, you keep your star exemption. So at the
end of the day, if you just want to stay
in your house, live in your house, age in your house,
(22:19):
whether it's in a trust or not, you're allowed to
do that, just like you did, or just like you
were always able to before you did the trust in
the first place.
Speaker 1 (22:25):
Now a lot of people with the home come in
and say, well, I want to put my kid's name
on the deep. Yeah, and you know that's noble and
valiant and good thinking. However, there's a better way, and
some people do something called a life estate deed where
they do put the children's name on it and they
reserve a life estate, but the trust actually gives added
(22:47):
layers of protection. Just talk a little bit about the
advantages of the trust versus a life estate deed.
Speaker 3 (22:53):
So the biggest thing with life. Estates that come to
mind are one, if the house gets sold and you're alive, right,
you get some money back from your life estate interest.
That could cause issues if you're on Medicaid.
Speaker 2 (23:05):
Yeah.
Speaker 3 (23:05):
Other thing is like if you give your kids, if
you give your kids what's called the remainder interest, what
if your kids die before you, then now your house
is part of their estate plan. And that's assuming that
they had one. And we kind of mentioned it before.
We've had issues where children predecease parents and then now
their house goes to unintended people.
Speaker 1 (23:23):
Not to mention, you know, my aunt built her house
which was in the trust, and it has appreciated send Hudson,
New York, and it's a hot market, so it is
appreciated considerably inside the trust. And if it was in
the nieces and nephews' names, we'd be paying a boatload
of capital gains tax. But the trust qualifies for the
grand tours two hundred and fifty thousand dollars exclusion from capital.
Speaker 2 (23:47):
Gains, which is huge. Yeah, big help.
Speaker 1 (23:50):
And we're going to take a short break for the news.
When we come back, we're going to finish up our
conversation about the Medicaid Asset Protection Trust. We're going to
talk about reval locable trusts and how they work and
why they work, and great alternative if you're not ready
for the Medicaid trust, and then all the other things
that you should be thinking about to put into your
plan for twenty twenty five and beyond. We'll be right
(24:12):
back Bureau your host for this Morning in Studio live
with my partner Frank Hemming. And Frank does a lot
of the Medicaid work that our firm does. Works with
our clients and families, helping them to find the ability
to bring care into the home, the ability to pay
for that care, the ability to if you need a
(24:35):
nursing home, pay for the nursing home without spending every
penny that you have. All things that we do, and
as I mentioned, we have a webinar coming up on
June January thirteenth, or rather the second Monday of January,
the second Monday of twenty twenty five, on the changes
in Medicaid for twenty twenty five, thirty minutes twelve to
(24:56):
twelve thirty on the thirteenth of January.
Speaker 2 (24:58):
Join us.
Speaker 1 (24:58):
You can sign up on our website puro Law dot
com also want to give a little heads up because
we have another seminar. We do in person, we do
web based education, we do the radio show. We try
to educate our clients as to what the options are,
and that's what today's show is all about as well.
But we are going to do our quarterly Trust Administration Workshop.
(25:20):
So if you want to look under the hood and
see how it trust works, why it works, what the
mechanics are, how that engine operates, come join us for
the Trust Administration Workshop. If you have a trust already, great,
come in and we will talk about how the taxes
get paid, how accountings get done, what a trustees responsibilities
(25:40):
and obligations are, what the rights of a beneficiary are.
Tuesday February eleventh from noon to one thirty, and this
is going to be at the Trust Code Bank Center.
Trustco is our gracious sponsor for these events. It's at
six Metro Park Road, Albany, Trust Co Bank Center on
Tuesday February eleventh, from twelve to one thirty. Lunch will
(26:02):
be served and we hope that you can join us
if you want more information on the Trust Administration Workshop again,
or any of the live or web based educational events
that our firm runs puro law dot com. Go to
events for things that are already in the can as
they say, go to resources. And we hope that you
utilize that website because we try to put information up
(26:24):
there that is current relevant and that helps our clients
make informed decisions. And that's why we're here on Life
Happens Radio to help you make informed decisions for your family.
I had my three children at home for the holidays
and they're still there, and that's a wonderful thing. It's
a blessing. And you know, we have three beautiful children
(26:48):
with a spouse, a fiancee, and a girlfriend, so all.
Speaker 2 (26:52):
Very very close.
Speaker 1 (26:53):
And our family has become very close, the couples and
my wife and I and it's great tradition and holiday
time for all of us. And we have three grand puppies.
Speaker 2 (27:06):
So okay, I forget them, three dogs that inhabit the
house during the holiday season.
Speaker 1 (27:12):
But we're waiting for the next shipment, which which will
not be dogs. We hope, we hope there are some
grandkids on the way sooner or later. And that's life, folks.
You know, when once you get through it, life happens.
It's happening every day, Frank, your family is growing.
Speaker 2 (27:28):
Yeah.
Speaker 3 (27:28):
When I when I started with the firm, I was
I was with my now wife. We were together, but
we weren't engaged yet. We were just boyfriend and girlfriend.
And I've gone through my time at the firm through engagement, married, child,
and now puppy.
Speaker 2 (27:40):
So yeah, full circle. Yeah.
Speaker 1 (27:44):
So in terms of questions, we can take them eight
hundred eight two five, five nine four nine. That's eight
hundred talk WGY. I know you're out there. Folks, pick
up the phone, give us a call. Don't be afraid
ask that question. There are no bad question, as they say,
so we'd love to hear from you. We spent the
first half of the show talking about healthcare, long term care,
(28:08):
how to pay for that care, and the benefits of
a Medicaid asset protection trust. And every time we do
this and in my mind, I'm a visual so I
have a picture in my mind of a float chart.
Speaker 2 (28:22):
I've not surprised you said that and how many times
you've done them.
Speaker 1 (28:26):
It's an AHA moment for clients when we take their stuff,
all of their assets, their I ray's, four oh one k's,
their cash accounts, bank accounts, checking savings, their income from
social security retirement pensions, and the assets that they want
to protect in the trust, including their home and a
(28:47):
whole host of other things stocks, bonds, mutual funds, and
non qualified annuities, life insurance that has cash value. The
trust holds and protects all of those things in a
wrapper that is very flexible. And I just want to
finish the thought frank on those few things that we
put into the trust. Yeah, that allow people to control
(29:07):
it much more than they think they could when they
walked in the door.
Speaker 2 (29:10):
Sure.
Speaker 3 (29:11):
So another kind of advantage that we tell people is,
you know, at the end of the day, your trustees
are the ones managing everything for you. You can pick
your trustees and then you can fire your trustees and
change them something happens. So so, Lou, you always like
to use your kids as the example for you. So
if you put in your three kids that everyone's getting along,
everyone's on board, everyone's doing what they should, then there's
(29:34):
no issue. Then you have three capable people to help
if something happens. If one of them, two of them,
or all three of them start making decisions that you
and your wife don't like, don't approve of, right, or
they are they don't do something that you want them
to do. You can change your trustee at any time,
as long as you've got your your wits about you,
as long as you're competent, you can change your trustee.
(29:54):
So in a lot of regards, even though you're not
in control, you're still in a lot of control because
you're in control of the people who are in control,
and if they don't do what you want, you can
remove them. The other I think biggest misnomer and misconception
here is that once there's funds, whether it's cash, whether
it's brokerage accounts, whether it's you know, other stocks or
(30:17):
other things, that once there's assets within the trust, that
those assets cannot be accessed any longer. And that again
isn't true. So typically, again how we normally draft this
is we name beneficiaries during the lifetime of the grand tours.
Typically this would be the children, it could include grandchildren
as well. So it luwell used you. So if we
drafted you a trust, if you put your kids in
(30:38):
charge of it, and we said that during your lifetime,
your kids and your descendants are your beneficiaries during lifetime,
then if we need money out of the trust, your
kids can distribute money from the trust to themselves. Now
they're holding your money, and then they can use it
for you however you want them to. So that you
want to take a trip, you want them to buy
you a car, you know, you want to do some
(30:59):
other things, maybe pay off a debt. They can grab
that money, take it out of the trust, circle it
around and use it how you want them to. And again,
if they don't, you can remove them as trustee or
One of the other biggest powers that the maker of
the trust has in this instance is you can also
change your beneficiaries at any time. So if your kids
really go off the rails and don't do what you want,
(31:20):
you can not only remove them as trustee, but then
you can remove them as beneficiary as well and say, well,
now not only are you're not in charge any longer,
but now you don't get anything at the end either.
Speaker 1 (31:30):
So folks here, oh, it's an irrevocable trust and I'm
not in charge anymore. Well, yes, it's an irrevocable trust.
By definition, No, you're not in charge. Your children are
in charge. But if anything happens and your children are
not performing or behaving in a manner that you deem appropriate.
Speaker 2 (31:50):
You can remove them, and you can change trustees.
Speaker 1 (31:54):
And if you don't think that's powerful enough, then not
only would you change them out as trustees, but you'd
also change them out as beneficiaries. And if your children
have four kids and they're each getting a twenty five
percent share, and all of a sudden, three of them
are getting a third, a third, a third, the one
who just got zero is not going to be a
happy camper.
Speaker 2 (32:14):
Nope.
Speaker 1 (32:15):
And so that is leverage. That's an ability that you
have to make sure that the trust is being administered
the way that you want it to be, and you
can change beneficiaries at any time. And Frank, there is
a provision. My favorite statute in the whole wide world
is the State's Powers and Trusts Law, Section seven Dash
one point nine. And that may not mean anything to
(32:36):
you yet, But Frank, how does that help.
Speaker 3 (32:39):
It allows the either, Well, in this instance, it's it's
meaningful because it actually allows a trust to be revoked,
even if it says that it can't be as long
as you have the consent of your beneficiaries.
Speaker 1 (32:52):
And oh, by the way, you have this trust. It
says it's irrevocable, which qualifies it for Medicaid. So it's
a protective trust. But you have a statute in New
York that says, oh, it's irrevocable, but if I get
the beneficiaries to consent, it's actually revocable.
Speaker 2 (33:10):
And oh, I.
Speaker 1 (33:11):
Can name the beneficiaries so I can find cooperative people.
And if you have a recalcitrant child who is getting
whispered in the ear by maybe their spouse, that's.
Speaker 2 (33:25):
Our twenty five percent. We want that. We want to
get that twenty five percent.
Speaker 1 (33:28):
Don't revoke the trust, don't consent, then guess what, you
have three other kids that will consent, and now they
each get a third or third or third. So that's
the beauty of the Medicaid trust. When we do our
diagram and people see their own family, their own assets,
their own income on a diagram that explains it it,
(33:49):
there is an aha moment where that comfort level comes in.
And we're going to go right to the next generation, Frank,
because once you create this trust, and we're going to
talk about revolvocable trusts next because that's another very powerful tool. Sure,
but when that trust is over, is it really over?
(34:09):
And how do we get protections for that next generation
because folks, I don't know about you, but I worry
about my kids their future, their financial future. Is Social
Security going to be around for them? Is medicare going
to be around for them? Have we talked about this
with Hugh Johnson last week? We have a thirty six
trillion dollar debt and a debt service of one point
(34:30):
two trillion dollars a year that the government's paying an
interest on the debt one point two trillion dollars a year.
And that's going nowhere, folks. But up so what do
our kids have? They have a whole lot of things
that are going to hit them like a ton of bricks.
But if we can build a plan for our children
and our grandchildren that we were lucky we lived in
(34:52):
a great generation. Boomers were able to accumulate wealth. They're
going to inherit thirty trillion dollars over the next twenty
years in a transfer of wealth. How do we protect
that money for the next generation.
Speaker 3 (35:06):
So we frequently counsel clients on not only planning for yourselves,
but then what do you want to do once you're gone?
And how do you want to do it? And I
would say, this is probably right up there with the
people's on people's minds of what they want to accomplish.
Does not only protect themselves and get their plan taking
care of for themselves, but you know, protect the next generation,
(35:28):
like you're talking about Nolu. So what a lot of
people now are doing is they're building in subsequent trusts
or contingent trusts that say, upon the death of the
grand tours, well, now your beneficiaries each get a trust,
so again we'll use you. So when you pass, you
could write into your trust if everything's going to go
one third, one third, one third to your kids, that
each child will get their one third interest. And now
(35:50):
instead of just getting it outright themselves where it's on
the table for bad things like a divorce, like medicaid,
like bankruptcy, things like that, if we actually build it
into a trust, now it's protected from all the bad
things that could happen to your kids. So it protects
against divorce, from medicaid qualification if they need it, bankruptcy
(36:10):
if they get sued, you know, any of the bad
things that can happen. And we can actually build it
in of and design who the trustees for each of
those trusts are going to be so in your case
because you have children you like and trust so far anyway,
typically you could leave your kids in charge of their
one third interest, so your daughter can manage hers, your
two sons can manage theirs, and then it works just fine.
(36:32):
They can access it however they want, they can use
it for however they want. But now it's earmarked off
to the side that if anything happens to them, their
personal things may be at risk that those creditors and predators,
but at least their inheritance that they got from you isn't.
Speaker 1 (36:48):
And you may not have thought about this for your
daughter yet, but as she gets older and she starts.
Speaker 2 (36:53):
To date, now I have a trust for her in
my will. There you go.
Speaker 1 (36:57):
So as you think about Okay, you know the divorce
rate is fifty two percent. I have three children. What
are the odds that someday one of them gets divorced?
And we've done a lot of prenuptial agreements for clients,
which are wonderful. But you can avoid the prenup for
inherited assets by holding them in this trust for your children.
(37:19):
They cannot be touched by creditors predators. As you said,
including divorcing spouses, and those can be some of the
most hostile creditors that your children will ever have. Those lawyers,
on the other side, are going to try to target
every asset that you've left to that child, and you
don't want that to be pulled in and you don't
want it to be.
Speaker 2 (37:37):
Subject to creditors.
Speaker 1 (37:38):
There's a flip side to this coin, because if your
children are wildly successful and they grow their own estate
into a point where it's taxable and they have to
pay a state tax. We don't talk a lot about
state taxes because the federal exemption is now fourteen million
dollars for twenty twenty five. So if you're under fourteen
(37:58):
million dollars into only twenty five, you don't pay federal
estate or gift tax. In New York it's about seven
million dollars. So for those people that are fortunate enough
to have estates that grow into those high brackets, and
you know, if your child invested early in Nvidia and
has piled up wealth or bitcoin, I have a lot
(38:20):
of bitcoin multimillionaires that bought bitcoin several years ago at
very low prices, and now they're worth a lot of money.
The estate tax rate on those people living in New
York is about fifty percent. Once you get over those limits,
what you leave to your child in this trust is
exempt from a state tax as well, So you can
keep the wealth out of the hands of creditors, predators,
(38:42):
and the government because the assets that you leave to
your family through the trust are exempt from a state tax.
Wonderful tool. The beneficiary controlled trust is what we call it,
and we talk to our clients who have kids about
this every time we talk about a trust, and we
talked about the Medicid Protection trust. But this also works
if you're doing just a revocable trust. So distinguish that,
(39:05):
Frank a little bit from the Medicaid trust.
Speaker 3 (39:07):
So a revocable trust, biggest or one of the biggest
differences is who your trustee is. So typically with a
revocable trust, it's the maker, it's the grand tour. So, Lou,
if you are doing this type of trust, you could
be this trustee and I did right, you have to say,
and I think if you've been pretty open about that.
So if you have a trust, it's revocable, you're in
charge of it, so you do what you want. You
want to change something you can. You want to put
(39:28):
stuff in, you can. You want to take stuff out,
you can. You want to amend it, you can, you
want to revoke it, you can. At the end of
the day, it's you being you. The biggest thing with
this type of trust is its purpose is not to
protect assets long term against the nursing home and to
qualify someone for medicaid, because since you have so much freedom,
access and control, all the assets held within this type
(39:50):
of trust are accountable for medicaid purposes. So we have
clients that sometimes aren't ready for the medicaid trust. Sometimes
they're too young for it. Sometimes they have enough wealth
or not worried about it. Sometimes they have insurance that
they don't want, or sometimes they have they don't have
any children or anybody they really want to provide for,
and they don't really care if they use their money
for long term care. So there's many reasons that this
type of trust may be appropriate. It just it's the
(40:13):
way that you know. It's mechanics are different because you're
not giving up that perceived control. You're keeping all of that.
It's just the endgame is a little different because you're
not looking to lock things up and protect against the
nursing home.
Speaker 1 (40:23):
So for me, let me tell you why I think
this is valuable. I have a business, I have other assets.
I have a fairly complicated a state. I would say
relative to some people, not relative to other people. You know,
I have clients that are far more wealthy and complex
than anything I would ever consider. And this isn't just
for wealthy people. Just you got to get that out
(40:45):
of your mind. This is for anybody that has any assets,
Because if I become incapacitated, if I can't manage things,
if I have a stroke, or I have an accident,
or develop Alzheimer's, which is genetically in my family, then
I want to have the ability to say, okay, I
have a trust that when I'm no longer.
Speaker 2 (41:03):
Trustee, I know who is.
Speaker 1 (41:05):
I've appointed them and I've told them how I want
my trust to be managed, how to manage each asset,
how to take care of other beneficiaries, how to make
sure that everybody in the family gets the fair share
and the right people are in the right roles. That's
to me, one of the biggest values. And when I die,
the last thing I want is my family running this
(41:25):
through court, through a probate court, and the trust avoids probate.
So all of these assets are managed for me while
I'm capable by me, and then for me while I'm alive,
and then for my beneficiaries, and then those wonderful beneficiary
control trusts roll right out of the revocable trust.
Speaker 2 (41:43):
Sounds pretty good. Sounds good? Yeah, all right, Good.
Speaker 1 (41:45):
Time to take a break, because that's a high note.
When we come back. This isn't just for the elderly.
This isn't just for the wealthy. There are things you
need to have in your estate plan going forward for
twenty twenty five. When we come back, we're going to
talk about the escent elements of an estate plan. You're
listening to Life Happens Radio. We'll be back right after this.
(42:06):
I'm Lupiro, your host for this morning. We are on
Life Happens Radio and Talk Radio WGY. I am live
in studio with Frank Hemming soon to be the pumped
up Frank Hemming. Because I'm reading the blast for today's show.
Frank Yes says that your New Year's resolution is to
start lifting weights.
Speaker 2 (42:23):
Is that true? It is?
Speaker 3 (42:24):
It's a little it's a little misleading, just because I
actually already kind of did, but I can give the
thirty seconds spiel on why that is, so let's do it.
Speaker 2 (42:32):
So we have.
Speaker 3 (42:33):
A consultant that we've been working with at the firm Ye,
a wonderful guy named Steve Riley. And one of the
things that we've been talking about in our sit down
because we have classes with him every two weeks, and
one of the things that he's talked about is is
getting stronger as you get older. That he has a
physician that's prominent in his life and he's done a
lot of research about how people age and how people
(42:55):
age better. And one of the biggest things that he
has found out is as you age, you lose muscle
mass and that leads to falls that it leads to
health issues and things. So you want to actually get
stronger as you get older. And I've been a pretty
regular exercise person for the last several years. I really
took that to heart of when my daughter was on
(43:15):
her way that I wanted to.
Speaker 2 (43:16):
Make sure that I was healthy.
Speaker 3 (43:17):
That way I could, you know, play with her and
do all the things I wanted to do as a dad.
But I haven't really been a weightlifter or anything. So
I have a new app on my phone that I've
been using before sickness pretty regularly, and I'm just trying
to get in now. I don't want to say better shape,
because I hope I'm in okay shape already, but I
want to get physically stronger so that way, as I age,
(43:38):
I hopefully age a little better.
Speaker 1 (43:39):
One of the things, folks, that you can pledge to
do and make your resolution and hopefully stick to it.
There are a lot of apps now in a lot
of ways. I have the Peloton app and I use
that for certain things. I go to Planet Fitness ten
bucks a month. You can't beat it. There you go,
and you know, I get my workout in there. But
I've been a gym rat since I was in high school.
(44:00):
I played football, played sports, and then played college football.
And when you're in college in football off season, you're
in the weight room, yep all the time. And we
had a weight room in my fraternity house with a
full squat rack, a full bench press, and you know
the bench I got bench up to my three hundred
pounds when I was in college, and I have stretch
marks to show it. I can't lift anything near that today,
(44:20):
but without that, you do deteriorate. I mean you start
to just break down. Yeah, go back to my aunt.
My aunt worked eight hours a day in a store
making sausage, meatballs, serving the public all of the great
foods that she served at Piro's Italian Imports down in Hudson,
New York. And when she got home at five o'clock,
she walked you to three miles a day, Yeah, which
(44:41):
is great, vigorous walk, not just loafing around, you know,
pumping the arms and walking to to three miles a day.
So when she was ninety five, she was still pumping away.
You know, she's one hundred and two now, so she
slowed down a bit, but she got to one hundred
and two for a reason.
Speaker 2 (44:55):
Yeah, take care of yourself.
Speaker 3 (44:57):
Let's say, you know, when we have people come in
and they're in there nineties or mid nineties, later nineties,
or even somebody like your end who's past one hundred,
you know, they're they're not typically overweight people. They're not
you know, seemingly unhealthy people. You know, so there is
some there is a lot of credence to you know,
stay healthy, do your things, stay active, whether that's mentally,
physically or both.
Speaker 1 (45:17):
So get off your couch, get to the gym, get
to the track.
Speaker 2 (45:24):
Get out there. I played. Uh, I was lucky.
Speaker 1 (45:27):
I got woken up this morning by my son, who
plays pickleball, and he's a very good pickleball player and
he plays in a very stellar group of pickleball players
and they were missing someone. So he woke me up
and said, hey, Dad, can you fill in? So I
got to play pickleball with my son this morning, which
was fabulous. Yeah, and you know, got a nice workout
in before the show. And this afternoon, I'm going to
go out and play paddle tennis, which is an outdoor
(45:48):
game with a bunch of friends.
Speaker 2 (45:50):
So I played last night. I'm gonna play again today.
But you have to stay active.
Speaker 1 (45:53):
You got to keep yourself in the game, and you
have to be active to stay in the game.
Speaker 3 (45:58):
And the other thing is just and I think just
go without saying. Anybody who who works a job, you know,
like we have a stressful job, right. I work very
hard at my job, just like everybody else.
Speaker 2 (46:06):
At the firm.
Speaker 3 (46:07):
I exercised too to kind of get my mind off
things and kind of help manage stress. And that's a
big help, you know, I feel better if I run
three miles at the end of the day, I feel
a lot better about things.
Speaker 2 (46:17):
So and a lot of people run. I have never
been a runner. It's not something I don't enjoy it,
but I do it.
Speaker 1 (46:23):
I had to run for, you know, training for football,
and I just hated the distance running. I'd run sprints,
you know, I'll do forty yard sprints, ten yard spris,
hundred yard sprints, But just to go out and run
three four miles, Yeah, to me, that's just not fun.
Speaker 2 (46:36):
Yeah.
Speaker 3 (46:36):
Like I said, I've kind of I've learned to like
it more than I used to. But I ran track
in high school, but I was I was always a sprinner.
I was never a distance runner. Now now I can
do four or five miles and I feel pretty good afterwards. Yeah,
that's kind of crazy that I've got to that point.
Speaker 2 (46:48):
That's fantastic. Yeah, but just fantastic. I get off the couch.
Speaker 1 (46:51):
All right, So let's talk about the documents that everyone
should have. We got about four minutes left, all right,
so we're gonna cover them real quick. Power, attorney, healthcare,
proxy and disposition, a remains appointment. You should all have
a will. Everybody should have a will. But trusts are better.
We talked about the Medicaid trust, the revocable trust. A
will goes along with that. But let's talk about the
(47:12):
power of attorney. Frank, real quick, essential document when you
need it.
Speaker 3 (47:16):
Oh my god, yeah, it's it's arguably the most important
to do my side of the practice right, because the
power of attorney is the document that says who if
you've appointed to make financial decisions, especially for when you can't.
I don't want to say only for when you can't,
because it works while you're healthy in a lot of respects.
But it ensures that if something happens and you can't
make your financial decisions, there's someone of your choosing or
(47:37):
a group of people that then can make your financial
decisions for you. And in our case, says we do
so much Medicaid work, we want to make sure that
not only do you have a power of attorney, but
allows for gifting, for trust formation, for trust funding. That
way we can do whatever we want with moving of assets,
creating trusts, getting eligible for long term care, getting eligible
for Medicaid if you ever need it.
Speaker 1 (47:57):
And a lot of people ask do I need a
lawyer to do a power of attorney and when you
see the documents that come through our office and people
come into us when they're in extremists, I'm in the hospital,
Mom's or mom is. Mom's in the hospital, she has
to go to the nursing home. We had her real
estate lawyer or her friend who's a lawyer, or her
(48:19):
friend who had a power of attorney that they just
copied over and put, you know, different names on it.
Speaker 2 (48:24):
That's a disaster.
Speaker 3 (48:25):
Frank It very rarely goes well. If you go to
a non state planning attorney that you know, typically there's
there's parts that are missing, there are provisions that are
and then there sometimes not everything is even done or
executed correctly. And they did do a big power of
attorney change in twenty twenty one, so sometimes like we're
still seeing outdated forms. There's a whole mess of issues.
(48:47):
So obviously we hope that you come to us, but
even if you don't, go see somebody who at least
does this as an everyday part.
Speaker 2 (48:53):
Of their practice.
Speaker 1 (48:54):
And everybody should have a power of attorney. We start
when kids go away to college. We have them signed
power attorney for their parents to be to do things
financially for them while they're away, yeah, usually to their benefit,
of course. And the healthcare proxy is next about a
minute to go.
Speaker 3 (49:07):
So it's a document just of says who makes your
health care decisions if you cannot make them for yourself.
Can only be one at a time. Here in New York,
typically this would be spouse and kids in an order,
but again it's anyone that you want. Just again, make
sure that you have one.
Speaker 1 (49:19):
And at the end, it's the disposition of remains.
Speaker 3 (49:22):
Which we do a lot of other firms don't probably
do it or don't do it as often as we do.
It's just a document that you execute during your lifetime
that says who takes care of your burial, your funeral,
your final arrangements when you pass. Because your healthcare proxy
and your power of attornity, as great as they are,
they die with you, so they can't be used to
then make those after death decisions because they no longer work.
Speaker 2 (49:44):
So what's right for you?
Speaker 1 (49:46):
What's the right plan for twenty twenty five?
Speaker 2 (49:49):
Come see us.
Speaker 1 (49:49):
We'll sit down with you, no cost, no obligation for
our life happens listeners, We would love to sit down
and talk to you about your situation, your family, your property,
your assets, your income, and develop a plan with you
for you to take into that future. Frank Hemming, thanks
for joining me in studio today. Thank you very much,
and thank you all for listening for twenty twenty four
(50:10):
and we hope you stay with us for the next year.
And happy new year everyone, enjoy the new year. We
hope twenty twenty five is better than before.
Live in studio and I am here live with my
partner Frank Hemming. Good morning, Frank Heillo, and we're very
happy to welcome all of our listeners to the last
show of twenty twenty four. Hard to believe it is
the year, a very interesting, tumultuous, nerve racking year. And
(00:21):
we last week had Hugh Johnson on talking about the
state of the economy and what he's predicting. And if
if you missed that show, it's a good one to
go to our podcast, if you go to where can
they find us? Rank on our website of course hero
law dot com, and then we should have what a
Life Happens link there, So I'm gonna I'm actually gonna
(00:41):
pull it up like that. He's gonna do that as
I'm talking, because we are on Spotify, So you can
find us on Spotify, Life Happens Radio, the WGY website,
we'll link to the Life Happens Radio show. But Hugh
Johnson gave us a very good insight into issues like immigration,
in inflation, the Fed, what the Fed may be doing
(01:03):
for the next year. Two rate cuts he predicted, which
kind of shook the market when they got a little
bit soft on the rate cuts and the market did rebound.
But how does all of that policy and the economy
play together internationally? How are things going to shake out
with the new administration. We have global dynamics that are
(01:25):
just very fragile right now in Ukraine, Middle East, China, Taiwan,
so many things that could impact us. And what we're
going to do today is take a look not at
those big macro economic factors that we really can't control.
But Frank, what we're going to look at today are
(01:46):
things that our listeners can control. Sure, And twenty twenty
five is you know, the year to get it done.
Speaker 2 (01:56):
I like it.
Speaker 1 (01:58):
And we're going to talk about things that you can
do in your own life. And we'll go off the
beaten path a little bit because we talk about wills
and trusts and powers of attorney, healthcare proxies, planning for
long term care, tax planning, minimizing your taxes, maximizing your wealth.
That's all part of what we do at Puer, O'Connor
and Strauss. We are in a state planning firm. We
(02:20):
do a lot of elder law, special needs business planning.
We do litigation, guardianship and trust in the state's litigation.
But today what we're going to try to do, Frank,
is to lay out for folks what they can do
right now to get ready for this next year, for
twenty twenty five, and dare I say it, I'm not
buzz Lightyear and beyond I love it. So we're going
(02:43):
to go beyond into what does the rest of your
life look like?
Speaker 2 (02:49):
Those are big concepts.
Speaker 3 (02:51):
Yeah, and probably not everybody's favorite topic to talk about
or think about.
Speaker 2 (02:56):
And just before I forget, so I did pull up
the website.
Speaker 3 (02:58):
So if you go to our website, Piero Law, if
you go over on the side, there's a little three
barred piece where you can hit our menu. So if
you go to our menu, then there is a radio tab.
So if you just hit the radio tab, that brings
you to our web page dedicated to Life Happens Radio,
and then on there you can either get redirected to
Spotify where you can get your episodes on the Spotify platform,
(03:21):
or there are links to each episode so you can
actually download the episode like right off the web page
as well if you don't want to go through Spotify.
So if you want to go miss and listen to
past episodes, that's how you do it.
Speaker 1 (03:32):
This is our thirteenth year doing life Happens, and we
have some excellent shows. We've had some excellent guests, and
we certainly have an excellent engineer and Zach who's back
and will be with us hopefully for twenty twenty five.
He brings us the music that brings us our show
in and out, which is great. And for all of
you thinking about the next year, thinking about the years
(03:53):
after that, and Frank, you and I are, let's just say,
in different stages of life.
Speaker 2 (04:00):
I think that's fair. That's fair. Yeah.
Speaker 1 (04:02):
And you just celebrated the holidays with your family. I did,
and your lovely daughter.
Speaker 3 (04:08):
My four and a half year old daughter and our
fourteen week old puppy. So it's a little crazy at
my house theas Yes. And so how old are you now, Frank,
I will be thirty eight tomorrow, okay, and you are
the youngest partner?
Speaker 2 (04:23):
Yes, bye, by a bit.
Speaker 3 (04:26):
There's about ten years I think between me and Aaron,
and Aaron's to he's not here to.
Speaker 2 (04:30):
Tell me not to say that, So there's about ten
years I think between me.
Speaker 1 (04:32):
And him, and then you go another eighteen years to
get to me. And then you go another twenty two
years to get to Peter Strauss. We're representing several generations here, folks.
And I celebrated the holidays, and we have a tradition
(04:53):
and I talked about it last week, the Seven Fishes
Christmas Eve dinner.
Speaker 2 (04:57):
We didn't do it on Christmas Eve.
Speaker 1 (04:59):
We did it on Saturday before Christmas Eve, which gave
everybody kind of a little bit more time to breathe
and relax and it wasn't as rushed and hurried, and
we had a marvelous time. And we celebrated it with
my aunt aunt Nettie. God bless you, Aunt Nettie. Shout
out to you. Hope you're listening down there in Columbia County.
And Aunt Nettie is one hundred and two. Great for her,
(05:21):
and she gave a toast and her toast was I
want to make it to one hundred and third Christmas
to celebrate.
Speaker 2 (05:28):
That was her toast. That's great.
Speaker 1 (05:29):
So I'm hoping all of you have the goals that
my Aunt Nettie has set, and that is just to
keep doing what she's doing and living life at one
hundred and two.
Speaker 2 (05:40):
That's an incredible, incredible story. Incredible lady.
Speaker 1 (05:43):
And you had some dealings with my family, frank when
in a variety of legal matters I have.
Speaker 3 (05:48):
Yeah, And it's been interesting kind of just to see
how like my career has progressed, and obviously like how
things have just changed in general, like we've talked about
on the show. We've I did some things for your uncle,
I've done things for you for your in laws. Now
we've got your aunt.
Speaker 1 (06:03):
So yeah, and you know, Aunt Nettie has availed herself
of the medicaid program because she she ran out of
money and she.
Speaker 2 (06:11):
Had a house.
Speaker 3 (06:12):
Yeah, I mean, I mean, not to be fair, I'm
not sure how many people are financially planning to get
through one hundred and two years right right, Like, I
don't think I'm going to make it to one hundred
and two. I mean, I'm going to try, but I
don't know how likely that is.
Speaker 2 (06:24):
So when we.
Speaker 1 (06:25):
Say to twenty twenty five and beyond, she she's been
doing this for one hundred and two years. We did
a trust for her probably twenty years.
Speaker 3 (06:36):
Ago, yeah, before my time, and we put her house
in the trust. Yeah is why why not?
Speaker 1 (06:42):
And you know now she is not living at home.
She is living elsewhere, and the house was sitting vacant,
and you know it was time to sell the house,
which happened a few weeks ago, and the house sold
and the money went into the trust. And because she's
on medicaid, Frank, does that knock her off Medicaid?
Speaker 3 (07:04):
Not as long as it was in irrevocable medicaid trust,
which obviously in this instance, I know that it was.
Speaker 2 (07:09):
But as long as it's.
Speaker 3 (07:09):
A correctly drafted trust to do that purpose, no, that
would not impact her eligibility or benef It's going forward.
Speaker 1 (07:15):
And I tell that story to kind of lead into
this topic because when we're looking at planning for next year,
the year after ten years, twenty years, thirty years, forty
years down the line, you know I would be living
if I live to Aunton Nettie's age another thirty eight years,
thirty six years. Yeah, which is kind of crazy to
even think about. Yeah, I hope I do.
Speaker 3 (07:36):
Still doing document executions and I hope life happens right
one and two. But yeah, I don't think so. But
it's this is reality, folks. I'm at a different stage.
I'm at a point in my life at sixty six
years old where I have to start thinking in terms of, Okay,
what if I do need long term care, what if
I need help day to day?
Speaker 2 (07:55):
What if my resources run out?
Speaker 1 (07:57):
What if I haven't planned properly and invested properly with
the wonderful investment advisors here on WGY Steve Bouchet, Dave Kopick.
And how about if I'm not ready to absorb all
of those costs. The Medicaid Asset Protection Trust is something
that we're going to start with. Usually I leave that
(08:18):
to the end and we run out of time. So
I put it on the top of the agenda this time,
and I'm gonna let you, Frank, just talk about how
this trust works. And I've been practicing law, folks, I'm
coming up. I was admitted to the bar in nineteen
eighty four January of nineteen eighty four, so this is
my fortieth anniversary of practicing law, and I've been doing
(08:42):
trust work and wills and powers of attorney and healthcare proxies.
Probably the most tried and true document and plan that
we've had in our practice, and not just our practice,
but practices across the country, is the Medicaid Asset Protection Trust.
Just explain a little bit about how this works and
(09:02):
why getting into it maybe at sixty six or seventy
or even fifty six is something that people really need
to think about.
Speaker 3 (09:11):
Yeah, sure, no problem. So, generally speaking, with this type
of trust, we do not allow the grandeurs or the
makers of the trust to actually be the trustees.
Speaker 2 (09:20):
Right.
Speaker 3 (09:20):
When you have a trust, you have different players. You
have your grandeur or your maker of the trust. You
have your trustee or trustees of the trust that you
manages the assets held within the trust. And then you
have your beneficiaries, whether that's during the lifetime of the
maker or following the death of the maker of the trust.
So in this instance, we typically do not allow the
grandeur or the maker of the trust to be the trustees.
(09:41):
And in Antnettie's case, it's me, let's say so. In
her case, she didn't have she doesn't have children, me
and my cousin.
Speaker 2 (09:48):
Let's say so.
Speaker 3 (09:49):
In many respects, you know, in the vast majority of
cases this would be the children being the trustees. Doesn't
have to be, right. We have people sometimes that have
children that are too young for that responsibility. Sometimes they're
just they're not savvy with money or they're not as
trustworthy with money, or they're just not ready yet. So
you can pick anybody that you want. You can even
have more than one if you want so. So using
(10:11):
aunt and Nettie an example, right, Lou at you and
your cousin. And then if you have multiple trustees, we
lay out who how they can act, whether they can
act jointly meeting they have to agree and they both
have to take care of everything together, or whether they
can act separately meeting only one signature is needed. But
then they have to have a very communicative relationship. They
have to be open and honest and forthtelling. But in
(10:31):
a lot of respects with most families, if we have
multiple kids, we appoint the kids as the trustees. They
act separately, everybody's involved, nobody feels left out, and ultimately
it gets kind of that train rolling towards asset protection
after five years for a nursing home.
Speaker 1 (10:45):
So at Christmas Eve, you know, in my family in
this particular situation, she didn't have children of her own,
but her brother Carmine had two children, her brother Joe
had two children, and her brother Lou had two children,
and that was my dad. So there were six cousins
(11:08):
and we all kind of wrapped ourselves around Aunt Nettie,
and when her husband passed away, we kind of became
her guides and caretakers to some extent, but she was
very independent at that point in time. But we have
two nurses in the family, which kind of helps makes
it a good thing from a medical perspective. We have
a lawyer in the family, so the legal documentation was good.
(11:31):
And my cousin Carmine Cappy we call him. He has
done so much great work for my aunt, just making
sure all of her finances are in shape and all
the things that he's done to keep her going. And
the family does support her. So at the Christmas Eve,
all six family members were represented. One of my cousins
has passed away. Two of them actually have passed away,
(11:55):
and so my cousin Victor passed away at a younger age,
so his wife was substituted in in his place, and
we did that early on. And then my other cousin
passed away and her two sons were there. So we're
all there at Christmas Eve celebrating Aunt Nettie, and it's
the trust was kind of a savior for her and
(12:19):
and the rest of us because we didn't have to
worry about spending down and putting out you know, fifteen
sixteen thousand dollars a month on the cost of her care.
Speaker 2 (12:30):
The house was protected and preserved.
Speaker 3 (12:32):
Plus I mean on top of it, just think of
the emotional toll of having to sell the house, right
that your aunt and uncle lived in for I'm sure
a very long time that they built. Oh okay, yeah,
so even so even better so they built it themselves, right,
and then seeing the proceeds come in, and then having
to give any of that to a to a nursing
home or or you know, to pay for care when
(12:53):
you don't necessarily have to do that. Yeah, right, that
that's hard. That sometimes that that itself is is hard,
you know, and that takes the other pieces out of
that equation.
Speaker 1 (13:02):
Yeah, there's a typical Italian family. They all built homes together.
So my father and his brother had adjoining backyards, and
my aunt was one house up, so the three of
them had houses all together built. And I remember when
her house was built because ours was in a little
bit before and it was a little bit later, and
it's just something where the family occupied and my sister
(13:25):
is back in my parents' house, and my nephew is
back in his grandfather's house. Okay, And so my aunt
Netty's house is the one that just got sold because
she didn't have children. Sure, And the trust, the Medicaid
Asset Protection Trust, is flexible enough that you can have
money get distributed and used back for the grand tour.
(13:46):
You can break the trust. Just talk about some of
the flexibility when we come back after this short break,
because when people walk into our office, they've heard, Oh,
I have to go to my children for money. Oh,
I can't have it anything in my own name. Oh,
this trust is irrevocable. I can never get anything out
of it. All false. Stay with us and we'll tell
(14:09):
you why. Go back right after this short break. You're
listening the Life Happens Radio every Saturday morning right here
on Talk Radio WGY. I'm Lupiro, your host for this
Morning in Studio Live with Frank Hemming. We're going to
open up the phone lines. If you have a question, comment,
if you'd like to have anything explained about anything that
we do, or just say hi and happy New Year.
(14:29):
You can give us a call at Talk WGY eight
hundred TALKWGY. That's eight hundred eight two five five nine
four nine Again eight hundred eight two five fifty nine
forty nine. We would love to hear from you. We're
talking about Medicaid and Medicaid Asset Protection TRUSTS. Medicaid is
a program that's very much in the crosshairs of the
(14:52):
government because of the cost of the Medicaid program, and
as we know, it's the program that has become the
not just the pay of last resort for healthcare, but
the only payer for many types of services that people need,
especially as we age or suffer disabilities. And we have
a series that runs every second Monday of the month.
(15:14):
We call it Medicaid Monday, and the next one is
going to be January thirteenth. It's a very tight thirty
minute session. We just did our last one for the
year a couple of weeks ago. You can find that
again where.
Speaker 3 (15:27):
Frankpurolaw dot com and just search for Medicaid Monday and
I'll see if I will grab the website again and
see if I can direct you a little bit better
than that.
Speaker 1 (15:35):
But on January thirteenth, join me and Frank when we
really dig into the Medicaid program. New numbers, new laws,
new rules, new regulations, a lot of changes happening in
medicaid because guess what, people need services and the only
program that pays for them is Medicaid. The only way
you get to medicaid, folks, is to not have countable assets.
(15:59):
And frank, how do clients not have countable assets.
Speaker 3 (16:03):
Either, Well, that assumes they had them in the first place, right,
Some people just don't have them. But if you have them, right,
then you need to do something with them. You can
give them away. And we have clients sometimes that come
in and say, well, I gave everything to my kids
X number of years ago, or I put their name
on the deed, or you know whatever, and that works
plenty well and in some case, you know, in many circumstances,
(16:24):
like people think that that's kind of the best way
to do things until they get hopefully educated about different options.
Speaker 1 (16:30):
Well, there are tax consequences to that from a capital
gains tax perspective carry over basis the house, you lose
your exemption from capital gains tax, not gift tax. We're
not talking about gift tax, but income tax and capital
gains tax consequences when money is gifted out right to
the kids, not to mention the kids might do the
wrong things with the money, right or unintentionally. They might
(16:51):
die before you.
Speaker 3 (16:52):
Right, And we've had all those things happen. So while
gifting it away is one option, it's it's much better,
much safer to do trust planning. That goes hand in
hand with the Medicaid trust that we've been talking about
for the first segment of the show.
Speaker 1 (17:04):
And so the Medicaid Asset Protection Trust is just that
it protects your home, It protects your money, your stocks, bonds,
the mutual funds, all the things, annuities, non qualified annuities.
But let's talk and I kind of tease this out
at the end of the first segment. If you're not
your own trustee and the principle has to be locked
(17:26):
up inside the trust, how does that work for people,
especially if they're not knocking on the door of the
nursing home they want to live a while independently. Yeah,
how do people get comfortable with the concept of this
Medicaid Asset protection trust?
Speaker 3 (17:41):
Well, for one, I think a big misnomer here is
that everything you own has to go in it in
the first place. We frequently get clients that come in
and they've heard things, or they've done some research on
their own, or maybe they've even seen other attorneys, and
they have this big misconception that like, once you have
this trust, that every single thing that you own goes
(18:01):
in it the second.
Speaker 2 (18:02):
That you do the trust.
Speaker 3 (18:04):
Then, at least here in New York, again, we're pretty
fortunate that, you know, the state exempts certain assets right
off the top, and one of the biggest ones that
we exempt where virtually nowhere else does, very few other
places do, are retirement accounts. So if you have an
IRA A four oh one K, A four h three
B A four fifty seven, you know if it's attacked
the third retirement account that is an exempt asset here
(18:27):
in New York for medicaid purposes, so you don't have
to put it in a trust to protect it.
Speaker 2 (18:31):
It's already protected.
Speaker 3 (18:32):
And honestly, if you put it in a trust, you'd
have to liquidate the account, then put all the stuff in,
pay a lot of income tax, and start five years
rolling on it. So logically speaking, it doesn't even make
sense to do it, even though, especially when you don't
even have.
Speaker 1 (18:46):
To and let me borrow from an old commercial that
is huge. Most people come in with a couple of
assets that are meaningful. You know, we don't have pensions anymore.
Unless you were teacher where you worked for the government,
you don't really have a pension. Now you have some
kind of qualified retirement plan and maybe you have a
(19:08):
four to oh one K and maybe your employer did
a match as we do.
Speaker 2 (19:12):
But you're on the hook.
Speaker 1 (19:13):
You got to put money away for your own retirement
and hopefully you've done it successfully and you've put enough
of money away in your four oh one K and
your IRA, and that's something we'll talk a little bit
more about in the second half of the show. But
once you get money into that IRA, if you need
medical assistance and you need Medicaid, that IRA could be
(19:35):
a million dollars, could be two million dollars.
Speaker 2 (19:37):
That IRA is exempt.
Speaker 3 (19:38):
Yeah, it doesn't count. So the the asset limit is
thirty one and seventy five dollars.
Speaker 2 (19:44):
Probably going to go up a little bit for the
new year.
Speaker 3 (19:47):
Did I just checked that the new numbers are not
have not been released by the state as of five
minutes ago when I looked, So that's probably going to
change just a little bit.
Speaker 1 (19:56):
That's why you have to join us on January thirteenth
at twelve noon to get the new numbers for dead Monday.
Speaker 2 (20:00):
Hopefully we have them by then.
Speaker 1 (20:01):
And it's a thirty minute webinar and you're gonna get
all the new information, all the things, all the changes
in Medicaid. Sign up right now at our website again
puro law dot com events. Sign up for Medicaid Monday
and you can join us. It's a thirty minute live webinar.
Frank myself can unroll all the new rules for Medicaid
this January thirteenth, twenty twenty five. Get ready, join us
(20:24):
for the thirty minute webinar. And that's the Medicaid program, Frank,
that is so vital to our clients.
Speaker 3 (20:31):
It's for many people, it's the only way that they
can can get the care that they need and not
lose everything. Right, is they actually qualify for Medicaid. But
to do that, as we've been talking about, yet to
be financially eligible. So going back to your question, lou So,
when people come in right and they're scared to the
strust because of how it sounds and how restrictive it seems.
First big thing is if you if you have a
(20:52):
big retirement account, which many people either have them or
they're building towards that they don't even go in there.
So I think people just hearing that alone makes them
feel a lot better about the situation because it's like, well,
what if we told you you have your big bucket
in your IRA that will always be there, always in
your name. You will have always full access to it, right,
that doesn't change, and you can.
Speaker 1 (21:12):
Touch that money and use it for yourself any time
you want.
Speaker 3 (21:16):
Because it's not tied to the trust in any way.
So that that's a big one. The second piece is like,
one of the other big assets that people come in
with typically that they want to protect is their house,
right the family home. Now, it could be it could
be a very valuable home. It could be just valuable
to you. It doesn't doesn't really matter, right, if it's
an asset that you have that you want to protect,
(21:38):
it makes I think it's worthwhile to consider doing a trust.
So with a house, it's it's actually again very non intrusive.
We change the deed, we put the we'd move the
residence from your name or you and your spouse into
the name of the trust. We don't just give it
to the children. We put the children's name on the
deed as trustees for your trust, but it's not the
same as just putting it in their name. And then
(21:58):
once your house is in the trust, your trustees, who
are people of your choosing right, can can still sell
it for you. You can still live in it, that
you still can maintain it. You still remain responsible for maintenance,
upkeep taxes, you keep your star exemption. So at the
end of the day, if you just want to stay
in your house, live in your house, age in your house,
(22:19):
whether it's in a trust or not, you're allowed to
do that, just like you did, or just like you
were always able to before you did the trust in
the first place.
Speaker 1 (22:25):
Now a lot of people with the home come in
and say, well, I want to put my kid's name
on the deep. Yeah, and you know that's noble and
valiant and good thinking. However, there's a better way, and
some people do something called a life estate deed where
they do put the children's name on it and they
reserve a life estate, but the trust actually gives added
(22:47):
layers of protection. Just talk a little bit about the
advantages of the trust versus a life estate deed.
Speaker 3 (22:53):
So the biggest thing with life. Estates that come to
mind are one, if the house gets sold and you're alive, right,
you get some money back from your life estate interest.
That could cause issues if you're on Medicaid.
Speaker 2 (23:05):
Yeah.
Speaker 3 (23:05):
Other thing is like if you give your kids, if
you give your kids what's called the remainder interest, what
if your kids die before you, then now your house
is part of their estate plan. And that's assuming that
they had one. And we kind of mentioned it before.
We've had issues where children predecease parents and then now
their house goes to unintended people.
Speaker 1 (23:23):
Not to mention, you know, my aunt built her house
which was in the trust, and it has appreciated send Hudson,
New York, and it's a hot market, so it is
appreciated considerably inside the trust. And if it was in
the nieces and nephews' names, we'd be paying a boatload
of capital gains tax. But the trust qualifies for the
grand tours two hundred and fifty thousand dollars exclusion from capital.
Speaker 2 (23:47):
Gains, which is huge. Yeah, big help.
Speaker 1 (23:50):
And we're going to take a short break for the news.
When we come back, we're going to finish up our
conversation about the Medicaid Asset Protection Trust. We're going to
talk about reval locable trusts and how they work and
why they work, and great alternative if you're not ready
for the Medicaid trust, and then all the other things
that you should be thinking about to put into your
plan for twenty twenty five and beyond. We'll be right
(24:12):
back Bureau your host for this Morning in Studio live
with my partner Frank Hemming. And Frank does a lot
of the Medicaid work that our firm does. Works with
our clients and families, helping them to find the ability
to bring care into the home, the ability to pay
for that care, the ability to if you need a
(24:35):
nursing home, pay for the nursing home without spending every
penny that you have. All things that we do, and
as I mentioned, we have a webinar coming up on
June January thirteenth, or rather the second Monday of January,
the second Monday of twenty twenty five, on the changes
in Medicaid for twenty twenty five, thirty minutes twelve to
(24:56):
twelve thirty on the thirteenth of January.
Speaker 2 (24:58):
Join us.
Speaker 1 (24:58):
You can sign up on our website puro Law dot
com also want to give a little heads up because
we have another seminar. We do in person, we do
web based education, we do the radio show. We try
to educate our clients as to what the options are,
and that's what today's show is all about as well.
But we are going to do our quarterly Trust Administration Workshop.
(25:20):
So if you want to look under the hood and
see how it trust works, why it works, what the
mechanics are, how that engine operates, come join us for
the Trust Administration Workshop. If you have a trust already, great,
come in and we will talk about how the taxes
get paid, how accountings get done, what a trustees responsibilities
(25:40):
and obligations are, what the rights of a beneficiary are.
Tuesday February eleventh from noon to one thirty, and this
is going to be at the Trust Code Bank Center.
Trustco is our gracious sponsor for these events. It's at
six Metro Park Road, Albany, Trust Co Bank Center on
Tuesday February eleventh, from twelve to one thirty. Lunch will
(26:02):
be served and we hope that you can join us
if you want more information on the Trust Administration Workshop again,
or any of the live or web based educational events
that our firm runs puro law dot com. Go to
events for things that are already in the can as
they say, go to resources. And we hope that you
utilize that website because we try to put information up
(26:24):
there that is current relevant and that helps our clients
make informed decisions. And that's why we're here on Life
Happens Radio to help you make informed decisions for your family.
I had my three children at home for the holidays
and they're still there, and that's a wonderful thing. It's
a blessing. And you know, we have three beautiful children
(26:48):
with a spouse, a fiancee, and a girlfriend, so all.
Speaker 2 (26:52):
Very very close.
Speaker 1 (26:53):
And our family has become very close, the couples and
my wife and I and it's great tradition and holiday
time for all of us. And we have three grand puppies.
Speaker 2 (27:06):
So okay, I forget them, three dogs that inhabit the
house during the holiday season.
Speaker 1 (27:12):
But we're waiting for the next shipment, which which will
not be dogs. We hope, we hope there are some
grandkids on the way sooner or later. And that's life, folks.
You know, when once you get through it, life happens.
It's happening every day, Frank, your family is growing.
Speaker 2 (27:28):
Yeah.
Speaker 3 (27:28):
When I when I started with the firm, I was
I was with my now wife. We were together, but
we weren't engaged yet. We were just boyfriend and girlfriend.
And I've gone through my time at the firm through engagement, married, child,
and now puppy.
Speaker 2 (27:40):
So yeah, full circle. Yeah.
Speaker 1 (27:44):
So in terms of questions, we can take them eight
hundred eight two five, five nine four nine. That's eight
hundred talk WGY. I know you're out there. Folks, pick
up the phone, give us a call. Don't be afraid
ask that question. There are no bad question, as they say,
so we'd love to hear from you. We spent the
first half of the show talking about healthcare, long term care,
(28:08):
how to pay for that care, and the benefits of
a Medicaid asset protection trust. And every time we do
this and in my mind, I'm a visual so I
have a picture in my mind of a float chart.
Speaker 2 (28:22):
I've not surprised you said that and how many times
you've done them.
Speaker 1 (28:26):
It's an AHA moment for clients when we take their stuff,
all of their assets, their I ray's, four oh one k's,
their cash accounts, bank accounts, checking savings, their income from
social security retirement pensions, and the assets that they want
to protect in the trust, including their home and a
(28:47):
whole host of other things stocks, bonds, mutual funds, and
non qualified annuities, life insurance that has cash value. The
trust holds and protects all of those things in a
wrapper that is very flexible. And I just want to
finish the thought frank on those few things that we
put into the trust. Yeah, that allow people to control
(29:07):
it much more than they think they could when they
walked in the door.
Speaker 2 (29:10):
Sure.
Speaker 3 (29:11):
So another kind of advantage that we tell people is,
you know, at the end of the day, your trustees
are the ones managing everything for you. You can pick
your trustees and then you can fire your trustees and
change them something happens. So so, Lou, you always like
to use your kids as the example for you. So
if you put in your three kids that everyone's getting along,
everyone's on board, everyone's doing what they should, then there's
(29:34):
no issue. Then you have three capable people to help
if something happens. If one of them, two of them,
or all three of them start making decisions that you
and your wife don't like, don't approve of, right, or
they are they don't do something that you want them
to do. You can change your trustee at any time,
as long as you've got your your wits about you,
as long as you're competent, you can change your trustee.
(29:54):
So in a lot of regards, even though you're not
in control, you're still in a lot of control because
you're in control of the people who are in control,
and if they don't do what you want, you can
remove them. The other I think biggest misnomer and misconception
here is that once there's funds, whether it's cash, whether
it's brokerage accounts, whether it's you know, other stocks or
(30:17):
other things, that once there's assets within the trust, that
those assets cannot be accessed any longer. And that again
isn't true. So typically, again how we normally draft this
is we name beneficiaries during the lifetime of the grand tours.
Typically this would be the children, it could include grandchildren
as well. So it luwell used you. So if we
drafted you a trust, if you put your kids in
(30:38):
charge of it, and we said that during your lifetime,
your kids and your descendants are your beneficiaries during lifetime,
then if we need money out of the trust, your
kids can distribute money from the trust to themselves. Now
they're holding your money, and then they can use it
for you however you want them to. So that you
want to take a trip, you want them to buy
you a car, you know, you want to do some
(30:59):
other things, maybe pay off a debt. They can grab
that money, take it out of the trust, circle it
around and use it how you want them to. And again,
if they don't, you can remove them as trustee or
One of the other biggest powers that the maker of
the trust has in this instance is you can also
change your beneficiaries at any time. So if your kids
really go off the rails and don't do what you want,
(31:20):
you can not only remove them as trustee, but then
you can remove them as beneficiary as well and say, well,
now not only are you're not in charge any longer,
but now you don't get anything at the end either.
Speaker 1 (31:30):
So folks here, oh, it's an irrevocable trust and I'm
not in charge anymore. Well, yes, it's an irrevocable trust.
By definition, No, you're not in charge. Your children are
in charge. But if anything happens and your children are
not performing or behaving in a manner that you deem appropriate.
Speaker 2 (31:50):
You can remove them, and you can change trustees.
Speaker 1 (31:54):
And if you don't think that's powerful enough, then not
only would you change them out as trustees, but you'd
also change them out as beneficiaries. And if your children
have four kids and they're each getting a twenty five
percent share, and all of a sudden, three of them
are getting a third, a third, a third, the one
who just got zero is not going to be a
happy camper.
Speaker 2 (32:14):
Nope.
Speaker 1 (32:15):
And so that is leverage. That's an ability that you
have to make sure that the trust is being administered
the way that you want it to be, and you
can change beneficiaries at any time. And Frank, there is
a provision. My favorite statute in the whole wide world
is the State's Powers and Trusts Law, Section seven Dash
one point nine. And that may not mean anything to
(32:36):
you yet, But Frank, how does that help.
Speaker 3 (32:39):
It allows the either, Well, in this instance, it's it's
meaningful because it actually allows a trust to be revoked,
even if it says that it can't be as long
as you have the consent of your beneficiaries.
Speaker 1 (32:52):
And oh, by the way, you have this trust. It
says it's irrevocable, which qualifies it for Medicaid. So it's
a protective trust. But you have a statute in New
York that says, oh, it's irrevocable, but if I get
the beneficiaries to consent, it's actually revocable.
Speaker 2 (33:10):
And oh, I.
Speaker 1 (33:11):
Can name the beneficiaries so I can find cooperative people.
And if you have a recalcitrant child who is getting
whispered in the ear by maybe their spouse, that's.
Speaker 2 (33:25):
Our twenty five percent. We want that. We want to
get that twenty five percent.
Speaker 1 (33:28):
Don't revoke the trust, don't consent, then guess what, you
have three other kids that will consent, and now they
each get a third or third or third. So that's
the beauty of the Medicaid trust. When we do our
diagram and people see their own family, their own assets,
their own income on a diagram that explains it it,
(33:49):
there is an aha moment where that comfort level comes in.
And we're going to go right to the next generation, Frank,
because once you create this trust, and we're going to
talk about revolvocable trusts next because that's another very powerful tool. Sure,
but when that trust is over, is it really over?
(34:09):
And how do we get protections for that next generation
because folks, I don't know about you, but I worry
about my kids their future, their financial future. Is Social
Security going to be around for them? Is medicare going
to be around for them? Have we talked about this
with Hugh Johnson last week? We have a thirty six
trillion dollar debt and a debt service of one point
(34:30):
two trillion dollars a year that the government's paying an
interest on the debt one point two trillion dollars a year.
And that's going nowhere, folks. But up so what do
our kids have? They have a whole lot of things
that are going to hit them like a ton of bricks.
But if we can build a plan for our children
and our grandchildren that we were lucky we lived in
(34:52):
a great generation. Boomers were able to accumulate wealth. They're
going to inherit thirty trillion dollars over the next twenty
years in a transfer of wealth. How do we protect
that money for the next generation.
Speaker 3 (35:06):
So we frequently counsel clients on not only planning for yourselves,
but then what do you want to do once you're gone?
And how do you want to do it? And I
would say, this is probably right up there with the
people's on people's minds of what they want to accomplish.
Does not only protect themselves and get their plan taking
care of for themselves, but you know, protect the next generation,
(35:28):
like you're talking about Nolu. So what a lot of
people now are doing is they're building in subsequent trusts
or contingent trusts that say, upon the death of the
grand tours, well, now your beneficiaries each get a trust,
so again we'll use you. So when you pass, you
could write into your trust if everything's going to go
one third, one third, one third to your kids, that
each child will get their one third interest. And now
(35:50):
instead of just getting it outright themselves where it's on
the table for bad things like a divorce, like medicaid,
like bankruptcy, things like that, if we actually build it
into a trust, now it's protected from all the bad
things that could happen to your kids. So it protects
against divorce, from medicaid qualification if they need it, bankruptcy
(36:10):
if they get sued, you know, any of the bad
things that can happen. And we can actually build it
in of and design who the trustees for each of
those trusts are going to be so in your case
because you have children you like and trust so far anyway,
typically you could leave your kids in charge of their
one third interest, so your daughter can manage hers, your
two sons can manage theirs, and then it works just fine.
(36:32):
They can access it however they want, they can use
it for however they want. But now it's earmarked off
to the side that if anything happens to them, their
personal things may be at risk that those creditors and predators,
but at least their inheritance that they got from you isn't.
Speaker 1 (36:48):
And you may not have thought about this for your
daughter yet, but as she gets older and she starts.
Speaker 2 (36:53):
To date, now I have a trust for her in
my will. There you go.
Speaker 1 (36:57):
So as you think about Okay, you know the divorce
rate is fifty two percent. I have three children. What
are the odds that someday one of them gets divorced?
And we've done a lot of prenuptial agreements for clients,
which are wonderful. But you can avoid the prenup for
inherited assets by holding them in this trust for your children.
(37:19):
They cannot be touched by creditors predators. As you said,
including divorcing spouses, and those can be some of the
most hostile creditors that your children will ever have. Those lawyers,
on the other side, are going to try to target
every asset that you've left to that child, and you
don't want that to be pulled in and you don't
want it to be.
Speaker 2 (37:37):
Subject to creditors.
Speaker 1 (37:38):
There's a flip side to this coin, because if your
children are wildly successful and they grow their own estate
into a point where it's taxable and they have to
pay a state tax. We don't talk a lot about
state taxes because the federal exemption is now fourteen million
dollars for twenty twenty five. So if you're under fourteen
(37:58):
million dollars into only twenty five, you don't pay federal
estate or gift tax. In New York it's about seven
million dollars. So for those people that are fortunate enough
to have estates that grow into those high brackets, and
you know, if your child invested early in Nvidia and
has piled up wealth or bitcoin, I have a lot
(38:20):
of bitcoin multimillionaires that bought bitcoin several years ago at
very low prices, and now they're worth a lot of money.
The estate tax rate on those people living in New
York is about fifty percent. Once you get over those limits,
what you leave to your child in this trust is
exempt from a state tax as well, So you can
keep the wealth out of the hands of creditors, predators,
(38:42):
and the government because the assets that you leave to
your family through the trust are exempt from a state tax.
Wonderful tool. The beneficiary controlled trust is what we call it,
and we talk to our clients who have kids about
this every time we talk about a trust, and we
talked about the Medicid Protection trust. But this also works
if you're doing just a revocable trust. So distinguish that,
(39:05):
Frank a little bit from the Medicaid trust.
Speaker 3 (39:07):
So a revocable trust, biggest or one of the biggest
differences is who your trustee is. So typically with a
revocable trust, it's the maker, it's the grand tour. So, Lou,
if you are doing this type of trust, you could
be this trustee and I did right, you have to say,
and I think if you've been pretty open about that.
So if you have a trust, it's revocable, you're in
charge of it, so you do what you want. You
want to change something you can. You want to put
(39:28):
stuff in, you can. You want to take stuff out,
you can. You want to amend it, you can, you
want to revoke it, you can. At the end of
the day, it's you being you. The biggest thing with
this type of trust is its purpose is not to
protect assets long term against the nursing home and to
qualify someone for medicaid, because since you have so much freedom,
access and control, all the assets held within this type
(39:50):
of trust are accountable for medicaid purposes. So we have
clients that sometimes aren't ready for the medicaid trust. Sometimes
they're too young for it. Sometimes they have enough wealth
or not worried about it. Sometimes they have insurance that
they don't want, or sometimes they have they don't have
any children or anybody they really want to provide for,
and they don't really care if they use their money
for long term care. So there's many reasons that this
type of trust may be appropriate. It just it's the
(40:13):
way that you know. It's mechanics are different because you're
not giving up that perceived control. You're keeping all of that.
It's just the endgame is a little different because you're
not looking to lock things up and protect against the
nursing home.
Speaker 1 (40:23):
So for me, let me tell you why I think
this is valuable. I have a business, I have other assets.
I have a fairly complicated a state. I would say
relative to some people, not relative to other people. You know,
I have clients that are far more wealthy and complex
than anything I would ever consider. And this isn't just
for wealthy people. Just you got to get that out
(40:45):
of your mind. This is for anybody that has any assets,
Because if I become incapacitated, if I can't manage things,
if I have a stroke, or I have an accident,
or develop Alzheimer's, which is genetically in my family, then
I want to have the ability to say, okay, I
have a trust that when I'm no longer.
Speaker 2 (41:03):
Trustee, I know who is.
Speaker 1 (41:05):
I've appointed them and I've told them how I want
my trust to be managed, how to manage each asset,
how to take care of other beneficiaries, how to make
sure that everybody in the family gets the fair share
and the right people are in the right roles. That's
to me, one of the biggest values. And when I die,
the last thing I want is my family running this
(41:25):
through court, through a probate court, and the trust avoids probate.
So all of these assets are managed for me while
I'm capable by me, and then for me while I'm alive,
and then for my beneficiaries, and then those wonderful beneficiary
control trusts roll right out of the revocable trust.
Speaker 2 (41:43):
Sounds pretty good. Sounds good? Yeah, all right, Good.
Speaker 1 (41:45):
Time to take a break, because that's a high note.
When we come back. This isn't just for the elderly.
This isn't just for the wealthy. There are things you
need to have in your estate plan going forward for
twenty twenty five. When we come back, we're going to
talk about the escent elements of an estate plan. You're
listening to Life Happens Radio. We'll be back right after this.
(42:06):
I'm Lupiro, your host for this morning. We are on
Life Happens Radio and Talk Radio WGY. I am live
in studio with Frank Hemming soon to be the pumped
up Frank Hemming. Because I'm reading the blast for today's show.
Frank Yes says that your New Year's resolution is to
start lifting weights.
Speaker 2 (42:23):
Is that true? It is?
Speaker 3 (42:24):
It's a little it's a little misleading, just because I
actually already kind of did, but I can give the
thirty seconds spiel on why that is, so let's do it.
Speaker 2 (42:32):
So we have.
Speaker 3 (42:33):
A consultant that we've been working with at the firm Ye,
a wonderful guy named Steve Riley. And one of the
things that we've been talking about in our sit down
because we have classes with him every two weeks, and
one of the things that he's talked about is is
getting stronger as you get older. That he has a
physician that's prominent in his life and he's done a
lot of research about how people age and how people
(42:55):
age better. And one of the biggest things that he
has found out is as you age, you lose muscle
mass and that leads to falls that it leads to
health issues and things. So you want to actually get
stronger as you get older. And I've been a pretty
regular exercise person for the last several years. I really
took that to heart of when my daughter was on
(43:15):
her way that I wanted to.
Speaker 2 (43:16):
Make sure that I was healthy.
Speaker 3 (43:17):
That way I could, you know, play with her and
do all the things I wanted to do as a dad.
But I haven't really been a weightlifter or anything. So
I have a new app on my phone that I've
been using before sickness pretty regularly, and I'm just trying
to get in now. I don't want to say better shape,
because I hope I'm in okay shape already, but I
want to get physically stronger so that way, as I age,
(43:38):
I hopefully age a little better.
Speaker 1 (43:39):
One of the things, folks, that you can pledge to
do and make your resolution and hopefully stick to it.
There are a lot of apps now in a lot
of ways. I have the Peloton app and I use
that for certain things. I go to Planet Fitness ten
bucks a month. You can't beat it. There you go,
and you know, I get my workout in there. But
I've been a gym rat since I was in high school.
(44:00):
I played football, played sports, and then played college football.
And when you're in college in football off season, you're
in the weight room, yep all the time. And we
had a weight room in my fraternity house with a
full squat rack, a full bench press, and you know
the bench I got bench up to my three hundred
pounds when I was in college, and I have stretch
marks to show it. I can't lift anything near that today,
(44:20):
but without that, you do deteriorate. I mean you start
to just break down. Yeah, go back to my aunt.
My aunt worked eight hours a day in a store
making sausage, meatballs, serving the public all of the great
foods that she served at Piro's Italian Imports down in Hudson,
New York. And when she got home at five o'clock,
she walked you to three miles a day, Yeah, which
(44:41):
is great, vigorous walk, not just loafing around, you know,
pumping the arms and walking to to three miles a day.
So when she was ninety five, she was still pumping away.
You know, she's one hundred and two now, so she
slowed down a bit, but she got to one hundred
and two for a reason.
Speaker 2 (44:55):
Yeah, take care of yourself.
Speaker 3 (44:57):
Let's say, you know, when we have people come in
and they're in there nineties or mid nineties, later nineties,
or even somebody like your end who's past one hundred,
you know, they're they're not typically overweight people. They're not
you know, seemingly unhealthy people. You know, so there is
some there is a lot of credence to you know,
stay healthy, do your things, stay active, whether that's mentally,
physically or both.
Speaker 1 (45:17):
So get off your couch, get to the gym, get
to the track.
Speaker 2 (45:24):
Get out there. I played. Uh, I was lucky.
Speaker 1 (45:27):
I got woken up this morning by my son, who
plays pickleball, and he's a very good pickleball player and
he plays in a very stellar group of pickleball players
and they were missing someone. So he woke me up
and said, hey, Dad, can you fill in? So I
got to play pickleball with my son this morning, which
was fabulous. Yeah, and you know, got a nice workout
in before the show. And this afternoon, I'm going to
go out and play paddle tennis, which is an outdoor
(45:48):
game with a bunch of friends.
Speaker 2 (45:50):
So I played last night. I'm gonna play again today.
But you have to stay active.
Speaker 1 (45:53):
You got to keep yourself in the game, and you
have to be active to stay in the game.
Speaker 3 (45:58):
And the other thing is just and I think just
go without saying. Anybody who who works a job, you know,
like we have a stressful job, right. I work very
hard at my job, just like everybody else.
Speaker 2 (46:06):
At the firm.
Speaker 3 (46:07):
I exercised too to kind of get my mind off
things and kind of help manage stress. And that's a
big help, you know, I feel better if I run
three miles at the end of the day, I feel
a lot better about things.
Speaker 2 (46:17):
So and a lot of people run. I have never
been a runner. It's not something I don't enjoy it,
but I do it.
Speaker 1 (46:23):
I had to run for, you know, training for football,
and I just hated the distance running. I'd run sprints,
you know, I'll do forty yard sprints, ten yard spris,
hundred yard sprints, But just to go out and run
three four miles, Yeah, to me, that's just not fun.
Speaker 2 (46:36):
Yeah.
Speaker 3 (46:36):
Like I said, I've kind of I've learned to like
it more than I used to. But I ran track
in high school, but I was I was always a sprinner.
I was never a distance runner. Now now I can
do four or five miles and I feel pretty good afterwards. Yeah,
that's kind of crazy that I've got to that point.
Speaker 2 (46:48):
That's fantastic. Yeah, but just fantastic. I get off the couch.
Speaker 1 (46:51):
All right, So let's talk about the documents that everyone
should have. We got about four minutes left, all right,
so we're gonna cover them real quick. Power, attorney, healthcare,
proxy and disposition, a remains appointment. You should all have
a will. Everybody should have a will. But trusts are better.
We talked about the Medicaid trust, the revocable trust. A
will goes along with that. But let's talk about the
(47:12):
power of attorney. Frank, real quick, essential document when you
need it.
Speaker 3 (47:16):
Oh my god, yeah, it's it's arguably the most important
to do my side of the practice right, because the
power of attorney is the document that says who if
you've appointed to make financial decisions, especially for when you can't.
I don't want to say only for when you can't,
because it works while you're healthy in a lot of respects.
But it ensures that if something happens and you can't
make your financial decisions, there's someone of your choosing or
(47:37):
a group of people that then can make your financial
decisions for you. And in our case, says we do
so much Medicaid work, we want to make sure that
not only do you have a power of attorney, but
allows for gifting, for trust formation, for trust funding. That
way we can do whatever we want with moving of assets,
creating trusts, getting eligible for long term care, getting eligible
for Medicaid if you ever need it.
Speaker 1 (47:57):
And a lot of people ask do I need a
lawyer to do a power of attorney and when you
see the documents that come through our office and people
come into us when they're in extremists, I'm in the hospital,
Mom's or mom is. Mom's in the hospital, she has
to go to the nursing home. We had her real
estate lawyer or her friend who's a lawyer, or her
(48:19):
friend who had a power of attorney that they just
copied over and put, you know, different names on it.
Speaker 2 (48:24):
That's a disaster.
Speaker 3 (48:25):
Frank It very rarely goes well. If you go to
a non state planning attorney that you know, typically there's
there's parts that are missing, there are provisions that are
and then there sometimes not everything is even done or
executed correctly. And they did do a big power of
attorney change in twenty twenty one, so sometimes like we're
still seeing outdated forms. There's a whole mess of issues.
(48:47):
So obviously we hope that you come to us, but
even if you don't, go see somebody who at least
does this as an everyday part.
Speaker 2 (48:53):
Of their practice.
Speaker 1 (48:54):
And everybody should have a power of attorney. We start
when kids go away to college. We have them signed
power attorney for their parents to be to do things
financially for them while they're away, yeah, usually to their benefit,
of course. And the healthcare proxy is next about a
minute to go.
Speaker 3 (49:07):
So it's a document just of says who makes your
health care decisions if you cannot make them for yourself.
Can only be one at a time. Here in New York,
typically this would be spouse and kids in an order,
but again it's anyone that you want. Just again, make
sure that you have one.
Speaker 1 (49:19):
And at the end, it's the disposition of remains.
Speaker 3 (49:22):
Which we do a lot of other firms don't probably
do it or don't do it as often as we do.
It's just a document that you execute during your lifetime
that says who takes care of your burial, your funeral,
your final arrangements when you pass. Because your healthcare proxy
and your power of attornity, as great as they are,
they die with you, so they can't be used to
then make those after death decisions because they no longer work.
Speaker 2 (49:44):
So what's right for you?
Speaker 1 (49:46):
What's the right plan for twenty twenty five?
Speaker 2 (49:49):
Come see us.
Speaker 1 (49:49):
We'll sit down with you, no cost, no obligation for
our life happens listeners, We would love to sit down
and talk to you about your situation, your family, your property,
your assets, your income, and develop a plan with you
for you to take into that future. Frank Hemming, thanks
for joining me in studio today. Thank you very much,
and thank you all for listening for twenty twenty four
(50:10):
and we hope you stay with us for the next year.
And happy new year everyone, enjoy the new year. We
hope twenty twenty five is better than before.
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On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!