Caution to take when admitting someone to a nursing home

Episode Transcript

Speaker 1 (00:01):
This is the Legal Exchange with Todd Lutsky from the
law firm of Cushing and Dolan and Susan Powers of
the Armstrong Advisory Group. Each week, Todd and Susan will
discuss many topics, including estate planning, how to avoid probate,
and protecting your money from a nursing home. If you
need assistance in any of these areas, or have a
question about another issue that may affect your future, call

(00:21):
eight six six eight four eight five six ninety nine
to make an appointment. That's eight sixty six eight four
eight five six ninety nine. Operators are standing by. Now
Here are your hosts, Todd Lutsky and Susan Powers.

Speaker 2 (00:38):
Welcome into the Legal Exchange with Toddltsky. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and I'm
joined by Todd Lutsky, a partner with the law firm
of Cushing and Dolan with a master's in taxation.

Speaker 3 (00:52):
Welcome Todd. How are you today?

Speaker 4 (00:54):
I'm never better in you?

Speaker 3 (00:55):
Excellent? Thank you? What do you have for us this week.

Speaker 4 (00:57):
As we approach the end of the month. Can you
believe it now? But I've got a couple of cases.
A Kentucky Supreme Court case. We haven't talked about this
in a while, but they do come up, and we've
talked about them a lot in the past. How to
sign an arbitration agreement when you enter I mean these cases.
I know we've talked about them, but folks, we think
the law is settled, and they keep coming up. And

(01:18):
this one I felt was important enough that I wanted
to bring it up and mention how this works. How
do you sign an arbitration agreement? Or maybe more importantly,
do you even sign an arbitration agreement?

Speaker 1 (01:33):
Right?

Speaker 4 (01:33):
And why do you? Or why do you not? Why
do you even have to? That's what I want to
teach you here in this case, and that's what this
whole Supreme Court of Kentucky case is about, because it's
that important. By the way, arbitration agreements apply when you're
admitting somebody to a nursing home. That's the situation going
on in this case. We'll come back to that. Then

(01:55):
we head over to Colorado and we've got an appellate
court case there, kind of a case, but I think
it works out. Okay. We've got an individual who is
a veteran right suffered traumatic brain injury in nineteen eighty five.
But then you know, he's got his house, he's paying
his bills, and he's just about done, and he misses
a payment on real estate taxes really through no fault

(02:16):
of his own, and then the state files a claim
and starts to take the house, the real estate house
away from him. And you know, what is his recourse
and what is his ability to get that house back.
But that's not really why we're taking this case. We're
going to take this case as to what he could
have done better to stop this from happening. And I

(02:37):
think this is going to be a really important case
for planning, because planning is not just about taxes and probate,
but it's how you can take care of a family,
take care of yourself. And I think you're going to
learn that from this case. And folks, we are at
the end of the month, so I want you to
really think about this guide. Getting this guide. It's it's
going to go away, but it's how to make your

(02:58):
IRA the beneficiary of your estate and life insurance. It's
very important if you're trying to do both a state
tax planning and nursing home planning. At the same time,
because this guide will explain in conjunction with a testamentary trust,
which has also explained how doing this allows you to
get not only a state tax planning benefits, nursing home

(03:21):
protection benefits on an IRA, which is strange in and
of itself, all while not causing any adverse income tax
consequences because you have to deal with income taxes when
you're dealing with an IRA. Lot of balls in the
air in this guide, they're all addressed. Call and get
it eight six six eight four eight five six nine

(03:42):
nine or Legal Exchange show dot com. You can download
it there again eight sixty six eight four eight five
six nine nine or Legal Exchange Show dot com. Over
to Kentucky Supreme Court case dealing with arbitration. Can you
imagine this goes all the way to Supreme Court? Anyways?

(04:04):
Sondra is admitted. Sondra rather admitted her husband Ray, diagnosed
with Alzheimer's, to Lantern nursing home, and as a condition
of accepting him, she was told she had to sign
this arbitration agreement.

Speaker 3 (04:21):
Is that not illegal anymore?

Speaker 5 (04:22):
I thought Obama pretty much pretty much Okay, Well, Sondra
did not designate with what capacity she signed the agreement.

Speaker 4 (04:35):
She just signed it. So during his time in there
he managed to suffer multiple falls, bed sores, significant weight loss, etc.
And then he died in August of twenty twenty. Sondra
files a suit for negligence and wrongful death. Makes sense. Lantern, however,
files a motion to compel arbitration. We don't want to

(04:59):
go to court. We want to go arbitrate this so
pursuing the Kentucky Living Will Directive Act. Apparently Sondra has
authority to make medical decisions, signing things, signing this agreement
to admit him in such as is such a such

(05:20):
a decision? The Circuit Court said, no, we denied Lantern's
motion to compel arbitration, stating that this is not a
health care decision, which makes sense.

Speaker 3 (05:32):
We've talked about that in the past.

Speaker 4 (05:35):
They appeal. The Appellate Court affirmed the lower court shocker.
They appealed to the Supreme Court. The Supreme Court elaborated
the Kentucky Living Will Directive allows a person to consent
to medical procedures, treatments, and interventions for an incapacitated person,

(05:58):
and signing an arbitration agreement does not amount to any
of these medical decisions. Therefore, we affirm the lower court
the appellate court, and that's the end of it. We're
not going to apply the rule of arbitration here, meaning

(06:20):
you get to go to court, right and you get
to have a jury decide your case.

Speaker 2 (06:26):
I'm going to need you to look this case up
and see how much they had to.

Speaker 3 (06:29):
Pay at the end of the day.

Speaker 4 (06:31):
Another case that does.

Speaker 3 (06:32):
Another hanging chad that you've left us with.

Speaker 4 (06:36):
That's what happens with these appellate court cases sometimes. Well,
actually the decision was made that the whole court case
was about whether or not the No.

Speaker 3 (06:44):
I know they have to go to court.

Speaker 2 (06:46):
I want the I want the results because shame on
them for wasting everybody's time and money by taking this
all the way to the Supreme Court. I know, when
they shouldn't have made her sign it anyway.

Speaker 4 (06:55):
Right, Well, you're jumping ahead, Susan, just because.

Speaker 3 (06:58):
You're so knowledgeable, because I'm on my box right now.

Speaker 4 (07:01):
So here's how it works. What are the tips and
lessons folks? When you're faced with nursing home care. I
get it, it's an emotional time. You're signing a bunch
of documents. You don't Things are thrown in front of you,
and you don't really know you know what to sign
and what not to sign. You're not probably even thinking clearly. However,
I want you to try to remember this one rule.

(07:24):
Who should sign? And when should we sign? And should
we sign? Number one rule. If someone tells you it's
a condition of admittance, that's not true. They are not
allowed to deny you admission to a nursing home because
you didn't sign an arbitration agreement. And that sounds like bribery, right,

(07:48):
it's like extortion. Yeah, so you can't you can't do that.
So first and foremost you really can say, I just
don't have to sign. And by the way, even now,
if you do sign, there are rules governing the procedures.
There's a notice Act that came out that governs the
procedure that you need to go through when signing this. Like,

(08:10):
you know, they've got to give you the property. They
got to tell you what it is. They got to
make sure you understand it. They got to give you
time to read it alone by yourself digest it. I mean,
they got to have bold letters where it says arbitration agreements,
so you can't miss it. So I mean there's certain
things that they that are in this Notice Act that
you have to have even if you're going to sign it. Okay,

(08:33):
And again up to you if you want to sign it,
but it's not a condition of admission. Okay, So let's
see you did sign it. Well, now is it going
to be enforced again? You can look at the Notice
Act to see if they followed their rules in sort
of educating you about what this document is you're signing.

(08:57):
That might be an out, but there might be an
easy you're out. Never sign it personally, right, as a
responsible party, bad idea. Never sign it as a power
of attorney, right. Remember, a power of attorney could have
language in there granting you the power to sign agreements, right,

(09:20):
or contracts.

Speaker 3 (09:21):
Which would bind them to the arbitration right.

Speaker 4 (09:23):
Right, it could if it's generally contracts and this isn't
a contract, you could fall in under that category. Some
of them might actually say you can sign an arbitration agreement.
So this be mindful. If you got power of attorney,
do not put DPA after your name. Guardian. I've seen

(09:43):
cases where if you're the guardian, you could bind somebody.
Perhaps Again, I don't know exactly. That's not going to
be a carte blanche answer, but I'd stay away from it.
Signing it as a spouse that doesn't necessarily give you
the power either, unless there's a parent authority that meaning
you obviously have the authority to do it. Always sign

(10:04):
it as a healthcare proxy, as we learn from this case,
because that is not a medical decision. It won't bind you.
You'll be okay. Folks. Learn about iras and how to
get them named to your state as the beneficiary. Get
the guide eight six six, eight four, eight five, six,
nine to nine.

Speaker 2 (10:22):
You've been listening to Todd Lutsky, a partner with the
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group. We've got much
more to cover when we return on the legal exchange
with Todd Lutsky.

Speaker 1 (10:38):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices,
and the future you envisioned for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance planning, estate tax
strategies and nursing home protection explains how naming your estate

(11:00):
it is the beneficiary of your IRA or life insurance
can at a layer of tax efficiency in nursing home
protection while still allowing your spouse access when it matters.
It's about keeping more of what you've built, working for
your loved ones now and in the years to come.
Get you a free copy today by calling eight sixty
six eight four eight five six ninety nine. That's eight
six six eight four eight five six nine nine, or

(11:22):
you can request it online from our website Legal exchange
show dot com. The proceeding was paid for and the
views expressed are solely those of Cushing and Dolan. Cushing
and Dolan and Ormstrong Advisory may contact you offering legal
or investment services. Cushing and Dolan and Armstrong Advisory do
not endorse each other and are not affiliated.

Speaker 6 (11:37):
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(11:58):
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Registered today by calling eight hundred three nine three for

(12:21):
zero zero one or on our website Armstrong Advisory dot com.

Speaker 1 (12:25):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
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You're listening to the Legal Exchange with Todd Lutsky, an
expert in elder life planning and taxation. Need help with
your estate plan? Call Todd right now and make an
appointment eight six six eight four eight five six ninety nine.

(13:50):
That's eight six six eight four eight five six ninety nine.

Speaker 2 (13:55):
Welcome back into the legal exchange with Todd Latsky. I'm
Susan Powers, a financial advisor with the Armstrong Advisory Group,
and I'm joined by Todd Lutsky, a partner with the
law firm of Cushing A. Dolan with a master's in taxation.
Where we headed now, Todd.

Speaker 4 (14:10):
We are going to go to Colorado, Okay, in appellate
court case. They are dealing with a disabled individual and
real estate. What's going on here? Air Force veteran suffered
traumatic brain injury in nineteen eighty five serving as a
military policeman one hundred percent service connected disability. I will

(14:36):
hard stop. He should get whatever, absolutely whatever he needs. Okay.
So then he purchases property in nineteen eighty eight, and
he pays off the debt in twenty eighteen. Nice, did
what you're supposed to do. Twenty seventeen. However, he missed
a real estate tax payment because the loan provider stop

(15:00):
opt collecting the funds for it for whatever reason. You know,
the loan provider, can you can have it in your
mortgage where it pays the real estate tax yeah, yeah,
so it somehow didn't do that for one year. Okay,
So what happens a lean by the state attaches in
twenty eighteen, and then that they sold the lean in

(15:25):
twenty eighteen to this LT income group at a public auction.
So I guess the state can sell your lean. I
didn't even know that. And it's it's in Colorado, so
state specific, folks, please be mindful. In March of twenty
twenty two, after David, he's still alive, right, So, after

(15:45):
David failed to act within three years, there's a statutory
right whenever the state takes your case again, state specific,
a three year statutory right to redeem the property from
el you know, if you want to. So he then
brings an action of quiet title, saying, well, listen, you
didn't act in three years, so David, you're going to

(16:06):
lose your house. David argued, well, wait a minute, I'm
disabled at the time. It says, you know, if you're
disabled at the time, you then have nine years to
redeem the property from the date of the transfer of
the deed was recorded. So nine years from the date
the transfer deed was recorded. Oh, the district court. So

(16:30):
now we're in court. The district Court says David had
shown by clear and convincing evidence that he was disabled
one hundred percent possibility. I was pretty clear that he
was disabled and lacked the capacity to act for himself
and manage his affairs. Thus he's entitled to the nine

(16:52):
year redemption statute statutory rule. So step back LT Income Inc. Well,
they didn't. They appealed to the appelled court. The LT
Income group argued that disability applies only to minors or

(17:13):
mentally incapacitated or adjudicated incapacitated by the court, and then
it goes on to say that the court affirmed the
lower court. So lt Inc. You lose, stating that your
narrow definition of disability is not consistent with case law
and the statute. If they meant for it to apply

(17:35):
only to folks that were already under a protective order,
so to speak, they would have said that in the
statue he is a loser.

Speaker 3 (17:42):
So I'm back on my soapbox here.

Speaker 4 (17:47):
So it turned out to be right that you know
LT Inc is wrong and they and David in this
case are disabled. Veteran has has nine years to file
a claim to get redeem his property. So I just
have to pay the back real estate taxes I'd imagine, yeah,
and redeem his property an.

Speaker 2 (18:04):
He paid his mortgage. The mortgage companies stand out the
ESCRO payments.

Speaker 4 (18:08):
It seems like there's really the mortgage company's fault. And
again that's one issue. We're going to talk about what
the lessons are. We can learn from that in a minute.
But in reality, I think the bigger issue is we
have other assets other than real estate to deal with
in our lives. Many people have iras and life insurance
and this is the end of the month, folks, it's
the last chance to get this guide packed full of

(18:30):
information on how naming your IRA a beneficiary of your
estate and or life insurance depending on the type to
your estate as the beneficiary can not only shelter it
from future estate taxes, which are two big hurdles as well,
it can protect them from the cost of nursing home

(18:53):
care following the death of the participant in the IRA,
or the life insurance owner for the surviving spouse from
the nursing home with no waiting period. And it can
get all done coupling it with a testamentary trust without
causing any income or estate tax negative consequences. Folks, that's

(19:13):
a lot of balls in the air, but it's worth
it learn how this works because they're tricky assets eight
six six eight four eight five six nine nine or
Legal Exchange show dot com. It's the last chance to
get it eight six six eight four eight five six
nine nine or Legal Exchange show dot com.

Speaker 3 (19:33):
So how could he have avoided all of this nonsense?

Speaker 4 (19:36):
Yeah, I think a lot better planning probably would have
been in order than doing nothing. I mean again, I mean,
I get it. If you're disabled, Right, if you're disabled
and you have a family and you want those families
to you want your family members to get these assets,
and you want them to go to them, then you
know it's it's sort of a red flag for you. Right,
planning does more than just avoid probate and p from

(20:00):
the nursing home. Right, you need to think about this
if you're doing it. So first, if the property were
in a trust and you're disabled like he is, right,
first of all, the fact that you're disabled tells me
I need to do planning number one. Number two, I
might be getting some kind of dis I might end
up in a nursing home. Maybe the type of trust

(20:23):
that I need to do should be irrevocable. So, I mean,
those are kind of red flags that make me think
irrevocable trust planning. But if we were to put the
trust property into the trust and it's irrevocable and you're disabled,
you know, likely there would be a trustee appointed, especially
if it's an irrevocable trust, and the trustee then would

(20:43):
be responsible for maintaining the property, yes, right, therefore paying
the bills, the taxes right upkeep, et cetera. And so
he would not have missed this payment. So if the
real if there's a trustee involved, again, more than just
probate in taxes, real income taxes or a state taxes,

(21:05):
this is caring for the property. So I mean, I
know when I serve as trustee, I have to pay
the real estate taxes. So we do that. We make
sure those payments are made, So I think that serves
us some protection. Now back on the irrevocable side, right,
So when you're doing this, you get the sense that

(21:26):
you know he was. People say, when should I do
an irrevocable trust? Right? How do I know? Well? I
always say age is important sixty years and up, you know,
because it takes five years to protect the assets from
a nursing home. However, if you're disabled or you have
early diagnosis of like MS or some other mobility impacting illness,

(21:48):
right then really it doesn't really matter how old you are.
Right at that point you say you ought to get
this five year clock running right away. So, yes, a important,
but I think disability is also important.

Speaker 3 (22:02):
Yeah, your health condition is certainly a factor can dictate
what to do regardless of age.

Speaker 4 (22:09):
Yeah. So now once we get the trust in there,
Remember trust could have a mortgage on it. This did,
That's okay. You can still people say, can I put
property in a trust with a mortgage on it? Well, again,
older folks don't always have mortgages on it, but some
of them still do. But if there's you know, if
there's one or you or you want to you don't

(22:30):
have a mortgage, but you want to keep the right
to borrow against it like a helock, then you've got
to get the helock set up before you put the
asset in the trust. And so if there is a mortgage,
I'm going to talk about what to do. And if
you want to be able to borrow, you got to
do this in advance, get that helock before you put
it in. Transferring encumbered property into the trust will not

(22:53):
trigger the dow on sale clause if you reserve a
life estate in it. So by reserving that life estate,
you won't have to tell the bank and they can't
call the note. So you get to keep your existing mortgage.
You just can't get a new one, Okay, but so
what you at least have all the options available to
you by doing this, so.

Speaker 3 (23:12):
People don't need it that stage when they're doing that.

Speaker 4 (23:14):
I just wanted people to realize that just because you
have a mortgage, like in this case, you could still
put it in the trust. That wouldn't have stopped David
in this case from putting it in a trust. Folks.
That's one idea for the irrevocable trust for life insurance.
But these irrevocable trusts can be used as the beneficiary
of your IRA and life insurance. Call and get the
guide eight six six, eight four eight five six nine

(23:38):
to nine.

Speaker 2 (23:39):
You've been listening to Todd Lutski, a partner with the
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group.

Speaker 3 (23:47):
And Todd will be.

Speaker 2 (23:48):
Answering your listener questions next on the Legal Exchange with
Todd Lutsky.

Speaker 1 (23:53):
Every dollar you've saved in retirement accounts in life insurance
tells a story, a story of hard work, smart Joe
and the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate

(24:15):
is the beneficiary of your IRA or life insurance can
at a layer of tax efficiency in nursing home protection
while still allowing your spouse access when it matters. It's
about keeping more of what you've built, working for your
loved ones now and in the years to come. Get
your free copy today by calling eight sixty six eight
four eight five six nine nine. That's eight six six

(24:36):
eight four eight five six nine nine, or you can
request it online from our website Legal Exchange showed dot com.
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
Ormstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.

Speaker 7 (24:53):
Mark Vonner is the CEO of Veterans Development Corporation. Mark
is a career military man, having served for nearly twenty years,
and we are so thrilled to have him and his
company as a key partner and the presenting sponsor of.

Speaker 4 (25:05):
The DAV five K Boston.

Speaker 7 (25:07):
Mark comes from a proud military family, including his father,
Victor and his brother Timmy.

Speaker 4 (25:11):
Mark talks often about.

Speaker 7 (25:13):
How serving his country was one of the greatest achievements
of his life, and that's one of the key reasons
that he chooses to give back to.

Speaker 4 (25:19):
This special community.

Speaker 7 (25:20):
Mark is honored to continue his legacy that his father
started when he built Veterans Development Corporation. Working to help
many disabled veterans and their families has become a lifelong
goal for Mark, and it's why he's taken the time
to fully support the DAV Department of Massachusetts. You can
join Mark Vonner and Veterans Development Corporation and help our
great American heroes today by making a donation or becoming

(25:43):
a sponsor. Simply visit dav five k dot Boston. That's
dav five k dot Boston.

Speaker 6 (25:53):
Inflation, housing costs, and rising interest rates are putting pressure
on families everywhere, from higher insurance and taxes to volatile markets.
Today's economic landscape is changing fast. This is Chuck Zada
from the Armstrong Advisory Group. We're hosting two financial seminars
this fall, first at Margaritaville Resort, Cape cod on October ninth,
and next at the Showcase super Lux and Chestnut Hill
on October sixteenth. Call eight hundred three nine three for

(26:16):
zero zero one to reserve your spot. We'll discuss how
to manage risk, protect your retirement and create a plan
that can handle economic ups and downs, whether it's core inflation,
market volatility, or policy changes. You'll learn about strategies that
may help you plan smarter. Registered today by calling eight
hundred three nine three for zero zero one or on
our website Armstrong advisory dot com.

Speaker 1 (26:38):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services. You're listening to the Legal Exchange and it's
time for Ask Todd, the segment where Tod will answer

(27:00):
your questions about anything and everything that's included in the
estate planning process. Once again, here's Todd Lutsky and Susan Powers.

Speaker 2 (27:10):
Welcome back. Tod, have a few questions from listeners for you.
First question comes from Tony and Rockland Mass and Tony writes,
years ago, I created a Nominee reality trust, listing one
of my children as the trustee and all four of
my children as beneficiaries, ought Rowe. After listening to a
recent show, I didn't realize that my children technically own

(27:31):
my home and vacation home. Now what can I do
to fix this? I have a good relationship with three
of my kids, but the relationship is strained.

Speaker 3 (27:40):
With the fourth. Yeah, so Thanksgiving's going to be awkward.

Speaker 4 (27:47):
Awkward. Yeah, so this is a problem with nomine realty trust, folks.
I remember we've given out a guide in the past
where we sort of demystify all the trust and this
is the one that leads the page. If you will
leave is the first topic of first trust I talk about. Yeah,
the problem is it's not really a trust because you
see that word nominee realty. Trust means provided the languages

(28:10):
in there, that the trustees have no power to act
over the trust assets. The beneficiaries do. They can only
the trustee can only act at the direction of the beneficiaries.
Well that's a problem, right, So that means that the
four kids are really the owners of the property, right

(28:32):
because they're the trust he can't do any trust.

Speaker 3 (28:35):
Even though it's beneficiary.

Speaker 4 (28:37):
He's not dead yet, right, But the language in the
document says that the trustee cannot act unless directed by
the beneficiaries, So that sort of shifts the ownership or
the control to the beneficiaries. So because of that, like
let's say, Tony says, well, geez, I don't really want

(28:59):
my fourth kid to share in this because my relationship
is strained with that child, so I don't really want
to leave him this this asset. Yeah, well, you can't
change it.

Speaker 3 (29:11):
The fourth child would have to agree to it.

Speaker 4 (29:13):
Right, likely it's going to say that it's requiring all
beneficiaries to direct the trustees. So you know, you're probably
stuck because I don't think you're going to get unanimous
for kids to say, yeah, I'm happy to fix this. Remember,
these trusts are amendable, they are revocable. They are changeable
at the direction of the beneficiary if.

Speaker 3 (29:35):
You get the permission of your children.

Speaker 4 (29:38):
And so at this point, you know, if you had
kids that were fine, you would say, look, let's just kids.
Will authorize the creation of a new schedule of beneficiaries
naming mom and dad. And then now mom and dad
are the beneficiaries. And then we as trustees will transfer
the property out to mom and dad and get rid
of this realty trust. And then mom and dad can
take that property and transfer it into their own estate

(30:00):
planning documents, whether it be a revocable trust or whether
it be an irrevocable trust. They're going to do their
estate plan and it's not going to include this realty trust.

Speaker 2 (30:12):
And then they can exclude the fourth child if they
wanted to. So, if everyone decides to guilt the fourth
child into this and the fourth child does agree, it
is possible to fix this.

Speaker 4 (30:23):
Okay, So if the fourth child agrees, then yes, it
is possible to easily possible to fix this.

Speaker 2 (30:29):
You could easily hold over their head, we have all
these other assets. But I'm sure your siblings will be
happy to split your share.

Speaker 4 (30:37):
I think that's where they might have to go, right
with this, because if this is just one asset and
they and they in fact do have a lot of
other wealth, yeah, that's that's available to still go four ways.
You might want to dangle that little carrot out there.
But if they don't, If they don't, it's going to
be a lot harder. I mean, if the house is

(30:57):
their whole estate and there's not a lot of other assets. No,
but if they don't agree, they don't they do. If
they don't agree, they don't own the house anymore. I
mean the other siblings are gonna have to beat up
their brother. Yeah, they come out in the recess, in
the parking lot out back. I don't know, but I
mean that's a problem, right, that's a problem.

Speaker 3 (31:16):
That's why you don't give your stuff away.

Speaker 4 (31:18):
Yeah, so it's it's problematic. But this is just one
kind of trust, Folks that in the guide this month,
we're talking about something strange. You don't hear about a
lot of testamentary trust different than a nominee realty trust.
It's a trust built into your will and it's a
trust that you need in place if you want to

(31:39):
learn how to protect your IRA and your life insurance
from the cost of long term care and reduce the
state taxes at the same time. That guide. This guide
explains that trust, and it explains that you can do
this with these two items and save income no adverse
income tax consequence, shelter the assets for a state taxes,

(32:01):
and protect them from the nursing home all at the
same time. It's the end of the month. It's the
last chance to get this guide. Folks, learn how these
things work. There's a lot of information, a lot of
stuff going on here eight six six eight four eight
five six nine nine or Legal Exchange Show dot com
and you can learn the rules on how to do

(32:22):
this eight six six eight four eight five six ninety
nine or Legal Exchange Show dot com.

Speaker 2 (32:30):
Our last question comes from Maryland in Newport, Rhode Island,
and Maryland writes, I am remarried and together my husband
and I have five children, including his adopted child. We
have become estranged with his adopted child. I've been trying
to get my husband to do some estate planning, but
it keeps putting it off. If something happens to us
both without a trust in place, how will our assets

(32:53):
be divided? Will his adopted child be included? What is
the best way to handle this from a lead perspective?

Speaker 4 (33:02):
Yeah, so no planning. The best way to handle it
is to plan. So you're right on, Susan. I think
we need to focus on the planning first. That's really
the best to go. Now they're saying what happens when
they're both dead?

Speaker 3 (33:15):
Yep, again, something happens to both of them at the
same time. I don't know.

Speaker 2 (33:20):
She doesn't specify what kind of trauma's coming down the pipe.

Speaker 4 (33:23):
And so I think if we're going to answer this
for folks, the reality of life is that no, they're
both not going to die at the same at the
same time. So I think we have to think of
the bigger picture here. As one dies and the other
one dies, So what's going to happen here? If there's
no planning and they're married and one dies, you have
to look at how the assets are owned. So if

(33:44):
there's no will, no estate planning, then you simply look
at asset ownership. Example, the home, Oh it was joint
with the spouse. Oh, okay, then it passes automatically to
the spouse.

Speaker 3 (33:57):
So if she dies, everything's going to him.

Speaker 4 (33:59):
If it's joint, everything would go to him, which means
you want me to have her die first.

Speaker 3 (34:04):
Have her die for us.

Speaker 2 (34:04):
You can play out the string of what happens to
his kids ian her kids, because they're not they don't
have any shared children.

Speaker 4 (34:12):
That's right. So let's say she dies first. If it's joint,
the house goes to him. If they have joint bank accounts,
the joint bank account goes to him, The joint investment
account goes to him. Perhaps an IRA has a designated
beneficiary him. Yeah, well we avoided probate because of the
ownership arrangement. The joint ownership arrangement avoided probate. The designated

(34:33):
beneficiary on the IRA avoided probate. There's no estate tax planning.
So if they're worth more than let's go they're in
Rhode Island, I forget the exemption. Rhode Island's like seventeen
one point seven million, one point eight million, something like that. Yeah,
something like that, close to one point nine. You know,
if they're worth more than that, when the survivor dies,
there will be a state taxes do not federal but state.

(34:56):
So we've avoided probate on the first death. We've done
no estate planning, so there could be a state taxes
on the second death. But more importantly, I think wife
odds are pretty good that if he doesn't have any
planning in place and dies when you're here, he's not
going to have it when he's alone. And then when
he dies, it's going to be who owns the assets.

(35:18):
So now, since your kid's wife are not his kids,
even if he dies with no will, the intestate succession
statute will push those assets to his next closest next
of kin.

Speaker 3 (35:32):
Would that include his adopted child?

Speaker 4 (35:35):
I don't know the statute in Rhode Island, but I
think you know adoption usually means that they're your child,
So yeah, the adopted child could get it, and more importantly,
his kids would get it, and there not enough her
kids would get it because they're not his kids. Those
are step kids to him, and step kids are not

(35:56):
legal beneficiaries.

Speaker 2 (35:58):
And if he dies, she could do planning, but then
his kids could be out.

Speaker 4 (36:02):
Yeah, if you flip it around the other way, everything
would go to her and the exact same thing would result.
But in the opposite direction, so his adopted child and
his kids would be gone.

Speaker 3 (36:13):
Yeah, he needs to understand the reality of this.

Speaker 4 (36:16):
He does. I mean unless they want to sit down
and do the right thing. So, folks, that's part of planning.
By not planning, it's a disaster. Learn how. Get this
guide and learn how to plan, especially for two assets,
IRA's and life insurance eight six six eight four eight
five six nine nine or Legal Exchange Show dot com.

(36:37):
It is the end of the month, folks, so call
and get it.

Speaker 2 (36:39):
If you have a question you would like to ask Todd,
visit his website Legal Exchange Show dot com and click
on the ass Tod tab. Maybe I'll be able to
read his question on your question on the air, and
hopefully his answer will stop you from becoming one of
his next real life stories. You've been listening to Todd Letski,
a partner with a law firm of Sheian Dolan. I'm

(37:01):
Susan Powers, a financial advice for the Armstrong Advisory Group.
We'll be back with more after this quick break on
the Legal Exchange with Todd Lutsky.

Speaker 1 (37:10):
Every dollar you've saved in retirement accounts and life insurance
tells a story a story of hard work, smart choices,
and the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
cushingon Dolan, IRA and Life insurance Planning Estate tax Strategies
in Nursing Home Protection explains how naming your estate is

(37:32):
the beneficiary of your IRA or life insurance can at
a layer of tax efficiency in nursing home protection while
still allowing your spouse access when it matters. It's about
keeping more of what you've built working for your loved
ones now and in the years to come. Get your
free copy today by calling eight six six eight four
eight five six nine nine. That's eight six six eight

(37:53):
four eight five six nine nine, or you can request
it online from our website legal exchange show dot com.
The proceeding s paid for in the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan d
Ormstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
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Speaker 8 (39:11):
Artificial intelligence is changing the way companies invest in how
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(39:34):
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Speaker 4 (39:50):
Register today by.

Speaker 8 (39:51):
Calling eight hundred three nine three four zero zero one.
We're on our website Armstrong Advisory dot com.

Speaker 1 (39:57):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.

Speaker 9 (40:11):
This is Michael Valila, adjudent of the Disabled American Veterans
Department of Massachusetts. We focus on the people returning from service,
not their specific illness or injury. Our number one goal
is to make sure our veterans have the necessary services
they need, be it physical, emotional, or financial, so that
their transition can be seamless. You can help our great

(40:32):
American heroes as well by making a donation today by
visiting dav five k dot Boston. That's dav five k
dot Boston.

Speaker 1 (40:41):
Your tune to the Legal Exchange with Todd Lutsky. If
you are a loved one needs a nursing homestay, call
Todd right now at eight sixty six eight four eight
five six ninet nine and let him make sure your
assets are protected. That's eight six six eight for eight
five six nine nine, or visit him online at Legal
Exchange show dot com.

Speaker 2 (41:01):
Welcome back into the Legal Exchange with Todd Lutsky. I'm
Susan Powers, a financial advisor with the Armstrong Advisory Group,
and I'm joined, of course by Todd Lutsky, a partner
with the law firm of Cushing and Dolan with a
master's in taxation. So, Todd, I have another real life
story of my own, and this is not one of

(41:22):
your clients. It's one of my clients. So, married couple
seventy five and seventy four. The wife was recently diagnosed
with pancreatic cancer. Kind of a grim prognosis, as is
with that kind of a diagnosed.

Speaker 4 (41:37):
Yeah, for sure.

Speaker 2 (41:38):
So they have around two million in assets, with a
million in real estate, in around two hundred thousand each
in iras, and then six hundred or so in other
investments in bank accounts. They created and funded revocable trusts
years ago, one for each of them. What is it
they should be thinking about now now that it's likely

(42:02):
that the wife does not have long to live, what
should they be doing?

Speaker 4 (42:06):
So this is actually a really interesting case and a
good one, and I think one that might involve a
lot of people, a lot of listeners that have done
their estate planning years ago and never got around to
just calling and saying I'd like to check in with
my estate planning attorney and find out, you know, do

(42:28):
I need to update? And by the way, I got
to tell you, I get a lot of clients, a
lot of you folks that are my clients listening out there.
You do call and you do say I'm checking in,
So I do know I get those calls and maybe
this person, just this group hasn't gotten around to checking up.
Maybe they did their plan fifteen years ago. They were

(42:48):
much younger, like sixty years old, and that's why they
did revocable trust planning, and now they need irrevocable trust planning.
Maybe we can ask them if they do, what do
we do? Well, we have a really big opportunity here.
I don't want to make light of the fact that
her prognosis is grim, but that kind of a prognosis

(43:11):
does lead to planning opportunities for people who didn't plan before.
What do I mean Usually pancreatic cancer doesn't mean she's
not competent.

Speaker 3 (43:23):
No, she's definitely still competent.

Speaker 4 (43:25):
Yeah, So it's just as the mental part is completely fine.
So what I would do is bring them in. They
would need to learn now how we're going to change
to irrevocable trust planning, Okay, And I would probably suggest
that is it a million dollars? So they have two
million in assets. One million is in the home. So

(43:46):
I definitely want to put the home into the wife's right.
The wife's name, she's the one in the pancreatic cancer. Yes,
put it in her name one hundred percent. We're going
to get there, so one hundred percent to wife. Then
I would probably say that two million in assets, so

(44:06):
six hundred thousand of non IRA, I'd probably put that
in wife's name. So now wife has one point six
and she's got a two hundred thousand dollars IRA. Yes,
so wife has one point eight The IRA has to
stay in her name, but the other items need to
be retitled one hundred percent to the wife, which there's

(44:30):
no gift tax there because they're married individually, her name individually,
no trust, her name individually. And then the IRA we
have to change the beneficiary to be the estate of her. Okay,
So now we've got a total of one point eight
million that's going to be included when she dies for

(44:53):
estate tax purposes, and it will be sheltered for a
state tax purposes. But there's a whole lot of other
benefits and only one negative that comes from this, and
I'm gonna explain that in just a minute, but I
want to mention it's the end of the month, folks,
it's the last chance to get this guide learn how
to deal with like we are going to learn here
how to deal with her IRA. His IRA and any

(45:16):
life insurance when you're trying to do both estate tax
planning nursing home protection at the same time. By getting this,
it's going to understand help you understand the testamentary trust
and how that works with these two items, and all
the while will reduce your estate taxes and not cause

(45:37):
any adverse income tax consequences. So a lot of issues
going on with this guide, but it's super helpful in
your planning. Call and get it. End of the Month
eight six six eight four eight five six nine nine
or Legal Exchange Show dot com again eight six six
eight four eight five six nine nine or Legal Exchange

(45:59):
Show dot com. It is the end of the month, folks.

Speaker 2 (46:02):
I forgot to mention Todd when you when I was
laying out this case for you. They she also has
some life insurance. It's not a big amount, I want
to say, it's like one seventy five.

Speaker 3 (46:11):
It's definitely less than two hundred.

Speaker 4 (46:12):
Thousand, and that's fine. What we can address that in there.
So that's going to bring her a pretty darn close
to the two million dollars store in her estate. Let's
just call it, you know, one fifty. That puts her
at one million, nine fifty.

Speaker 3 (46:23):
Yeah.

Speaker 4 (46:24):
So so now what I would by the way that
life insurance, we would also have to change the designated
beneficiary to be the estate of her. Okay, so now
I've got two items, the IRA and the life insurance
designated beneficiary estate of Be mindful folks when we're when
you're thinking about doing this. The life insurance, no problem,

(46:47):
doesn't matter, any age, doesn't matter, any nothing. You can
just name the estate the beneficiary. However, the IRA, you
do need to look at their age before you do this,
and in this case, you have to be at least
seventy three years of age, which is the required beginning
day to take minimum withdrawals. If you are, then it's

(47:09):
okay to name the estate the beneficiary. Here we can
we're above seventy five and seventy four. Mindful that if
you don't, if you're not at that age and I
before reaching that age, then the minimum distributions coming out
will be over five years.

Speaker 3 (47:31):
Yeah, so you're gonna be really careful with that you do.

Speaker 4 (47:33):
But also I'm gonna throw another caveat out there. There's
only a two hundred thousand dollars IRA here, So two
hundred thousand over five years is not really going to
cause a huge income tax problem.

Speaker 3 (47:44):
But if you have a million dollar IRI or a
two million dollar IRA, I'm.

Speaker 4 (47:48):
Going to add that caveat to this. I say, you
should at least be seventy three years of age before
you do this. But if your IRA is not too
large and the five year payout is not going to
cause a huge income tax problem, well then you can
do it at any age. Yeah, So keep that in mind.
And there's probably a lot of people that have, you know,
five hundred thousand or less, four hundred thousand or less

(48:10):
in their IRA, and it might not be such a
big deal if you're pulling that out over five years.
All right, So now we got this all set up
the way we want it. Now you're saying, okay, Todd,
I understand the IRA piece and the life insurance piece.
By putting it in there, it's going to go to probate.
And by the way, everything here is going to go
to probate.

Speaker 3 (48:29):
Well that doesn't sound enjoyable, right.

Speaker 4 (48:31):
Normally it's just the IRA and life insurance, very simple,
it's one item. But I'm thinking about putting everything in
here for a purpose. So yes, I'm going to have
a probate issue, but I'm going to shelter these assets.
So remember the assets are now going to go where
all the assets, not just the IRA, but the home
in the six hundred thousand, are going to flow into

(48:53):
this testamentary trust, which we're creating because she's competent. We
created a new will after we move everything into her name,
and the new will has a testamentary trust built in
with a marital share and a remainder share to take
care of the spouse and shelter the assets for state
tax purposes. Okay, Todd, that's great. You're gonna have one
point nine million dollars. It's going to flow into probate,

(49:15):
it's going to flow into this testamentary trust, and it's
going to end up in the what remainder share of
this testamentary trust because we're allowed to shelter up to
two million dollars for a state taxes, So it's going
to sit in the remainder share subject to a state
tax on the first death under two million, no tax
do and never to be estate taxed again when the

(49:37):
survivor dies. So now we've completely eliminated a state taxes
federal and state. Yeah, we got a little probate issue.
What else do we have, Well, we have all these
assets sitting in a trust better than the regular member.
Our income only medicaid trust that you do in advance.
You can only get income, not principle. Now all of

(49:59):
this is available to the surviving spouse, both income and principle.
So you have the surviving spouse has now more access
to the asset than they had before. It's sheltered for
a state taxes. And if the surviving spouse who's now
seventy five gets sick the next day, no five year

(50:19):
waiting period. Everything in there is protected from the nursing home.
And that's better than starting a seventy five year old
off with a five year waiting period. Excellent, folks. I'm
going to do probate every day if I get all
those benefits. Learn how at least to deal with IRA
and life insurance in a similar way by getting the guide.
It's the end of the month, folks eight six six
eight four eight five six nine to nine or Legal

(50:42):
Exchange show dot com.

Speaker 2 (50:44):
Todd Lutski from the law firm of Cushing and Dolan,
thank you so much.

Speaker 4 (50:47):
Always a pleasure. Susan thank you.

Speaker 2 (50:49):
I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
We thank you for joining us today and we'll be
back again next week on the Legal Exchange with Todd Lutski.

Speaker 1 (51:00):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices
and the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate

(51:22):
is the beneficiary of your IRA or life insurance can
at a layer of tax efficiency and nursing home protection
while still allowing your spouse access when it matters. It's
about keeping more of what you've built, working for your
loved ones now and in the years to come. Get
you a free copy today by calling eight six six
eight four eight five six nine nine. That's eight six
six eight four eight five six nine nine, or you

(51:45):
can request it online from our website Legal Exchange showed
dot com. The proceeding was paid for and The views
expressed are solely those of Cushing and Dolan. Cushing and
Dolan and Ormstrong Advisory may contact you offering legal or
investment services. Cushing and Dolan and Armstrong Advisory do not
endorse each other and are not affiliated HI.

Speaker 8 (52:00):
This is Mike Armstrong from the Armstrong Advisory Group. One
of the biggest risks to retirement isn't just market volatility,
it's longevity. People are living twenty five to thirty years
after they stop working, and that gives inflation plenty of
time to work against you. At just three percent inflation,
your expense is double in about twenty three years. Add
to that the fact that healthcare costs typically rise faster
than general inflation, and your later years could be your

(52:22):
most expensive. Without a plan, that combination can put real
pressure on your savings. That's why we've put together a
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and strategies that may help you make your money last
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four zero zero one to get your free copy today

(52:42):
eight hundred three to nine three four zero zero one
or you can request it online at Armstrong Advisory dot com.

Speaker 1 (52:48):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong make contact you to offer investment
advisory services.

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Mark talks often about how serving his country was one

(53:21):
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(53:43):
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Speaker 6 (54:00):
And