Estate planning for second marriages

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 (00:37):
Welcome into legal Exchange with Todd Lutsky. I'm Susan Powers,
a financial advice 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. Welcome Todd.
How are you today? I am never better in you?
I am great? Thank you. What do you have for
us this week? Couple of things. We're going to go

(00:58):
to Missouri.

Speaker 3 (00:59):
We have an a hell at court case there unfortunately,
a classic UNDO influenced case. You're going to see how
an individual dies after being in poor health but widowed
three kids and two grandkids and three step kids through
a third marriage.

Speaker 2 (01:15):
Yeah, well, not a lot of planning done.

Speaker 3 (01:17):
And you're going to see what the step kids do
when they get involved in this, because he ends up
moving in with the step kids. So my question is
where the heck are the kids? But anyways, uh, not
a lot of planning was done. And by the time
you get to a third marriage, what are we thinking?
Why aren't we doing some planning, folks? And you're going
to see.

Speaker 2 (01:34):
How this how this plays out.

Speaker 3 (01:37):
And then I have just a real life story that
just basically is really a great case that shows how
planning can accomplish so many things. This is going to
involve an individual who I had done planning for before,
had you know, she was single at the time, had kids,
and then now comes in with her new soon to
be new husband and they're gonna get married. Well that's great,

(01:59):
Now we just need to play right. That's a very
important reason to plan because now they're going to be
sharing a house.

Speaker 2 (02:05):
He's got a kid, she's got two kids.

Speaker 3 (02:06):
We want to make sure everybody's taken care of, not
only him and her, but the kids from both sides
of the marriage, right, and how are we going to
do all this? And what are his assets and what
are her assets? And wow, the game changes and folks,
that's really what this guide is all about. We are
at the end of the month. This is the last
chance to get it. You know, you think you've done

(02:26):
your planning right. Well, there's potholes to avoid. I'm getting remarried,
I've got divorced, I'm moving, changing residencies, I've got kids
that now are problem children. Folks, there's potholes to avoid.
Learn if you've done your planning, what you might need
to do to rethink your plan and certainly not looking
at it for fifteen years as a pothole. And for

(02:49):
all you folks that haven't done planning, this is going
to help you avoid things that you might incur in
the beginning of planning, like I'm going to rely on
my will or just my nominee realty trust folks. This
guide's got a little something for everyone. It's the end
of the month, last chance to get it. Eight six
six eight four eight five six nine nine or legal

(03:12):
exchange show dot com again eight six six eight four
eight five six nine nine or legal exchange show dot com.
You can download it there. Let's take a peek. Missouri
Tom eighty five years old, in poor health. He's a widower.

(03:32):
He has three kids, two grandkids, and three step kids
from the third wife, doesn't matter how many. There's Janine,
Darien and Amanda. In twenty twenty September, Tom moved into
Jane's house, so that's a step kid, just to keep

(03:52):
the players right. After his home was damaged by fire, Amanda,
who hapn't had COVID at the time, decided to take
him to a bank to open up a joint bank account,
where Tom quickly deposited the insurance money from the fire
into the joint bank account.

Speaker 2 (04:09):
Amanda's his daughter or the stepdaughter.

Speaker 3 (04:11):
Stepdaughter, another step daughter, so Janine, Darian and Amanda. Amanda's
one of the step children, and she takes him there
and they deposit the money into this joint bank account,
who Amanda promptly uses for her own personal use because
it's in a joint account. Tom of course then gets
COVID to boot, so that wasn't helpful. Now, Janey Janey

(04:38):
again is another the same step One of the step
children arranges for Tom to meet a lawyer draft deeds
to transfer property to all the step kids. The step
kids are always present at all the meetings. The attorney
had to explain the estate plan several times to Tom,
who seemed a little confused, asking questions like, when I'm

(05:01):
signing the power of attorney, am I actually signing the will?

Speaker 1 (05:05):
Now?

Speaker 3 (05:06):
I don't know if that means you're not competent. I mean,
you're signing so many papers in front of you can't
tell which one is the difference between the will and
a power of attorney. So I'm not overly concerned with that.

Speaker 2 (05:15):
Comment, but maybe it gives you a little pause.

Speaker 3 (05:19):
I mean, there seems to be a lot going on,
and the step kids are there, they're taking them to
the lawyer, they're drafting the documents, They're involved in every meeting.
And during that same day when they were signing everything,
some of the blood grandchildren wanted to come visit him,
and they turned him away. Tom dies two days after

(05:39):
signing the deeds. Barbara, Tom's daughter, who knew nothing about
these meetings but was named personal representative, decides to file
a claim of undue influence shocker and wants to set
aside the deeds because they're invalid, and claims conversion for
unjustly enriching themselves. Circuit court agreed on both counts.

Speaker 2 (06:03):
Well.

Speaker 3 (06:04):
The stepkids, even though they seemingly don't have a case,
decided to appeal, and the step kids argued that wait
a minute. Now, you have to show that you destroyed
the individual's free will and the insurance money anyway, belonged
to the insurance company first, that didn't belong to Tom.
And when Tom deposited the insurance money into the joint

(06:26):
bank account, he's the one that converted it to joint ownership.

Speaker 2 (06:30):
So there you go, a bit of a stretch, I hope.

Speaker 1 (06:35):
Yeah.

Speaker 3 (06:35):
The court affirmed the prior court's decision and said, wait
a minute, you, first of all, don't need to destroy
someone's free will, as your actions clearly thwarted his free will,
and that's really all that's really required here. And as
to those other arguments, they're just nonsensical, right, they're just
not even worth addressing. So at this point, yes, the

(07:00):
step kids are are out, you know, wipe your brow here, though, right,
this is all because no planning was done. But just
take a quick look. I mean, undue influence is clear here, right,
I mean, it's it's classic. And the step kids took
them to the attorney. They kept the other family members away. Yep,

(07:22):
they attended the meetings. They ended up with way more
stuff than the other family members. I mean, that's just
clearly undue influence the attorney. You know, you know, keep
this in mind when you're an attorney, look out for
this stuff. You know, try to remind the kids that,
you know, you want something to work, it's not going

(07:43):
to work if you have undue influence. And so that
leads me to a real life story that I'm working
on right now. It's an existing client. He's got a business.
He's got one son who's been involved in the business
over the years, and we now are in the process
of trying to get some shares over to the one son.
But he had a family attorney for many years who

(08:04):
I'm working with, which is fine. And day got together
and as his health is declining to be still very competent,
he decided that it's okay to put this daughter on
as trustee on a revocable trust just to help.

Speaker 2 (08:17):
So he decided I'll let my daughter be trustee.

Speaker 3 (08:21):
Well, now we need these shares and power of attorney
as well, and we need these shares moved, and we
need some work done. And next thing you know, you're
getting these emails from this daughter saying, wait a minute,
I'm the power of attorney, I'm the trustee, and every
decision needs to be You can't make decisions without talking
to me. Everything needs to be run by me. And

(08:41):
I'm like, ohh, she's getting a little up at you here.
And the next thing I noticed is that we explained
that we need to do with the stocks and everything
because we need her to sign because she's trustee. We
get this big long link the email saying well, if
we're going to do that, we need to change the
operating agreement. There needs to be checks and balances put
in there. There needs to be power for us. Remember,
these are kids that never worked in the business, right

(09:03):
and the father still wanted to give this. There was
a seventy thirty split right now, So the kid that
runs a business is thirty and when they die, he's
going to end up with fifty one percent, which is fair, yep.
And they're going to get stuff. So it's not like
they're not getting stuff. And then I get this email
and I'm like, wait a minute, you know, and you
have to tell these kids right, first of all, you're

(09:25):
nothing right now, he's competent. He can, you know, change
his mind, change his mind. So this is this is
not good for you. And by the way, you're involved
in getting a lot of stuff here. And if you
start making these changes the way you're putting these engage
these emails together, that's classic undue influence. If you heard
this case, that's classic undue influence. I said, if you

(09:48):
really want this to work, it won't work because of
your actions. Your actions will bring an undue influence claim.
So basically we just have to say just removers trustee
and put yourself back gone and just move on. And
it's the only way you can get it done. But folks,
you have to remind people do your planning, avoid these
potholes that happen with no planning, amongst other things.

Speaker 2 (10:10):
Get the guide.

Speaker 3 (10:11):
It's the end of the month, last chance to get
at eight six six eight four eight five six nine
nine or Legal Exchange show dot com.

Speaker 2 (10:20):
You've been listening to Todd Lutski, a partner with the
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor the Armstrong Advisory Group. We've got much more
to come when we return to the Legal Exchange with
Todd Lutsky.

Speaker 1 (10:35):
Creating an estate plan can be a difficult process if
you aren't working with an expert who can make sure
your plan is secure. Cushing and Dolan can help. Call
them today at eight six six eight four eight five
six ninety nine. Estate planning is their business, and their
new monthly guide is called Detour a head estate planning
blunders to avoid. Don't put your assets at risk and
open yourself up to severe tax consequences. Even if you

(10:57):
already have a plan, this guide may correct an issue
that could come back to haunt you in the years
to come. Proper estate planning is crucial to you being
able to enjoy your later years, and it may be
the difference between retiring comfortably or living under incredible financial pressure.
Call Cushing and Dolan right now at eight sixty six
eight four eight five six ninet nine and get your
free guide today. That's eight six six eight four eight

(11:20):
five six nine nine, or request an online from their website.
Legal exchange show dot com. The proceeding was paid for
and the views expressed are solely those of Cushing and Dolin.
Cushing and Dolin and or Armstrong Advisory may contact your
offering legal or investment services. Cushing and Armstrong do not
endorse each other and are not affiliated.

Speaker 4 (11:35):
Trust can play a key role in your financial strategy,
and understanding the different kinds and their purpose may help
you make the right decisions for your overall plan. Hi,
this is Chuck Zada from the Armstrong Advisory Group. Trusts
are utilized for a variety of reasons, but the most
basic use is to make settling in a state easier.
Trust have the ability to bypass probate, which can save
you significant time and money while allowing your assets to

(11:57):
be distributed directly to your beneficiaries. New guide this month
is called Trusts in your Financial Plan and you can
get it by calling eight hundred three nine three for
zero zero one. Learn about trust and their possible benefits
to your financial strategy by requesting your free guide today.
That number again is eight hundred three nine three for
zero zero one, or request it online at Armstrong Advisory

(12:19):
dot com. That's Armstrong Advisory dot com.

Speaker 1 (12:21):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong Guide 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.
The United States Virgin Islands has consistently voted one of
the Topcribbean destinations, and recently two of their beaches Trunk

(12:43):
Bay and Saint John and Magan's Bay and Saint Thomas.
We're voted at top ten best beach in the Caribbean
at the twenty twenty five Travelers Choice Best of the
Best awards. From the pristine beaches to its world class dining,
rich history, incredible golf and perfect weather, the USVII has
everything you need to make memories that will last a lifetime.
From the moment you arrive, you will fall naturally in

(13:05):
rhythm with the heartbeat of the islands. There's no money
to exchange, and travel from New England could not be easier.
Whether you're looking for a romantic getaway or a family vacation,
the US Virgin Islands is the perfect place for your
next adventure. Go to visit USVII dot com right now
for more information and to book your trip. The USVII
is Americas Caribbean Paradise. Go to visit USVII dot com today.

(13:31):
That's visit USVII dot com. 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. That's eight six six
eight four eight five six ninety nine.

Speaker 2 (13:53):
Welcome back into the Legal Exchange with Todd Latsky. I'm
Susan Powers, a financial advisor with the Armstrong Advisory Group.
I'm joined by Todd Letsky, a partner with the law
firm of Cushing and Dolan with a master's in taxation.
Where are we headed now, Todd? Nowhere, We're staying right here.

Speaker 3 (14:09):
Real life story time excellent. I mean, these are the
stuff that I really love, I really enjoy when I
have stuff that I can actually just tell you is
really happening. Well, these other things are all really happening,
They're just not my cases. So it shows you how
planning can really accomplish a lot.

Speaker 2 (14:25):
Right.

Speaker 3 (14:26):
So, existing client been my client for years, married, was
married but not married when I became, when we became
a client attorney. Client relationship, had some kids on her own,
comes back in years later. Again again one of the
planning potholes, right, rethink your plan when to come back
in and look things over. She came back in and

(14:48):
she has, you know, got the two kids. But she
brings her soon to be new husband. Okay, great, you
know I they want to do separate planning though he's
got his own plan. Yeah, doesn't need to use me,
and she wants to continue to work with me, which's fine.
And she's got the two kids and he has one child.

(15:09):
Now he doesn't have nothing. He has a condo that
he's renting and he's got some money, so he's he's
self sufficient. She has a nice, you know house on
the cape where it's about one point four ish and
you know, about seven hundred in an era. And the

(15:29):
question now becomes, how do we take care of the
new spouse and the kids from her side of the marriage.
And she's got a lot of other concerns that start
coming out. You know, remember note right now they live
together in her house. He's renting his condo, but it's there. Also,

(15:51):
she has one daughter who she wants to be able
to live in the house forever, okay, but then doesn't
want her one son to have to wait forever to
get something. So I'm like, well, that's a complication, you know,
and really wants to protect the spouse as well, you know,
for her husband in that relationship. And then she wants

(16:14):
to make sure she protects this home from her daughter's
rocky relation, rocky marriage. And she also doesn't want her
daughter if they get divorced, moving in with some new deadbeat. Like, well,
those are a lot of restrictions and you might not
be able to accomplish everything, but you know, we have

(16:35):
lots going on here, and but I think I.

Speaker 2 (16:38):
Think we can do that.

Speaker 3 (16:40):
But but folks, that's my point about this guide, right,
there are so many potholes outside of taxes and probate.
There's bloodline planning, there's things to think about, Like here,
someone who did this right. If you get this guide,
last chance to get it. People like this who have remarried,

(17:00):
maybe are getting divorced, maybe are moving residencies, got family
dynamics that are changing. There are reasons look at your plan.
If you haven't looked at it, you this guide is
for you, For you folks who haven't done a plan
or been on the fence thinking your wills enough or
your nomine realty trust is enough. Or I'm single and
I don't have to do planning, or I don't have

(17:20):
kids and I don't have to do planning. I mean, folks,
there are reasons for you to get this guide to
avoid potholes before you do your planning. It's the end
of the month, last chance to get it. 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 Show dot com.

(17:44):
Now what do we learn from this? We learned that
through planning we can accomplish almost everything she wants. So
let's let's begin first tax planning combine. These folks are
close to the four million, but each other. They're not
really over. She's pushing close to the two million, and

(18:05):
he's close to the two million. So are we going
to be able to do tax planning? Even though they're
working with another attorney?

Speaker 2 (18:11):
Right? How do you do that? Two separate trusts.

Speaker 3 (18:13):
Yeah, this can still work, right as long as on
the death of the first spouse, you don't have to
have a marital share and a remainder share. You can
just have everything held in trust a little bit for
the benefit of the spouse but doesn't come out and
for the benefit of her kids. That's like one giant
remainder share. So the only downside of not having the

(18:37):
marital share is if she is slightly over the two million,
there will be some tax due. But again, if she's
a two point paid upon her passing right, got it.
If she's under two million, no problem. If she's slightly
over two million, say at two point one or two
point two, you got to pay tax on two hundred grand,

(18:57):
So what it's ten percent of two hundred grand. I'm
not overly upset about that. On his side, he's going
to have a similar trust, probably taking care of her
in some way and his kids. Again, a giant remainder share.
And so unless he's over two million, there won't be
any tax when he dies. And since those assets will

(19:18):
never be included in her estate, we've done our estate
planning and vice versa, her assets will not be included
in his estate. So we've done our estate planning, so yes,
first and foremost, we can accomplish tax planning.

Speaker 2 (19:32):
Next.

Speaker 3 (19:32):
Nursing homes. Yeah, that's a problem. They're not concerned about
it though, they said, we've got enough money. We're not
really worried about overall nursing home situations.

Speaker 2 (19:41):
Now.

Speaker 3 (19:41):
Remember they are living together, so this could be an issue.
But they're married, so they did take the step to
get married, So there's some benefits to being married from
a nursing home perspective, even without planning. If that is
their primary residence on the cape, and either one of

(20:03):
them gets sick, the primary residence for a healthy spouse,
if they're living there and it's located in Massachusetts, regardless
of its value, not countable, not leanable, which is in
her case, the biggest asset. Now he gets sick, of
course his condo would be at risk, but he's renting it,

(20:26):
so it would be non countable but leanable still helpful.

Speaker 2 (20:30):
So for the primary doesn't matter. If he's not on
the deed, it's still his primary. It does not matter. Yeah,
if you're right.

Speaker 3 (20:37):
If he's not on the deed, it doesn't, But it
matters from an if you own and use it when
you sell it for your capital great sax exclusion. But
and even then it doesn't if you're married, the owning
part doesn't matter. Just the use part matters, because I remember
a lot of times one spouse might own a house,
right and the other one might not. So but yeah, no,
not for not for the nursing home purposes. So I

(20:59):
think they're going to be okay there. And they didn't
really want to do nursing home planning. They said they
have enough money.

Speaker 2 (21:04):
So what about the families? Well, next is the beneficiaries,
and you're right, that's where we go.

Speaker 5 (21:08):
Now.

Speaker 2 (21:08):
You know you want to take care of the husband,
yes we can. What do we do?

Speaker 3 (21:11):
So we ended up putting language in here that says
and again, she had a lot of issues up there.
She wants to take care of her husband. She doesn't
want to make her son wait forever, right, but she
wants to protect the assets for her daughter, the house,
and she wants her daughter to live there. But she
doesn't want some deadbeat person new boyfriend moving in and

(21:32):
all these restricts.

Speaker 2 (21:33):
She wants to control from the grave a lot.

Speaker 3 (21:36):
We can get their ninety percent. We put language in
there that says the house stays in trust for one
year for the husband to live there, provided he pays
all the bills, maintenance, upkeep. But she said, well, I
don't even want that. So what if my son wants
to sell the house within one year?

Speaker 2 (21:54):
Okay?

Speaker 3 (21:54):
If the son wants to sell the house within a year,
then the son must give ninety days notice in writing
to the husband to get out. Ninety days is enough,
the husband said, because I got a condo, I could
just and the tendency move into my condo and I'm
all set.

Speaker 2 (22:12):
Okay.

Speaker 3 (22:12):
Husband was fine with that. Okay, that works great, and
so now we've covered that. But if we get beyond
the one year and they haven't sold it, well, now
it goes equally to the kids. Well, now I want
my daughter to live there. Well, I don't want my
son to wait forever. So I put our real estate
language in there. I said, look, they have you know,

(22:33):
do you both want it?

Speaker 1 (22:34):
No?

Speaker 3 (22:35):
Okay, If you don't both want it, the one who
wants it, the daughter, can buy out the interests of
the sun and then hold it in trust so that
in case she gets divorced, it's at least protected from
the current divorcing marriage, and it's protected from future creditors
and for the grandkids and everything else. I told her,
But the and your son would have gotten money and

(22:56):
not had to wait a year or however long. And
most importantly, I said, the only thing I can't do
is I can't like draft things up and say, oh,
if you're going to get involved with someone us blue
eyes or green eyes or is bald, you know they can't.
You can't do that. Yeah, right, So I can't necessarily
control who she lets live there, but at least we
can get everything else done. And folks, that's really what

(23:19):
this is about. Do your planning. You can avoid all
the potholes that come with the state. Planning something for
everything in something for each of you. And this guide
last chance to get it eight six' six eight four
eight five six nine to nine Or Legal exchange show dot.

Speaker 2 (23:36):
Com you've been listening To Todd, lutsky a partner with
the law firm Of cushing And. Dolan I'm Susan power
as a financial advisor with The Armstrong Advisory. Group todd
will be answering your listener questions when we return to
The Legal exchange With Todd.

Speaker 1 (23:51):
Lutsky creating an estate plan can be a difficult process
if you aren't working with an expert who can make
sure your planning a Secure cushing And dolan and help
call them today at eight six six eight four eight
five six nine. Nine estate planning is their, business and
their new monthly guide is Called detour a head estate
planning blunders to. Avoid don't put your assets at risk

(24:12):
and open yourself up to severe tax. Consequences even if
you already have a, plan this guide may correct an
issue that could come back to haunt you in the
years to. Come proper estate planning is crucial to you
being able to enjoy your later, years and it may
be the difference between retiring comfortably or living under incredible financial.
Pressure Call cushing And dolan right now at eight sixty
six eight four eight five six ninet nine and get

(24:34):
your free guide today that's eight six six eight four
eight five six nine, nine or request an online from
their Website legal exchange show dot. Com the proceeding was
paid for in the views expressed are solely those Of
cushing And. Dolan cushing And dolan and Or Armstrong advisory
may contact you offering legal or Investment. Services cushing And
armstrong do not endorse each other and are not. AFFILIATED.

Speaker 5 (24:53):
Hi this Is Mike armstrong from The Armstrong Advisory. GROUP
a state and financial planning go hand in, hand and
one of the most common ways to keep that that
bond secure is with a. Trust our new guide Called
trusts In Your Financial plan is available right. Now in,
it we'll discuss the various types of trusts that exist
and how they might benefit your planning. Process trust provide
a number of different protections for your, assets including privacy

(25:14):
control and tax. Efficiency if you're retired or nearing retirement
and have concerns about your financial strategy and whether or
not a trust may, help call us today at eight
hundred three nine three four zero zero one and ask
for your free guide Called trusts and Your Financial. Plan
learn about how a trust could make a difference for
you and your family by calling eight hundred three nine.

Speaker 2 (25:32):
Three four zero zero.

Speaker 5 (25:34):
One that number again is eight hundred three nine three
four zero zero, one or you can request the guide
From Armstrong advisory dot.

Speaker 1 (25:40):
Com 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 The United States Virgin islands has consistently
voted one of the Top caribbean, destinations and recently two

(26:00):
of their, Beaches Trunk bay And Saint john And Magan's
bay And Saint. Thomas we're voted at top ten best
beach in The caribbean at the twenty twenty Five Travelers
Choice best of The best. Awards from the pristine beaches
to its world class, dining rich, history incredible golf and perfect,
weather THE usvii has everything you need to make memories
that will last a. Lifetime from the moment you, arrive

(26:22):
you will fall naturally in rhythm with the heartbeat of the.
Islands there's no money to, exchange and travel From New
england could not be. Easier whether you're looking for a
romantic getaway or a family, vacation THE Us Virgin islands
is the perfect place for your next. Adventure go to
VISIT usvii dot com right now for more information and
to book your. Trip THE usvii Is America's caribbean. Paradise

(26:46):
go to VISIT usvii dot Com, today that's VISIT usvii dot.
Com you're listening to The Legal, exchange and it's time
For Ask, todd the segment Where todd will end answer
your questions about anything and everything that's included in the
estate planning. Process once, again Here's Tod lutsky And Susan.

Speaker 2 (27:08):
Powers welcome, Back. Todd we have a few questions from
listeners for. You first question comes From don And, Harwich
mass And don, writes my wife AND i soon will
be meeting with an attorney to create an estate, plan
likely revocable, trusts as we have plenty of assets as
well as long term care, insurance and we aren't concerned

(27:29):
with the nursing home. Costs that's my. Question is, This
what is the best way to ensure our two children
who do not get, along have a smooth transition of
their inheritance after we. Pass we'd like to protect from future,
divorces but don't want them in charge of each other's. Distributions,
yeah and that makes a lot of.

Speaker 3 (27:49):
Sense and AGAIN i give these folks credit for thinking
about the planning that they want to. Do and it's
beyond probate and TAX i know we spoke about we
speak about that a. Lot but to, me having the
family stay together After i'm gone it's really. IMPORTANT i,

(28:12):
MEAN i will arrest better knowing that they're they're, together
they're helping each. Other you never know what comes, up you,
know after we're. Gone so so first and foremost great great.
Thinking so when you, die in this, case we have
just two, kids, right you can put them both on as.

Speaker 2 (28:32):
TRUSTING i feel like they're.

Speaker 3 (28:34):
Going to want that here because they're going to feel
that if one is trusty and one isn't that somehow
one's got. Power, yeah when the parents. Die when the parents,
die you're. Right let me back. Up so when the parents,
die the trust becomes. Irrevocable so we would do probably
depending on the size of their, state if they're not
over like fifteen, million we'd probably do one trust, okay

(28:55):
and we do the joint, trust and we would then,
say you, know who should be? Trustee why not put
both kids, on just just to just to avoid the
appearance of you, know upsetting one or the.

Speaker 2 (29:13):
OTHER i don't love two, trustees but we'll do.

Speaker 3 (29:15):
It then we'll have language in there that, says you,
know it does require a majority vote to do, things
which is. Fine they're going to agree or nothing's going
to get. Done so there's not going to be any fighting.
There and we're going to create two separate, buckets, okay
and these two separate buckets are independent of each. Other
in other, words they can't ever take reach into one

(29:37):
bucket and take money from another bucket and put it
so they can't steal from each other's, buckets so that's
not even an. Option so that prevents the. Fighting we'll
make sure that the buckets are funded, equally even with real.
Estate we'll put our real estate language in to make sure,
that you, know people get the real estate they want
with no fighting or they sell.

Speaker 1 (29:54):
It so.

Speaker 3 (29:56):
Now i've got the buckets successfully funded, equally AND i
got two kids in.

Speaker 2 (30:01):
Charge.

Speaker 3 (30:02):
Man in, fact you can have them managing and investing
their own, share.

Speaker 2 (30:06):
Not dealing with if you want at.

Speaker 3 (30:08):
All, right so IF i want to buy something in my,
SHARE i don't have to, check you. Know but quite,
frankly having them both work together to invest the assets
is not shouldn't be a big. Problem but they don't
like each, other so maybe they keep it separate and
have separate, shares and we're going to give them each
the power to appoint an independent. Trustee, now why do
we need the independent? Trustee the independent trustee is simply

(30:31):
there for, distributions no other. Purpose, okay ninety nine percent
of the activities are being done by them managing. Investing,
yeah so let's say that that you, Know billy wants
to take money out of his bucket for him or his.
Kids he needs an independent trustee to say yes or

(30:53):
no in the independent trustee sole.

Speaker 2 (30:55):
Discretion so let's say that's you as their. Attorney, Right
so he would call you SAY i need some, Money
you say, yeah your. Nay, Yes i'm allowed to say
yes or.

Speaker 3 (31:03):
No you might say we're you, know we're going on
a family, vacation we're taking, up you, know buying a family,
car kids going to, college, Whatever and THEN i would
say yes or no to, that same with the other.

Speaker 2 (31:14):
Child and the coup.

Speaker 3 (31:16):
De gras really is give them the power to remove
and replace. Me so again they're not pitted against each.
Other and if for some reason one doesn't like, Me i'm.
Out and that way there's no fighting and no, fuss
and that language does exactly what they, want the parents,
wanted which is protected from future, divorces creditors of all,

(31:40):
kind generation skipping tax, benefits getting assets to the grandchildren
tax free if the child doesn't take it during their
life for themselves or their. Grandkids so, yes it can be, done,
Folks like many things can be, done but you got a,
plan and not planning to me is the biggest. Pothole
and the guide is called Avoiding potholes.

Speaker 2 (32:03):
In your estate.

Speaker 3 (32:03):
Planning you, know so you, know if you're if you've
already done your, planning please get. It there might be
things you need to read in here that might trigger
you to amend or update or change your existing. Plan
and for folks who haven't done, it it's going to
give you reasons why you, think if you think you
shouldn't be doing, it why you need to do, it

(32:23):
and things to avoid when doing.

Speaker 2 (32:26):
It so please.

Speaker 3 (32:27):
Call it's the end of the month eight six six
eight four eight five six nine nine Or Legal Exchange
show dot. Com last chance to get it eight six
six eight four eight five six ninety nine Or Legal
Exchange show dot.

Speaker 2 (32:42):
Com our last question comes From maryland In, westboro Mass
And maryland Writes my husband is in his early seventies
and was just diagnosed with. Dementia we have revocable, trusts
but have done nothing to protect from the nursing. Home
we have a. Home he has AN ira worth six
hundred and MY ira is worth around one. Fifty is

(33:03):
there anything we can do now to protect if he
goes into a nursing? Home So i'm going to ask
you some follow up questions just to my clients SO
i know their. Situation oh super.

Speaker 6 (33:14):
So.

Speaker 3 (33:15):
Uh you, know when we look at this, situation we,
say just diagnosed with, dementia do we?

Speaker 2 (33:20):
Do we think we have five?

Speaker 3 (33:22):
Years probably means, YEAH i would say, probably he's still
competent in everything now he's just showing signs of. Forgetfulness
and say call it early. Dementia, yes. Exactly and we asked,
that folks because just be and it's important for everybody.
Listening just because you get the dementia diagnosis doesn't mean
you can't plan. It AND i want that to come

(33:43):
out from this. Meeting it means there are many phases of,
dementia and some progress fast and some.

Speaker 2 (33:51):
Don't he has more lucid moments than not for, Sure SO.

Speaker 3 (33:54):
I would say we definitely need to move the plan.
Along AND i think at this point it's not sort
of frivolous to get the estate planning process, going get
the five year lookback period, running because if he makes
it four, years it'll give us more options than we
would have if we didn't do. It maybe we pay

(34:16):
for a, year maybe we protect a million plus and
we spend one hundred. Grand, Yep i'm, Okay so there's
options to, do so let's get the clock. Started SO
i would, say, yes there's some planning you can.

Speaker 2 (34:29):
Do so they would put their house in there, now
but what do they do about those? Iras that's the
bulk of the, assets and that's really the problem. Here
so you're absolutely, Right.

Speaker 3 (34:37):
Susan we would at least set it up for the,
iras and if the only other assets is THIS, Ira i'm,
sorry the.

Speaker 2 (34:42):
House we would we would then, say at least and
how old are they do we put the they're in
their early, seventies.

Speaker 3 (34:50):
So close to what we call THE, rbd the required beginning. Date,
yes he's which is seventy, three and that means In
english that you have to start to taking your minimum.
Distributions you are mds and so at that point we
would say we can maybe change THE, dB which is
the designated. Beneficiary so you've got the, rmds the rbds

(35:13):
and THE dB the designated beneficiary on these iras as
part of the estate, plan name the. Estate and then
that means inside the wills that we would, do which
are part of the estate, plan we'd put a testamentary.
Trust the testamentary trust is going to allow the asset

(35:35):
from THE ira to flow through. Probate, yeah it's a,
negative but it's not really now the asset from THE.
Ira and this only works if you die and don't
go to a nursing home BECAUSE i can't move it in.

Speaker 2 (35:48):
Advance but that's.

Speaker 3 (35:50):
Okay there's more than a fifty percent chance you're going
to die and not go to a NURSING. Gymp then
those assets will flow into the. Trust they'll be sheltered
for estate, taxes they'll be available for the survive. Spouse
there will be no adverse required minimum distributions because it's
based on the life expectancy of the. Decedent and most,
importantly it's immediately protected from the nursing home for the surviving,

(36:14):
spouse so you get a better chance of saving some
assets for the.

Speaker 2 (36:18):
Kids.

Speaker 3 (36:19):
Folks that is a new, technique but also a. Pothole
if you don't do your, planning you need to learn
how to avoid all the potholes in estate. Planning get the.
Guide it's the end of the month eight six six
eight four eight five six nine to, nine Or Legal
Exchange show dot.

Speaker 2 (36:37):
Com if you have a question you would like to Ask,
todd visit his Website Legal Exchange show dot com and
click on the Ask tod. Tab Maybe i'll be able
to read 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, lutsky a
partner with the law firm Of cushing And. Dolan I'm Susan,

(36:59):
powers a financial advisor with The Armstrong Advisory. Group we'll
be back with more after this quick break on The
Legal exchange With Todd.

Speaker 1 (37:06):
Lutsky creating an estate plan can be a difficult process
if you aren't working with an expert who can make
sure your plan is. Secure cushing And dolan can. Help
call them today at eight six six eight four eight
five six nine. Nine Estate planning is their business and
their new monthly guide is Called detour a head estate
planning blunders to. Avoid don't put your assets at risk

(37:27):
and open yourself up to severe tax. Consequences even if
you already have a, Plan this guide may correct an
issue that could come back to haunt you in the
years to. Come proper estate planning is crucial to you
being able to enjoy your later, years and it may
be the difference between retiring comfortably or living under incredible financial.
Pressure Call cushing And dolan right now at eight sixty
six eight four eight five six ninet nine and get

(37:50):
your free guide today that's eight six six eight four
eight five six ninet, nine or request it online from
their Website legal exchange show dot. Com the proceeding was
paid for In these expressed are solely those Of cushing And.
Dolin cushing And dolan Indor I'm Strong advisory may contact
you're offering legal or investment. Services cushing And armstrong do
not endorse each other and are not.

Speaker 6 (38:08):
Affiliated this Is Michael, valila adjuedent of The Disabled American
Veterans department Of. Massachusetts the dav Of massachusetts has helped
me and countless others adjust to civilian life through a
variety of incredible. Programs through our Local Veterans Assistance, program
we provide necessary services to veterans and their communities such
as food, shopping, landscaping and. Companionship but we need your.

(38:31):
Support you can help by making a donation. Today please
VISIT dav fivek Dot. Boston THAT'S dav fivek Dot.

Speaker 4 (38:38):
Boston trust can play a key role in your financial,
strategy and understanding the different kinds and their purpose may
help you make the right decisions for your overall. Plan,
hi this Is Chuck zauta from The Armstrong Advisory. Group
trusts are utilized for a variety of, reasons but the
most basic use is to make settling in a state.
Easier trust have the ability to bypass, probate which can
save you significant time and money while allowing your assets

(39:00):
to be distributed directly to your. Beneficiaries our new guide
this month is Called trusts in Your Financial plan and
you can get it by calling eight hundred three nine
three for zero zero. One learn about trust and their
possible benefits to your financial strategy by requesting your free guide.
Today that number again is eight hundred three nine three
for zero zero, one or request it online At Armstrong

(39:22):
advisory Dot. Com That's Armstrong advisory Dot.

Speaker 1 (39:25):
Com 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 The United States Virgin islands has consistently
voted one of The topcribbean, destinations and recently two of

(39:46):
their Beaches Trunk bay And Saint john And Magan's bay
And Saint. Thomas we're voted at top ten best beach
in The caribbean at the twenty twenty Five Travelers Choice
best of The best. Awards from the pristine beaches to
its world class, dining rich, history incredible golf and perfect,
weather THE usvii has everything you need to make memories
that will last a. Lifetime from the moment you, arrive

(40:08):
you will fall naturally in rhythm with the heartbeat of the.
Islands there's no money to, exchange and travel From New
england could not be. Easier whether you're looking for a
romantic getaway or a family. Vacation THE Us Virgin islands
is the perfect place for your next. Adventure go to
VISIT usvii dot com right now for more information and
to book your trip THE usvii Is Americas Caribbean. Paradise

(40:32):
go to VISIT usvii dot com. Today that's VISIT usvii dot.
Com 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

(40:53):
eight five six nine, nine or visit him online At
Legal exchange show dot.

Speaker 2 (40:57):
Com welcome back to The Legal exchange With Todd. Letsky
I'm Susan, powers a financial advisor with The Armstrong Advisory,
group And i'm joined of course By Todd, leutski a
partner with the law firm Of cushing And dolan with
A masters in. Taxation So TODD i met with a
client this past week and since our last, meeting they

(41:20):
had their taxes done for twenty twenty four and they
came in new trust last. Year averyvocable trusts from the get. Go,
okay they're living. It, yes, yeah got. It so they
came in and they always bring me a copy of
their tax returns with. Them it's. Nice they brought in
their ten forty AND i, said, great where's your trust tax?
Return and they said.

Speaker 1 (41:42):
What.

Speaker 2 (41:45):
YEAH i want to just let people just have the
conversation because that's one of the, potholes which is not
filing a separate trust tax return during life and after.
Death so let's talk about why needs to be. Done
but FOR i want to include both revocable and irrevocable
trusts and the difference between the. Two that's.

Speaker 3 (42:06):
RIGHT i think you're tax returns so and you're, right
it is a big. POTHOLE i probably haven't mentioned. It
but when one, dies what do you? Do that's a
reason to pick up your plan and come. In don't
just forget about the tax returns that change or what
you have to, do and don't empty everything out of
one trust and put it in another. TRUST i mean
this say is you're bringing up all kinds of things
that make me think about. This, yeah so if it's

(42:32):
irrevocable of an easy start, revocable, yes there's no tax,
returns so no separate tax NO. Sep so if they
have a revocable trust plan and they come to you
for a follow up meeting and you, say where are
my tax, Returns they'll, say, well we don't need to
file one because it's. Revocable it's just our ten forty
here the nifile.

Speaker 2 (42:49):
Taxes you're still paying the taxes on, it but not
a separate tax.

Speaker 3 (42:53):
Return so they would give you the ten, forty they
wouldn't give you a ten forty, one which is a
tax return for a.

Speaker 2 (42:58):
Trust.

Speaker 3 (42:59):
Correct, Okay so if it's, irrevocable and it's even confusing
for accountants sometimes when they when they see these, things they, go,
well if it's a grand tour, trust which means the
ownership for income tax purposes is the individual for income tax,
purposes not for anything, else it's still owned by the.

(43:20):
Trust and so, well then if it's taxed on the
individual's income tax return because they're considered the owners for
income tax purposes and not at the trust, level which
is good because trust level levels are very. High they
pay top, tax you pay like thirty nine, whatever the
top rate is thirty seven, percent like fifteen.

Speaker 2 (43:40):
Grand you're in the top tax.

Speaker 3 (43:42):
Somewhere around fourteen fifteen. Grand you're in the tox top.
Bracket so we don't want to pay. That we want
it taxed at the individual's. Level so oftentimes even accountants will, say, well,
okay well it's a grand to our, trust why DO
i need to. File, well when we do medicate irrevocable trust,
planning generally the trustee and the donor are separate, People

(44:03):
so that's a reason to file in and of. Itself
but more, importantly we get a TAX id number for the,
trust because one when you're applying For, medicaid helps them
understand that this really isn't a, sham it's a real. Entity,
look they're filing a tax, return they have AN id,
number and it really. Helps but ultimately you're, right it
does get picked up on the individual's personal, return but

(44:25):
you should file a ten forty one income tax return
for the entity just to kick out a letter showing
that all of this gets picked up on the personal
return of the individual creator donor of the.

Speaker 2 (44:39):
Trust in that grand tour, letter that's like a ten
ninety nine that your trusteh get issues to.

Speaker 3 (44:44):
You on your personal or like A k one that people,
yeah think about it in terms of like, That, yeah, similar.

Speaker 2 (44:50):
So that kicks, off but you still do need to
go through the process the steps of having that tax
return in place where it's a MEDICARE i, Agree, yeah,
MEDICAID i absolutely.

Speaker 3 (45:01):
Agree and you know, what, folks it is the end
of the, month And susan just brought up one of
the bigger potholes THAT i don't even. Mention, right you
have your existing estate plan in, place someone dies and
tax returns change because someone. Died don't empty a trust
and give it all to the surviving spouse's. Trust horrible.
Idea you can't do it, anyway but don't do. It
people do. It there's lots of mistakes that can be

(45:23):
made during, life between, divorces, relocating. Deaths deaths are a
big reason to relook at your. Plan, also for all
you folks that haven't done, planning please don't not do.
It there's reasons in here to tell you why you
should do it and things to avoid when doing your.
Planning so it's the end of the, Month please call
and get the guide eight six six eight four eight

(45:47):
five six nine nine Or Legal exchange show dot. COM
i think there's a little something in here for everybody
eight six six eight four eight five six nine nine
Or Legal exchange show dot.

Speaker 2 (46:00):
COM i think right up there with relying on a
will as your only a state planning document is also
the folks that, say, OH i have a, will my
attorney prepared that for, me who happens to be a
real estate. Attorney so at the same, time they created
A nominee reality trust for my, house SO i don't

(46:22):
have to worry about. ANYTHING i. Trust i've got the
will and the trust really and The nominee reality. Trust
so or they might just say a, trust, yeah they
think it's, Yeah so let's talk about A nominee reality
trust and not relying on that for your estate plan
because it's not really a.

Speaker 3 (46:37):
Trust, yeah it's really, not and it is so, confusing
AND i wish you, know we don't use them much,
anymore but for, many many years here In massachusetts, anyway
we would use these things Called nominee realty. Trust or
you might just see the word realty trust that you
leave off the word, nominee but it is one.

Speaker 2 (46:55):
Anyway you could say one two Three School street reality.
Trust it's usually a property good.

Speaker 3 (47:00):
Susan it's usually a tied to some. Address and so
if you're now flipping, through go pull your estate plan
of off the shelf and take a look at and
and you, know oh, YEAH i got one of. Those
take a look at. It and now you'll you'll realize
why this is not a. Trust you'll see that you're

(47:22):
probably listed as the, trustees and then you're not going
to realize. It but there's language in there in the
document that says as, trustees you, guys let's, say, husband,
wife you guys have no power as trustee to deal
with the assets that are in the trust without direction

(47:47):
from the, beneficiaries from all the. Beneficiaries, yeah that seems, strange,
right because that puts the power in the hands of who.

Speaker 2 (47:57):
The, beneficiaries which don't get it till you. Die.

Speaker 3 (48:00):
Right, well that's exactly what real trusts provide FOR i
call them a true trust if you. Will this is
not a true, trust it's a realty. Trust and that
language alone sort of vests control of the asset in
the beneficiaries'. Hands not only does it vest control of

(48:23):
the assets in the beneficiaries', hands they're really deemed the
owner right, now not at. Death and that's the confusing.
Part it's like you put it in the trust and
then it automatically flows through to who's listed on the
schedule of.

Speaker 2 (48:42):
Beneficiaries so if there are parents who are listening right,
now we're, thinking wait a, minute are you telling me
that my kids own our? House now if they're listed
as the, beneficiary.

Speaker 3 (48:54):
It could be, so and that's really. Scary so please
look at your, trust your nominee realty, trust and so
that's what we're talking, about and see if in fact
you put that on. There now there's some less bad
result that you might. Have the less bad result is
you might look there and, say, oh husband and wife are.
Beneficiaries oh, well that's. Different so if if you put

(49:18):
it in a nominee realty trust and the husband and
wife are listed as the, beneficiaries then it went from
both of you, yep back to both of.

Speaker 2 (49:26):
You, Right so you've done nothing, nothing so real probate,
avoidance there's no estate that there's no there'd be no
benefits that state tax planning.

Speaker 3 (49:35):
Benefits it's almost like you still own it jointly because
it's just going to go right back to you and
then when one, dies it'll probably go to the. Other
one and and so at least it's less. Bad you
didn't give it, away.

Speaker 2 (49:45):
Right your kids don't own, It you still own, it
you control, it accomplish, anything but.

Speaker 3 (49:49):
Really doesn't accomplish much it certainly everybody says it protect from. Creditors,
no it really. Doesn't you're the owner and you can't hide.
Today in today's, world there's no. Hiding so you know
that that to me is a. Problem but if it,
did say, kids bigger.

Speaker 2 (50:05):
Problem.

Speaker 3 (50:06):
YEAH i mean you might not realize it now and
you might, not you, know living your life just. Fine but,
folks if they get, divorced you're gonna find out really
quickly who owns that property because they're gonna.

Speaker 2 (50:17):
Look, yeah and you don't want.

Speaker 1 (50:19):
That.

Speaker 3 (50:19):
Folks there's so many potholes to avoid in the estate planning,
world not only from. Taxes but it's the last chance.
Ever get the guide avoid all of the potholes from
planning to post planning eight six six eight four eight
five six nine, nine or go to our Website legal

(50:39):
Exchange show dot com and download it right.

Speaker 2 (50:42):
There Todd letsky from the law firm Of cushing And,
dolan thank you so. Much thank, You susan it's always a.
Pleasure I'm Susan power as 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 lutsky in The.

Speaker 1 (51:00):
State plan can be a difficult process if you aren't
working with an expert who can make sure your plan is.
Secure cushing And dolan can. Help call them today at
eight sixty six eight four eight five six nine. Nine
estate planning is their, business and their new monthly guide
is Called detour a head estate planning blunders to. Avoid
don't put your assets at risk and open yourself up
to severe tax. Consequences even if you already have a,

(51:23):
plan this guide may correct an issue that could come
back to haunt you in the years to. Come proper
estate planning is crucial to you being able to enjoy
your later, years and it may be the difference between
retiring comfortably or living under incredible financial. Pressure Call cushing
And dolan right now at eight sixty six eight four
eight five six ninet nine and get your free guide.
Today that's eight six six eight four eight five six nine,

(51:46):
nine or request an online from their. Website legal exchange
show Dot. Com the proceeding is paid for In the
views expressed are solely those Of cushing And. Dolan cushing
And dolan ind Or Armstrong advisory may contact your offering
legal or investment. Services cushing And armstrong do not endorse
each other and are not AFFILIATE.

Speaker 5 (52:00):
Hi this Is Mike armstrong from The Armstrong Advisory. GROUP
a state and financial plan and go hand in, hand
and one of the most common ways to keep that
bond secure is with a. Trust our new guide Called
trusts in Your Financial plan is available right. Now in,
it we'll discuss the various types of trusts that exist
and how they might benefit your planning. Process trust provide
a number of different protections for your, assets including privacy

(52:21):
control and tax. Efficiency if you're retired or nearing retirement
and have concerns about your financial strategy and whether or
not a trust may, help call us today at eight
hundred three nine three four zero zero one and ask
for your free guide Called trusts and Your Financial. Plan
learn about how a trust could make a difference for
you and your family by calling eight hundred three nine
three four zero zero. One that number again is eight

(52:42):
hundred three nine three four zero zero, one or you
can request the guide From Armstrong advisory Dot.

Speaker 1 (52:47):
Com 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. Service The United States Virgin islands has consistently
voted one of The topcribbean, destinations and recently two of their,

(53:07):
Beaches Trunk bay And Saint john And Magan's bay And Saint,
thomas were voted at top ten best beach in The
caribbean at the twenty twenty Five Travelers Choice best of
The best. Awards from the pristine beaches to its world class,
dining rich, history incredible golf and perfect, weather THE usvii
has everything you need to make memories that will last a.
Lifetime from the moment you, arrive you will fall naturally

(53:30):
in rhythm with the heartbeat of the. Islands there's no
money to, exchange and travel From New england could not be.
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