Episode Transcript
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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 the Legal Exchange with Todd Lutsky. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and I'm
joined by Todd Lutsky, a partner with a law firm
of Cushing and Dolan with a master's in taxation. Welcome Todd.
How are you today?
Speaker 3 (00:51):
I am never better in you?
Speaker 2 (00:52):
I am great? Thank you? What to have for us
this week?
Speaker 3 (00:55):
I've got two cases. We're going to go to Hawaii.
We've got a Supreme Court case why. Yeah, it's interesting.
It's simply a case where you know, a medicaid application
got denied, and it'll be interesting to see why and
how and basically how this medicaid application process works, because
we don't get into that a lot. So and also
(01:17):
of course why if they had done planning, they wouldn't
have had any of these problems. That's always another not judging,
but we're not judging, so that'll be very interesting and
I think educational. And then we head over to Montana,
so we're out west most. I got a Supreme Court
case out there dealing with you know, undo I basically
(01:37):
call this case undue influence is always lurking. It's always
lurking out there, and that's sort of what happens here
where there's some undue influence. But I think maybe the
better argument also might have been, you know, lack of capacity.
But again, the bigger problem is had you done this,
they were trying to protect a piece of property for
the daughter. Had you just set up a irrevocable trust,
(01:57):
I think you would have solved all of these problems
in this case, and we'll show you how.
Speaker 1 (02:01):
So.
Speaker 3 (02:02):
I think lots of interesting cases today which both of
them actually tie into the guide that we're giving away,
which is the Top seven estate planning trust Both of
these cases would have none would have gone away. I
think had we done trust planning. And again, the type
of trust planning for you is important. Don't know what
kind you need? This never done your estate planning. Here's
(02:24):
the top seven. Pick which one is right for you.
If you've done them and you think you need a
tweak or maybe it's time to review or change your
plan to a different kind of trust because you're older
or you have different life events. Get the guide. This
tells you from revocable to irrevocable to special needs trust,
pooled trust if you've got Medicaid situations. It explains multiple
(02:45):
kinds of irrevocable trusts and how they work and the
tax implications of having them. So great guide for everybody.
I think it's little something for everyone in this guide,
call and get it. Top seven estate Planning Trusts eight
six six eight four eight five six nine nine or
Legal Exchange Show dot Com again eight six six eight
(03:08):
four eight five six nine nine or Legal Exchange Show
dot Com. And now let's head over to Hawaii. So
this case is interesting. So it's I love the nursing
home name Aloha Nursing Home.
Speaker 2 (03:22):
Yeah, I picked out one. If I have to go into.
Speaker 3 (03:24):
One, I'm going there. So the Aloha Nursing Home accepts
Jane as a permanent resident on March twenty eleven based
on the Department of Health and Human Services approved Medicaid application.
So she's in Okay on Medicaid and husband was the
one helping her. He was the authorized representative when you're
(03:46):
filling out the forms. But in November of twenty twelve,
the husband lost capacity and the Aloha Nursing Home terminated
Jane's eligibility. Now, don't get confused. His his capacity should
have nothing to do with her Medicaid eligibility, and it
really didn't. But it terminated Jane's eligibility because they discovered
(04:10):
that the house they must be the state discovered that
the house was owned in a revocable trust. Come back
to that, Aloha never received any notice of termination from
the state. They only found out because the bills, of course,
weren't being paid by the state. So Aloha tried to
(04:32):
work with the family to get the house transferred out
of the trust, which is what you need to do.
But they had to no avail.
Speaker 4 (04:42):
Well.
Speaker 3 (04:44):
Aloha then decided to reapply for Medicaid, but was denied
because of they don't have financial eligibility. Why because you
didn't get the house out of the trust. Again, I'll
come back and explain the importance of the house, primary
residence and the trust situation in a minute. Okay again,
Department of Health and Human Services did not provide notice
(05:06):
of denial to Aloha Well. In June of twenty fourteen, finally,
Jane died Well. Aloha then met with the Department of
Health and Human Services saying I'm seeking payment from twenty
twelve when you terminated Medicaid until her death in twenty
fourteen because I did provide services, and the DHS said, sorry,
(05:32):
there was a mistake. She should have never been put
on Medicaid to begin with. Why the house situation, so
they said, you know, too bad, too bad for you. Well,
the court went back and forth, back and forth on
how the nursing home had no standing and was not
(05:53):
the authorized representative, not the applicant filing, you know, for
or helping the applicant file, so they really could not
even request the fair hearing right because they have no standing. Well,
They didn't like that, so they appealed. The Supreme Court said, ultimately,
we're going to reverse, and we reversed because the nursing
(06:14):
Home Aloha had a constitutionally protected property interest in its
reimbursement for the services it provided, It had due process rights,
and therefore it had standing to challenge this. So no
answer remanned to say.
Speaker 2 (06:32):
I don't enjoy that. You need to, but I'm glad
to see they pushed back on it. Yeah, because they
got an approval notice and they've been providing the services.
Speaker 3 (06:41):
And then you stopped, and then you know, and again
you at least got to give this nursing home the right.
So they did provide the service. They didn't kick you know,
mom out, They kept course they could have for free. Yep,
So I get it. I get it so early. What's
the issue here. It's really all about medicaid eligibility and
understanding how to do it in never applying on your own.
(07:02):
How many times have we said that, Yeah, people say, oh,
I can fill out the application. It's harder than.
Speaker 2 (07:06):
That because the house doesn't stop you from being eligible.
You just have to handle it the right way.
Speaker 3 (07:12):
Correct. Correct, So let's go through an example here. So
let's say you got this married couple. They have a house.
Let's say they got five hundred thousand investments, two hundred
and fifty in the bank, and two hundred and fifty
in the IRIS. We got a million bucks and a
million dollar home.
Speaker 2 (07:27):
Yep.
Speaker 3 (07:29):
First thing you need to deal with, right is the money.
Because to become financially eligible, there's a community spousal resource allowance.
So you reach into the million for the healthy spouse
in this case, I think it was the husband. You
pull out about one fifty seven and you give two
thousand to two approximately two thousand to the six spouse,
(07:49):
and there's your one, you know, fifty eight to fifty nine,
leaving us with what So you take the IRA, the
bank accounts, and the investment accounts minus the one P
fifty nine leaves you about eight forty one of money.
Speaker 2 (08:06):
Yep.
Speaker 3 (08:07):
So we've got eight hundred and forty one thousand dollars,
which is causing medicaid eligibility. I get it way over,
way over. So now you would simply tell the nursing
home or you tell your client a healthy spouse, we're
going to buy two annuities, one for his IRA and
one for the balance of the money that's not in
the IRA two medicaid annuities probably five year payout. Convert
(08:30):
them to an income stream and like magic, that's off
the table and the healthy spouse is getting a stream
of money.
Speaker 1 (08:37):
Good.
Speaker 3 (08:38):
I like it, But we're still denied because we have
this million dollar home sitting in the revocable trust. You
got to get it out of the revocable trust. Right.
If it's in the revocable trust, it's deemed non countable.
But if the healthy spouse is living there owns it,
now it I'm sorry, it's deemed countable in the revocable trust.
(08:58):
But if the healthy spouse is living there and owns it,
then there's no value limitation. It's automatically non countable and
non leanable.
Speaker 2 (09:05):
So even though it's in the revocable trust, is the
spouses the healthy spouses. Social doesn't matter, doesn't it's the
naming the owners owner.
Speaker 3 (09:14):
You're going to get screwed, and that's what happens. So
I think the nursing home is partly right here, but
they did make a mistake in approving it to begin with.
Speaker 5 (09:20):
Right.
Speaker 3 (09:20):
But but I mean I think the state's partly right yeah,
but they did make a mistake to begin with when
they when they applied. But this is why you hire people, right.
So now once it comes out, it's fine. And again,
if you're single, you can just check a box that
I intend to return home and it'll be non count
in case.
Speaker 2 (09:36):
That does it. They can't, but you could have all
the best of intentions.
Speaker 1 (09:40):
Good.
Speaker 3 (09:40):
The real news here is, folks, an irrevocable not revocable
trust should have been done from the beginning. At the
end of five years, it would have been all protected
and we wouldn't have been dealing with wondering whether we
have to take it out of the trust or not
take it out of the trust, or whether one spouse
gets sick or the other spouse gets sick later. It
would have just been protected. So, folks, plan very important,
(10:01):
and the right kind of planning is very important. So
when you're doing your planning, get this guide. The top
seven estate planning trusts are described to help you pick
which trust is right for you to do the right
planning eight six six eight four eight five six ninety
nine or Legal Exchange show dot Com excellent.
Speaker 2 (10:22):
Thank you Todd, you've been listening to Todd Lutski, a
partner with the law firm of Cushing and Dolan. I'm
Susan Power as a financial advisor with the Armstrong Advisory Group.
We've got much more to come when we return to
the legal exchange with Todd Lutsky.
Speaker 1 (10:37):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning and asset protection.
This month, they're offering a free guide called Demistifying the
Top seven estate Planning Trusts. This guide breaks down the
most common types of trusts, explains the pros and cons
(10:58):
of each, and helps you understand and which might be
right for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(11:18):
the facts first. Call Cushing and Dolan now at eight
sixty six eight four eight five six ninety nine to
request your free copy or visit legal exchange show dot com.
The proceeding was paid for in the views exprest Or
Sole leaders of Cushing and Dolan. Cushing and Dolan, ind
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and I'm Strong Advisory do not endorse
each other and are not affiliated.
Speaker 4 (11:38):
HI. This is Chuck Zada from the Armstrong Advisory Group.
If you have an IRA, it's critical to understand the
tax rules that may affect your family as you plan
for retirement. Current law requires most non spouse beneficiaries to
withdraw the full balance of an inherited I ray within
ten years, which may lead to higher taxes and reduced
value over time. If beneficiary designations are outdated are incorrect,
(11:58):
they could possibly override your will and change how your
assets are distributed. That's why we're offering a new guide
called Leaving a Lasting Legacy, a resource to help you
better understand inherited irays and other legacy planning topics that
could affect your future. Make an informed choice and take
control of your plan. Call eight hundred three nine three
four zero zero one and ask for your free guide today.
(12:19):
That's eight hundred three nine three four zero zero one
A request your copy online at 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 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 holidays are just around the corner, so now is
the time to plan your winter escape. Trade in the
cold for sunshine, sea breezes and island vibes in the
(12:48):
US Virgin Islands, America's Caribbean paradise, whether it's a romantic retreat,
a family celebration, or a solo recharge before the new year.
Saint Croix, Saint Thomas and Saint thank John offer the
ultimate warm weather getaway. Lounge on sun drenched beaches, explore
vibrant culture and celebrate the holiday's island style. No passport,
(13:11):
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This is where the stress melts away and you find
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Go to visit usvii dot com and book your trip today.
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(13:31):
Caribbean paradise. Your holiday escape starts here at 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 sixty six eight four eight five six
ninety nine. That's eight sixty six eight four eight five
(13:52):
six ninety nine.
Speaker 2 (13:55):
Welcome back into the legally Change with Todd Lutsky. I'm
Susan Powers of financial Advice with the Armstrong Advisory Group,
and I'm joined by Todd Letsky, a partner with a
law firm of Cushing and Dolan with a master's in taxation.
What's going on in Montana? Did you say, uh, yes, yeah, Montana, Montana.
Speaker 3 (14:14):
We're heading over to Montana. It's this case I like
to call undue influences always lurking, right, and so planning
obviously is very important. So this case seems starts off
kind of normal. Like David, you know, he's the dad,
and he did a will in August of two thousand
in which he a will, by the way, not a trust,
(14:36):
did just a will where he devised his his house
to his only daughter, Wendy. In twenty seventeen, David's had
some health issues resulting in his you know, inability to
care for himself really independently. So interestingly enough, friends and
some family sort of assisted him for a while until
(14:56):
twenty twenty three when he killed himself and so yeah,
I know, well you just brought the party down, I know,
but well he died, okay, it just by suicide, so
we need to know that part. Wendy then began living
in the house because that's the daughter, and she's believed
that she was the owner, which made sense to me. However,
(15:18):
David David's brother Philip comes lurking and he claims that
David actually signed a deed in twenty eighteen conveying the
home to David upon date upon I'm conveying the hometown, Philip,
upon David's death. It's like a life estate deed, is
(15:38):
what I'm what.
Speaker 2 (15:39):
I'm thinking, she rather than his daughter.
Speaker 3 (15:42):
If there's a deed, there's a deed, right, So Philip
then issues and notice to Wendy to vacate. It's not
your house. Well, Wendy then files that quiet title action.
Speaker 2 (15:53):
Quiet tight, Yeah, I even talked about that.
Speaker 3 (15:56):
Yeah, we got to get good title. We got to
settle as to who the owner of this property really is.
That's really what that means. Well, Philip files a summary
judgment saying this is clear, there's no issue of material
fact here, it's my house, and the trial court grants
the summary judgment motion for the brother. Well, Wendy, as
you might imagine, wasn't happy with that, so she appealed.
(16:18):
Philip then shows the existence of the deed to him. Well,
that's pretty clear. Wendy then says, well, there's evidence here
showing of Dad's mental and physical illness. Remember he had
illness at the time of the deed, and evidence showing
that David, and evidence further evidence showing that David, her father,
intended to devise the home to her. Well, the Supreme
(16:40):
Court reversed, stating that well, clearly, with all this evidence
being prevented, there must be an issue, a genuine issue
of material fact here, So you need to go hear
the case.
Speaker 2 (16:53):
You did it again, shows in one week. That is
unacceptable Lutsky.
Speaker 3 (16:58):
So but I'm glad they did because that's exactly what
a summary judgment means. That there's no issue of material fact,
nothing to discuss. You win on the merits. Well, well,
after the presentation of this evidence, there certainly is some
concern about whether or not there's a material fact. So
the Supreme Court said, go to court and have a hearing,
(17:19):
which I like. But again, folks, I think this all
comes back to you know, in my head, if I'm
the father and I want to protect the house from
my daughter, I'm thinking an irrevocable trust might have been
the way to go, not a simple will, right, But folks,
it's all about doing your planning and figuring out what
trust is right for you. And that's why this guide
is the top seven estate planning trusts that I think
(17:40):
are used most frequently. Yes, from nominee realty trusts, which
are not really trusts. So you got to learn about
those irrevocable trusts, revocable trust and by the way, many
kinds of irrevocable trusts, a pool trust, special needs trusts,
but more importantly how they work your dos and don'ts
and the tax is that go along with him, the
(18:01):
tax benefits that go along with him. I say all
those things, but in reality, I just want you to
get started with your estate plan and help you pick
the right trust for you. Or if you've done your
planning and you want to revise it, this will help
you pick whatever the new trust might be for you.
So call and get it eight six six eight four
eight five six nine nine or Legal Exchange Show dot com.
(18:24):
Top seven estate Planning Trusts eight six six eight four
eight five six nine nine or Legal Exchange Show dot com.
So what do we learn from this, Well, let's go
through your uncle. Well, this is the undo. This is
the lurking, undoing lange. So I say, I say, okay,
what is undue influence? Undue influences. Phillip in this case
(18:49):
likely took David the brother to the attorney, probably picked
out the attorney to use, and was probably present during
the transaction. And at the end of the transaction Philip
had way more than he had before the transaction was done.
By the way, that is the definition of undue influence. Yeah,
(19:14):
I mean, that is classic definition of undue influence. And
I feel like that's probably what happened.
Speaker 2 (19:20):
Here and meanwhile, the dart is taking care of him.
Probably not cool, Uncle Phil.
Speaker 3 (19:26):
Yeah, that's exactly right. Well, interesting that they didn't make
that argument. They talked more here about lack of capacity.
Remember that's what they brought up, because it did say
that in twenty seventeen, David did have some health issues
resulting in his inability to care for himself independently. I
don't know if that which may not be cognitive exactly
(19:49):
Susan exactly so, But I'm not really sure where they
went with that. But they were more about lack of capacity,
which is you need to produce in this case, to
get lack of capacity, you need to produce health records
showing what this person's level of cognitive capacity is to
prove that it didn't exist when the document was signed. Now, note,
(20:14):
here's why I'm not excited that they went down this road.
And by the way, maybe they won't remember this is
going to be remanded. When they remand it, maybe they'll
really focus on both of these arguments, not just the
lack of capacity, which I think they need to do.
And here's why, because I look at this and I say, well,
he signed that deed in twenty eighteen. Well, he only
(20:38):
began having health issues in twenty seventeen. It could have
been let's say it was dementia. It might have been
early dementia. He might have absolutely still had testamentary capacity
at that time, and so the deed could have been
valid under the capacity argument.
Speaker 1 (20:59):
Right.
Speaker 3 (21:00):
So, well, I think you will need to bring up
the capacity argument in the litigation that's going to follow here.
I think you can't ignore undue influence, which seems to
be the the you know, running right in the square
in the face of undue influence. I think that's your
stronger argument here. Anyways, the bigger issue is how do
(21:25):
we just not be in this situation? Ever? Well, why
wouldn't we have just set up an irrevocable trust. David,
you said you wanted this house to go to your daughter.
Maybe you want to protect it for your daughter. Why
not set up an irrevocable trust right from the get go.
Put the house in that way. You know it's going
to be protected from the nursing home in case he
gets sick, which, by the way, he did. Maybe it
(21:48):
didn't result in a nursing home, but he did, right
get sick, and so you know this would have actually
eliminated that whole concern probate nursing home. And I know
now it's protected from my daughter and number one.
Speaker 2 (22:03):
And if when he was doing that, Todd, if he
had any concerns about a brother lurking, or even about
his daughter, he could have had an impartial third party
be the trustee right to protect.
Speaker 3 (22:17):
In this case, let's say he had no trouble with
his daughter. So what will you do is Secondly, the
trustee on this irrevocable trust could have been the daughter.
And if it was the daughter as trustee, therefore, in
order to get the house out of the trust, the
trustee daughter would have had to sign the deed to
get it out. And then it can only come out
(22:39):
to certain people listed in the document.
Speaker 2 (22:42):
And it's not going to be Uncle Phil and it's.
Speaker 3 (22:44):
Not going to be Uncle Bill. So this would have
absolutely not only protected it from probate in the nursing home,
I really think, and not in all cases, but in
this case, I think it would have really protected it
from ever being unduly influenced to take make it to
uncle Bill.
Speaker 2 (23:01):
It's about the family for you, in your family.
Speaker 3 (23:04):
So you know, I think you really have that kind
of a check in balance when you do this. Now,
you know, even in this case, if the donor's daughter,
I'm sorry, if the power of the power to remove
and replace the trustee was in there, even then the
daughter would be removed and say hey, what's going on.
It would be a notice. It would be a wake
up call. Folks, planning is better. Learn what type of
(23:27):
trust is right for you to stay out of these situations.
Eight six six, eight four eight five six nine nine
or Legal Exchange show dot com.
Speaker 2 (23:36):
You've been listening to Todd Lutsky, a partner with a
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group, and Todd will
be answering your listener questions next when we return to
the Legal Exchange with Todd Lutsky.
Speaker 1 (23:52):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning, and asset protection.
This month, they're offering a free guide called Demistifying the
Top seven estate planning trusts This guide breaks down the
most common types of trusts, explains the pros and cons
(24:13):
of each, and helps you understand which might be right
for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(24:33):
the facts first. Call Cushing and Dolan now at eight
sixty six eight four eight five six ninety nine to
request your free copy, or visit legal exchange show dot com.
The proceeding's paid for in the views express or sole
leaders of Cushing and Dolin, Cushing and Dolan, d or
Armstrong Advisory may contact you're offering legal or investment services.
Cushing and Dolan and I'm Strong Advisory do not endorse
each other in or not affiliated. The holidays are just
(24:54):
around the corner, so now is the time to plan
your winter escape. Trade in the cold for sunshine, sea
breezes and island vibes in the US Virgin Islands, America's
Caribbean Paradise, Whether it's a romantic retreat, a family celebration,
or a solo recharge before the new year. Saint Croix,
Saint Thomas, and Saint John offer the ultimate warm weather getaway.
(25:17):
Lounge on sun drenched beaches, explore vibrant culture, and celebrate
the holiday's island style. No passport, no hassle, just warm weather,
clear blue water, and unforgettable memories. This is where the
stress melts away and you find yourself naturally in rhythm
with the heartbeat of the islands. Go to visit USVII
(25:37):
dot com and book your trip today. That's visit USVII
dot com the US Virgin Islands, America's Caribbean paradise. Your
holiday escape starts here at visit USVII dot com.
Speaker 5 (25:52):
This is Michael Valila, adjuedent 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
(26:13):
American heroes as well by making a donation today by
visiting dav five k dot Boston. That's dav five k
dot Boston.
Speaker 6 (26:22):
Hi, this is Mike Armstrong from the Armstrong Advisory Group.
When it comes to legacy planning, having a will is important,
but it may not be enough. A will only covers
probate assets, and the probate process can be slow, public,
and expensive. That's where trusts come in. Trust can help
you avoid probate, keep your wishes private, and control how
and when your assets are distributed. Whether you're looking to
support family, minimize taxes, or prepare for the unexpected, a
(26:46):
well designed plan can make a meaningful difference. Our new
free Guide Leaving a Lasting Legacy covers wills, trusts, and
other strategies to help you build a strong retirement plan.
Take the first step towards clarity by calling eight hundred
three nine three for zero zero one right now and
asking for your free guide today. That number again is
eight hundred three nine three four zero zero one, or
(27:07):
request it online at Armstrong Advisory dot com.
Speaker 1 (27:10):
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 Todd will answer
your questions about anything and everything that's included in the
(27:32):
estate planning process. Once again, here's Todd Lutsky and Susan Powers.
Speaker 2 (27:39):
Welcome back Todd. A few questions from listeners for you.
First question comes from Bonnie in Grafton, mass And Bonnie writes,
I am married, but my name is not on the
deed to the house. Only my husband's name is. Does
my name need to be on the deed to avoid
probate if my husband passes away. We've been married for
over twenty years, but he does have chill from a
(28:00):
prior marriage. So what happens if the husband dies and
she's not on that d Yeah.
Speaker 3 (28:08):
So I love when people come in all the time
and they say, let's not even use a husband wife situation.
They go, well, you know, I got this house that
I that I you know, I sort of it's my
son's house, but but you know I bought it and
but it's my son's go. But but whose name's on it?
Speaker 1 (28:25):
Right?
Speaker 3 (28:25):
My name? Well it's not your sons, then right doesn't
have right, you know, it's it's not your saying, but
we have this agreement. But agreements for real estate don't
matter because of something called the Statute of Frauds. Anything
that deals with real estate must be in writing if
you want it enforced. You can't say I orally said
this is going to happen or that's going to happen.
Does not work violate something called the Statute of Frauds.
(28:48):
So so you got to remember these little side deals
that everybody has in their head really doesn't matter. Okay,
when you die, it only matters as to how it's owned.
So in this case, how is it owned? Seems like
it's owned in husband's name only. And by the way,
it's not uncommon that, you know, especially in the older days,
(29:10):
you know one person's name is on the property.
Speaker 2 (29:14):
And in this case it was a second mag they've
been together for a long time, but he does have
kids from a primary So.
Speaker 3 (29:20):
Now what it doesn't say in here is anything about
a will or an estate plan for them.
Speaker 2 (29:27):
Doesn't sound like they've done anything. If the house is
still in his name.
Speaker 3 (29:30):
Yeah, so let's assume nothing was done, not even a will. Right, Well,
when he dies, it is absolutely going to go to probate.
So the first question is does it avoid probate? No,
it does not. It's going to go to probate. And
now where is it going to go? Well, if it's
in his name alone, it's not automatically going to go
(29:52):
to the spouse like it would if it was joint right,
what I think she's asking about here, If you put
a joint name on it, you would get the avoidance
of probate and the operation of law. It would move
to the to the surviving joint owner. The problem you
have here is with no will in a second marriage.
(30:12):
You have to look at the statute. Because every statute
every state is different. So when you have second marriages,
I believe half goes to the kids of the prior
marriage and then something goes to the spouse. I don't
know how they divide it. I don't know if you
get like a life estate for the wife or ematic.
(30:34):
It's definitely going to be a problem. Now, if it's
first marriage, it's not so bad. But if it's second marriage,
then you have to consider the kids from the second
marriage right away. So, yeah, this is a problem.
Speaker 2 (30:50):
So what should they do?
Speaker 3 (30:52):
So I think they should do sit down with a
lawyer and doing a state plan. I mean, there's a
whole state plan.
Speaker 1 (30:56):
You.
Speaker 3 (30:56):
You have more than probate and tax reasons to plan here.
You've got two families that need to be taken care
of and make sure that we not only provide for
each other, but we provide for both sides of the
family without one sort of screwing the other one if
one dies. Okay, So lots to do here from a
(31:17):
planning perspective. But again, the type of trust and the
type of plan they put together, the type of trust
they need is really going to be driven by their
family dynamics and their wishes. How will they know? They
need to get this guy the top seven estate planning
trusts so that they can pick which kind of trust
is right for them. But I say that for them,
for you, for everybody listening. If you've not done your planning,
(31:40):
this guide is going to help you figure out which
kind of trust works for you, how they work, the taxes,
the dos and don't swell you're living and when you
pass call and get It eight six six eight four
eight five six nine nine or Legal exchange show dot com.
The top seven estate planning trusts eight six six eight
(32:02):
four eight five six nine nine or Legal exchange Show
dot com.
Speaker 2 (32:08):
Our last question comes from William in Middletown, Connecticut, and
William writes, my mother and stepdad have a revocable trust
written thirty plus years ago in Connecticut, and then they
relocated to Florida. Their house in Florida is not in
their trust. My stepdad passed away three years ago. Would
my mother now be able to create a new trust
(32:30):
in Florida. Well, I think there's a lot more going
on here than that question.
Speaker 3 (32:36):
That's the easy question.
Speaker 2 (32:38):
So will it avoid probate?
Speaker 3 (32:40):
So so, I think the first problem we have is
I wonder how that Florida trust Florida property was owned.
Oh did that happen?
Speaker 2 (32:47):
Maybe they moved after so maybe they bought it together and.
Speaker 3 (32:51):
Then and so he died in that they already owned that.
Speaker 2 (32:54):
House, yes, correct, but not in the trust.
Speaker 3 (32:57):
If that house was owned jointly. We just talked about
that and it would have just went to the wife
who's still living, and the wife can do what she
wants with it, she can create her own trust and
put that property into it because it's hers. If it
was jointly owned, it's hers, and again it would have
avoided probate. And now it's time for her to plan
(33:18):
and protect it.
Speaker 2 (33:19):
Is there a reason why she couldn't put it into
the revocable trust that they did together thirty plus years ago.
Speaker 3 (33:25):
Yeah, yeah, there is because at the time when someone dies,
that trust becomes irrevocable, right, and so that's when you
create the marital share and the remainder share, and you
can't really just fund it. Well, I guess if there's
a marital bucket, she could perhaps put it into the
marital bucket, as long as the marital bucket is going
(33:47):
to be included in her estate when she dies. It'll
depend on what elections were made at the date of
death in terms of q TIP elections for tax purposes.
But again by the same token, I would say, even
if you could do that, I might say, well, you
did a revocable trust way back thirty years.
Speaker 2 (34:05):
Thirty plus years ago. They're older now for sure.
Speaker 3 (34:08):
You're much older exactly, Susan. I would be like, maybe
you should take that Florida property stick it in an
irrevocable trust since you already own it, get it protected
from the nursing home if that's now on your LISTEP
and then go back and revisit the joint revocable trust
(34:29):
that you had that's now irrevocable, and see if you
can do a disclaimer of principle in those trusts so
that those assets are still sheltered from estate taxes when
the survivor dies. But by turning off the right to
principle in that trust, which is the disclaimer, it starts
(34:52):
a five year waiting period for medicaid on those assets.
Speaker 2 (34:56):
So she wouldn't have to empty out those trusts.
Speaker 3 (34:59):
Correct, right, because if she did, then it's just subjecting
it to a state taxes when the survivor dies. Again,
so very important in a situation like this, And this
is another reason why when one spouse dies, you need
to call your lawyer. You need to say what do
I do now? Remember you set this up because you
(35:21):
wanted to take advantage of tax savings, probate savings, bloodline planning.
In order for that to happen when one dies, you
need to call up to effectuate that, to take the
documents that you paid for and make the plan happen.
So in this case more is going on than just that.
(35:46):
So here not only do I want to figure out
what to do with assets that mom has in her
own right, but what do I do with the old trust?
So where that's where this disclaimer comes in.
Speaker 2 (36:00):
So now Todd, we're just thinking, I know they're in Florida,
but in Massachusetts, where you have a two million dollar
per person exemption, do you find that you're doing more
joint irrevocable trusts at this point? So there's stuff that
has to be done when someone dies, right, absolutely, yeah, So.
Speaker 3 (36:18):
Do I do more joint trust? I do more joint
revocable trusts mainly because the federal exemption is so high. Right,
that's the sort of driving factor in when I do
one revocable trust versus versus two got to go trust.
So in the good news now is with the exemption
(36:41):
approaching fifteen million come twenty twenty six, more and more
people can do one joint trust and they are really
a great way to go folks. That's in the guide.
That's one of the revocable trusts in the guide. So
learn about revocable irrevocable get the trust to see what
trust is right for you eight six six eight four
(37:03):
eight five six nine nine or Legal Exchange Show dot com.
Speaker 2 (37:08):
If you have a question you'd like to ask Todd,
visit his website Legal Exchange Show dot com and click
on the ask Tod tap. 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 in Dolan. I'm Susan Powers,
(37:29):
a financial advisor with the Armstrong Advisory Group. We'll be
back with more after this quick break on the Legal
Exchange with Todd Lutsky.
Speaker 1 (37:38):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning, and asset protection.
This month, they're offering a free guide called Demistifying the
Top seven estate Planning Trusts. This guy breaks down the
most common types of trusts, explains the pros and cons
(37:59):
of each hand helps you understand which might be right
for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(38:19):
the facts first. Call Cushing and Dolan now at eight
six six eight four eight five six nine nine to
request your free copy, or visit legal exchange show dot com.
The proceeding was paid for in the views exprest Or Sole,
leaders of Cushing and Dolan. Cushing and Dolan, d or
Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and I'mstrong Advisory do not endorse each other,
in or not affiliated. The holidays are just around the corner,
(38:41):
so now is the time to plan your winter escape.
Trade in the cold for sunshine, sea breezes and island
vibes in the US Virgin Islands, America's Caribbean paradise, whether
it's a romantic retreat, a family celebration, or a solo
recharge before the new year. Saint Croix, Saint Thoma and
Saint John offer the ultimate warm weather getaway. Lounge on
(39:04):
sun drenched beaches, explore vibrant culture, and celebrate the holiday's
island style. No passport, no hassle, just warm weather, clear
blue water and unforgettable memories. This is where the stress
melts away and you find yourself naturally in rhythm with
the heartbeat of the islands. Go to visit USVII dot
com and book your trip today. That's visit USVII dot
(39:28):
com the US Virgin Islands, America's Caribbean paradise. Your holiday
escape starts here at visit USVII dot com.
Speaker 4 (39:38):
Hi, this is Chuck Zada from the Armstrong Advisory Group.
If you have an IRA, it's critical to understand the
tax rules that may affect your family as you plan
for retirement. Current law requires most non spouse beneficiaries to
withdraw the full balance of an inherited I ray within
ten years, which may lead to higher taxes and reduced
value over time. If beneficiary designations are outdated are incorrect,
(39:59):
they could possibly override your will and change how your
assets are distributed. That's why we're offering a new guide
called Leaving a Lasting Legacy, a resource to help you
better understand inherited iras and other legacy planning topics that
could affect your future. Make an informed choice and take
control of your plan. Call eight hundred thirty nine three
four zero zero one and ask for your free guide today.
(40:19):
That's eight hundred three nine three four zero zero one
A request your copy online at Armstrong Advisory dot com.
Speaker 1 (40:26):
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. 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
(40:47):
eight five six nine 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 (40:59):
Welcome back in 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
masters in taxation. So, Todd, you've got seven trusts in
this guide. Two of them I want to focus on
today are in the special needs world, so special needs
(41:21):
trust and sole benefit types of trust. So I know
that there are different types of special needs trust what
are the most common ones?
Speaker 3 (41:31):
So I guess that the two special needs trusts that
you would have would be I'm trying to think like
a self settled special needs trust.
Speaker 1 (41:42):
Right.
Speaker 3 (41:42):
That would be one likely where your child perhaps or
the individual was not disabled at birth.
Speaker 2 (41:49):
Yep, but had an accident, maybe got injured.
Speaker 3 (41:52):
Yeah, some kind of an accident occurred, and this child
now is disabled, this person is disabled, and they get
like a settlement, you know, and so here comes a
chunk of money. Well, this person either the court establishes
the special needs trust, the person, the injured party, disabled
party as long as they're competent and can do it,
(42:13):
establish it, or the parent or guardian establish the self
settled one self settled because it's the disabled person's money yep,
that's being used to fund it.
Speaker 2 (42:24):
Got it.
Speaker 3 (42:26):
A third party special needs trust is the parents doing
their own estate plan, and usually inside their revocable or
irrevocable trust, depending on what kind of planning they're doing,
says what happens when they both die, and when they
(42:47):
both die, there's usually buckets created for children. One of
the children's buckets would be this special needs trust bucket, right,
And that's a third party trust, okay, because it's funded
by them.
Speaker 2 (43:03):
Okay. So I know I have run into folks through
the course of working that have created a special standalone
special needs trust for their child where they haven't received
a settlement, but the parents created it and they may
have put money into it themselves, but that's done during
(43:24):
their life. It sounds like the language in the trust
that you're mentioning would be funded at death versus them
funding it during their lifetime.
Speaker 3 (43:34):
Correct, So while third party trust on both cases.
Speaker 2 (43:38):
But okay, correct, So why would you do one way
versus the other?
Speaker 3 (43:42):
So I don't see what you just said. That often
I don't see parents coming in to do an estate
plan and saying I do see it. It's just not
as often where they say we've already established, you know,
a special needs trust for our child, and we got
(44:03):
an ID number, and we got bank accounts and there's
money in it. Can you do that? Yes, that's what
you just described. Yes, I just the only reason I
can see to do that would be if you also
have aunts and uncles and grandparents and other people who
(44:24):
want to take care of this special needs person and
they want to contribute, so they can contribute now through
the years to this standalone trust. If you don't really
have people waiting in line to do that, I don't
(44:45):
need it if I'm the parent. Because I'm the parent,
I can just provide directly while I'm alive for my
special needs child. I don't need to put it in
a separate bucket to have the trust bucket provide for them.
I just do it myself.
Speaker 2 (44:58):
Because I know there are lots of grandparents out there
that have put language into their own trust documents that
special needs language for a grandchild, right, they can do
that as well.
Speaker 3 (45:09):
I'm different sort of, and that's sort of the idea
of Now grandparents are saying, I need to take care
of my kids and my grandkids, so I have it
set up. We're inside their trust, which is that third
party trust they create a special needs share for that
particular child or grandchild. Yeap, oh, absolutely right. So folks,
(45:30):
that's just one of the seven kinds of trusts that
are in this guide, and they explain from revocable to
irrevocable to pool trusts. More importantly, no many realty trusts.
Oh my gosh, those are a disaster. But got to
read them because a lot of people have them. This
guide is great for you to get started to pick
(45:52):
the right trust for your situation. And if you've already planned,
to review your plan and see if a different kind
of planning strategy maybe you've gotten older and you want
to switch, is right for you. So call and get
a top seven estate planning trusts eight six six eight
four eight five six nine nine or Legal Exchange Show
(46:16):
dot com again eight six six eight four eight five
six nine nine or Legal Exchange Show dot Com.
Speaker 2 (46:24):
Okay, so let's just compare the self settled in the
third party because those are probably the most common types
that yes, we see and you see throughout the course
of your business. So if you have a self settled trust,
that means there's money already in it. And let's say
mom or dad or both of them have passed away.
So now there's money in this third party trust that
(46:45):
share for that special needs child. What's the difference between
the two in terms of what the funds can be
used for, like they would if they're living like already
in like a group home or something like that. What
happens to benefits things like that, Like operationally, how does
that function?
Speaker 3 (47:02):
The good news is, operationally there's no difference. But payback
there's a difference. So let me explain.
Speaker 2 (47:09):
You don't like payback.
Speaker 3 (47:10):
I know you don't like that sound of that.
Speaker 2 (47:12):
I don't like that word.
Speaker 3 (47:13):
So two things. The two trusts generally are going to
have the same language and saying things like the trustee
of the trust, either one self settled or or third party.
The trustee holds the assets in trust for the benefit
of the disabled individual. The trustee and its sole discretion,
(47:39):
can make distributions to this child for any reason or
no reason or not at all. That way, you don't
have to guess why they need it or how much
they need it covers everything. The key is that the
child doesn't own it, and therefore the child benefits are
(48:01):
not disrupted during life. Right, Yeah, So if they owned
it and they were an asset based benefit, they would
go over over assets.
Speaker 2 (48:11):
Right if they're getting those benefits.
Speaker 3 (48:12):
So in this case, it protects it keeps them on
governmental benefits, but enhances their life through these discretionary distributions.
Got it.
Speaker 2 (48:21):
So do you need to have a special type of trustee,
Like do you need like a professional trust corporation kind
of thing, or you.
Speaker 3 (48:27):
Could put a child on that, maybe a sibling who
knows that person's needs and things like that. Yeah, I'm
not really worried about like divorce proofing it here, right,
So so no, you probably wouldn't have to go the
independent route.
Speaker 2 (48:39):
Yep.
Speaker 3 (48:41):
However, the difference between the two self settled versus third party. Remember,
the child is receiving these benefits during life. In a
self settled trust. If the child has received thousands and
thousands of dollars of benefits from the state, when they die,
whatever is left in the trust that they have not used,
(49:05):
there's a payback provision to the state. How much is
left in the trust? How much do I owe the state?
Speaker 6 (49:12):
Right?
Speaker 3 (49:12):
You gotta give it to him?
Speaker 2 (49:13):
And how about the third party that's funded by a
mom and dad's death? Are grand?
Speaker 3 (49:18):
Third party trusts have no payback provision. So in this case,
whatever is left after the child passes is generally directed
either to that child's children, the grandchildren if any, or
to the sibling, the other children, the other donors children.
Speaker 2 (49:38):
And you can decide where those funds go when that
special needs child passes away.
Speaker 3 (49:42):
It's listed right awayhen you got created. Yeah, when you
create the document, you put that language in there.
Speaker 2 (49:48):
So big difference for those folks out there that didn't
think that they could. Like let's say they have two
kids and they thought, I'm just going to leave everything
to my daughter because my son is special needs, She'll
take care of them. That's not what you'd recommend.
Speaker 3 (50:02):
I don't. I don't recommend that at all, mainly because
there's tax issues that every time you make it it's
a gift to the kid by the daughter. There's creditor issues,
divorce issues for the dot. I mean, you don't want
you don't want to go down that road. If you
can help it, I would just set up the trust
and don't just have it provided for by the child. Folks.
(50:22):
Top seven estate planning trusts. Find out which one's right
for you, and find out what how to get started
in your estate plan eight six six eight four eight
five six nine nine or Legal Exchange show dot com.
Top seven estate Planning Trusts eight six six eight four
eight five six nine nine.
Speaker 2 (50:44):
Todd Lutsky from the law firm of Cushing and Dolan,
thank you so much.
Speaker 3 (50:48):
Thank you, Susan. Always a pleasure.
Speaker 2 (50:49):
I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
We thank you for joining us and we'll be back
again next week on the Legal Exchange with Todd Lutsky.
Speaker 1 (51:00):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning, and asset protection.
This month, they're offering a free guide called Dmistifying the
Top seven estate Planning Trusts. This guide breaks down the
most common types of trusts, explains the pros and cons
(51:20):
of each, and helps you understand which might be right
for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(51:41):
the facts first. Call Cushing and Dolan now at eight
sixty six eight four eight five six ninety nine to
request your free copy or visit legal exchange show dot
com the proceeding Who's paid for in the views? Express
or sole leaders of Cushing and Dolin, Cushing and Dolan
ind or Armstrong Advisory may contact you're offering legal or
investment services. Cushing and Dolan and Armstrong Advisory do not
endorse each other and are not affiliated HI.
Speaker 6 (52:00):
This is Mike Armstrong from the Armstrong Advisory Group. When
it comes to legacy planning, having a will is important,
but it may not be enough. A will only covers
probate assets, and the probate process can be slow, public,
and expensive. That's where trusts come in. Trust can help
you avoid probate, keep your wishes private, and control how
and when your assets are distributed. Whether you're looking to
support family, minimize taxes, or prepare for the unexpected, a
(52:23):
well designed plan can make a meaningful difference. Our new
free guide Leaving a lasting legacy covers wills, trusts and
other strategies to help you build a strong retirement plan.
Take the first step towards clarity by calling eight hundred
three nine three for zero zero one right now and
asking for your free guide today. That number again is
eight hundred three nine three four zero zero one, or
(52:44):
requested online at Armstrong Advisory dot com.
Speaker 1 (52:47):
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. The holidays are just around the corner, so
now is the time to plan your winter escape. Trade
in the cold for sunshine, sea breezes and island vibes
(53:09):
in the US Virgin Islands, America's Caribbean paradise. Whether it's
a romantic retreat, a family celebration, or a solo recharge
before the new year, Saint Croix, Saint Thomas and Saint
John offer the ultimate warm weather getaway. Lounge on sun
drenched beaches, explore vibrant culture and celebrate the holiday's island style,
(53:31):
no passport, no hassle, just warm weather, clear blue water,
and unforgettable memories. This is where the stress melts away
and you find yourself naturally in rhythm with the heartbeat
of the islands. Go to visit usvii dot com and
book your trip today. That's visit USVII dot com the
US Virgin Islands, America's Caribbean paradise. Your holiday escape starts
(53:56):
here at visit usvii dot com.
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 the Legal Exchange with Todd Lutsky. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and I'm
joined by Todd Lutsky, a partner with a law firm
of Cushing and Dolan with a master's in taxation. Welcome Todd.
How are you today?
Speaker 3 (00:51):
I am never better in you?
Speaker 2 (00:52):
I am great? Thank you? What to have for us
this week?
Speaker 3 (00:55):
I've got two cases. We're going to go to Hawaii.
We've got a Supreme Court case why. Yeah, it's interesting.
It's simply a case where you know, a medicaid application
got denied, and it'll be interesting to see why and
how and basically how this medicaid application process works, because
we don't get into that a lot. So and also
(01:17):
of course why if they had done planning, they wouldn't
have had any of these problems. That's always another not judging,
but we're not judging, so that'll be very interesting and
I think educational. And then we head over to Montana,
so we're out west most. I got a Supreme Court
case out there dealing with you know, undo I basically
(01:37):
call this case undue influence is always lurking. It's always
lurking out there, and that's sort of what happens here
where there's some undue influence. But I think maybe the
better argument also might have been, you know, lack of capacity.
But again, the bigger problem is had you done this,
they were trying to protect a piece of property for
the daughter. Had you just set up a irrevocable trust,
(01:57):
I think you would have solved all of these problems
in this case, and we'll show you how.
Speaker 1 (02:01):
So.
Speaker 3 (02:02):
I think lots of interesting cases today which both of
them actually tie into the guide that we're giving away,
which is the Top seven estate planning trust Both of
these cases would have none would have gone away. I
think had we done trust planning. And again, the type
of trust planning for you is important. Don't know what
kind you need? This never done your estate planning. Here's
(02:24):
the top seven. Pick which one is right for you.
If you've done them and you think you need a
tweak or maybe it's time to review or change your
plan to a different kind of trust because you're older
or you have different life events. Get the guide. This
tells you from revocable to irrevocable to special needs trust,
pooled trust if you've got Medicaid situations. It explains multiple
(02:45):
kinds of irrevocable trusts and how they work and the
tax implications of having them. So great guide for everybody.
I think it's little something for everyone in this guide,
call and get it. Top seven estate Planning Trusts eight
six six eight four eight five six nine nine or
Legal Exchange Show dot Com again eight six six eight
(03:08):
four eight five six nine nine or Legal Exchange Show
dot Com. And now let's head over to Hawaii. So
this case is interesting. So it's I love the nursing
home name Aloha Nursing Home.
Speaker 2 (03:22):
Yeah, I picked out one. If I have to go into.
Speaker 3 (03:24):
One, I'm going there. So the Aloha Nursing Home accepts
Jane as a permanent resident on March twenty eleven based
on the Department of Health and Human Services approved Medicaid application.
So she's in Okay on Medicaid and husband was the
one helping her. He was the authorized representative when you're
(03:46):
filling out the forms. But in November of twenty twelve,
the husband lost capacity and the Aloha Nursing Home terminated
Jane's eligibility. Now, don't get confused. His his capacity should
have nothing to do with her Medicaid eligibility, and it
really didn't. But it terminated Jane's eligibility because they discovered
(04:10):
that the house they must be the state discovered that
the house was owned in a revocable trust. Come back
to that, Aloha never received any notice of termination from
the state. They only found out because the bills, of course,
weren't being paid by the state. So Aloha tried to
(04:32):
work with the family to get the house transferred out
of the trust, which is what you need to do.
But they had to no avail.
Speaker 4 (04:42):
Well.
Speaker 3 (04:44):
Aloha then decided to reapply for Medicaid, but was denied
because of they don't have financial eligibility. Why because you
didn't get the house out of the trust. Again, I'll
come back and explain the importance of the house, primary
residence and the trust situation in a minute. Okay again,
Department of Health and Human Services did not provide notice
(05:06):
of denial to Aloha Well. In June of twenty fourteen, finally,
Jane died Well. Aloha then met with the Department of
Health and Human Services saying I'm seeking payment from twenty
twelve when you terminated Medicaid until her death in twenty
fourteen because I did provide services, and the DHS said, sorry,
(05:32):
there was a mistake. She should have never been put
on Medicaid to begin with. Why the house situation, so
they said, you know, too bad, too bad for you. Well,
the court went back and forth, back and forth on
how the nursing home had no standing and was not
(05:53):
the authorized representative, not the applicant filing, you know, for
or helping the applicant file, so they really could not
even request the fair hearing right because they have no standing. Well,
They didn't like that, so they appealed. The Supreme Court said, ultimately,
we're going to reverse, and we reversed because the nursing
(06:14):
Home Aloha had a constitutionally protected property interest in its
reimbursement for the services it provided, It had due process rights,
and therefore it had standing to challenge this. So no
answer remanned to say.
Speaker 2 (06:32):
I don't enjoy that. You need to, but I'm glad
to see they pushed back on it. Yeah, because they
got an approval notice and they've been providing the services.
Speaker 3 (06:41):
And then you stopped, and then you know, and again
you at least got to give this nursing home the right.
So they did provide the service. They didn't kick you know,
mom out, They kept course they could have for free. Yep,
So I get it. I get it so early. What's
the issue here. It's really all about medicaid eligibility and
understanding how to do it in never applying on your own.
(07:02):
How many times have we said that, Yeah, people say, oh,
I can fill out the application. It's harder than.
Speaker 2 (07:06):
That because the house doesn't stop you from being eligible.
You just have to handle it the right way.
Speaker 3 (07:12):
Correct. Correct, So let's go through an example here. So
let's say you got this married couple. They have a house.
Let's say they got five hundred thousand investments, two hundred
and fifty in the bank, and two hundred and fifty
in the IRIS. We got a million bucks and a
million dollar home.
Speaker 2 (07:27):
Yep.
Speaker 3 (07:29):
First thing you need to deal with, right is the money.
Because to become financially eligible, there's a community spousal resource allowance.
So you reach into the million for the healthy spouse
in this case, I think it was the husband. You
pull out about one fifty seven and you give two
thousand to two approximately two thousand to the six spouse,
(07:49):
and there's your one, you know, fifty eight to fifty nine,
leaving us with what So you take the IRA, the
bank accounts, and the investment accounts minus the one P
fifty nine leaves you about eight forty one of money.
Speaker 2 (08:06):
Yep.
Speaker 3 (08:07):
So we've got eight hundred and forty one thousand dollars,
which is causing medicaid eligibility. I get it way over,
way over. So now you would simply tell the nursing
home or you tell your client a healthy spouse, we're
going to buy two annuities, one for his IRA and
one for the balance of the money that's not in
the IRA two medicaid annuities probably five year payout. Convert
(08:30):
them to an income stream and like magic, that's off
the table and the healthy spouse is getting a stream
of money.
Speaker 1 (08:37):
Good.
Speaker 3 (08:38):
I like it, But we're still denied because we have
this million dollar home sitting in the revocable trust. You
got to get it out of the revocable trust. Right.
If it's in the revocable trust, it's deemed non countable.
But if the healthy spouse is living there owns it,
now it I'm sorry, it's deemed countable in the revocable trust.
(08:58):
But if the healthy spouse is living there and owns it,
then there's no value limitation. It's automatically non countable and
non leanable.
Speaker 2 (09:05):
So even though it's in the revocable trust, is the
spouses the healthy spouses. Social doesn't matter, doesn't it's the
naming the owners owner.
Speaker 3 (09:14):
You're going to get screwed, and that's what happens. So
I think the nursing home is partly right here, but
they did make a mistake in approving it to begin with.
Speaker 5 (09:20):
Right.
Speaker 3 (09:20):
But but I mean I think the state's partly right yeah,
but they did make a mistake to begin with when
they when they applied. But this is why you hire people, right.
So now once it comes out, it's fine. And again,
if you're single, you can just check a box that
I intend to return home and it'll be non count
in case.
Speaker 2 (09:36):
That does it. They can't, but you could have all
the best of intentions.
Speaker 1 (09:40):
Good.
Speaker 3 (09:40):
The real news here is, folks, an irrevocable not revocable
trust should have been done from the beginning. At the
end of five years, it would have been all protected
and we wouldn't have been dealing with wondering whether we
have to take it out of the trust or not
take it out of the trust, or whether one spouse
gets sick or the other spouse gets sick later. It
would have just been protected. So, folks, plan very important,
(10:01):
and the right kind of planning is very important. So
when you're doing your planning, get this guide. The top
seven estate planning trusts are described to help you pick
which trust is right for you to do the right
planning eight six six eight four eight five six ninety
nine or Legal Exchange show dot Com excellent.
Speaker 2 (10:22):
Thank you Todd, you've been listening to Todd Lutski, a
partner with the law firm of Cushing and Dolan. I'm
Susan Power as a financial advisor with the Armstrong Advisory Group.
We've got much more to come when we return to
the legal exchange with Todd Lutsky.
Speaker 1 (10:37):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning and asset protection.
This month, they're offering a free guide called Demistifying the
Top seven estate Planning Trusts. This guide breaks down the
most common types of trusts, explains the pros and cons
(10:58):
of each, and helps you understand and which might be
right for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(11:18):
the facts first. Call Cushing and Dolan now at eight
sixty six eight four eight five six ninety nine to
request your free copy or visit legal exchange show dot com.
The proceeding was paid for in the views exprest Or
Sole leaders of Cushing and Dolan. Cushing and Dolan, ind
or Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and I'm Strong Advisory do not endorse
each other and are not affiliated.
Speaker 4 (11:38):
HI. This is Chuck Zada from the Armstrong Advisory Group.
If you have an IRA, it's critical to understand the
tax rules that may affect your family as you plan
for retirement. Current law requires most non spouse beneficiaries to
withdraw the full balance of an inherited I ray within
ten years, which may lead to higher taxes and reduced
value over time. If beneficiary designations are outdated are incorrect,
(11:58):
they could possibly override your will and change how your
assets are distributed. That's why we're offering a new guide
called Leaving a Lasting Legacy, a resource to help you
better understand inherited irays and other legacy planning topics that
could affect your future. Make an informed choice and take
control of your plan. Call eight hundred three nine three
four zero zero one and ask for your free guide today.
(12:19):
That's eight hundred three nine three four zero zero one
A request your copy online at 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 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 holidays are just around the corner, so now is
the time to plan your winter escape. Trade in the
cold for sunshine, sea breezes and island vibes in the
(12:48):
US Virgin Islands, America's Caribbean paradise, whether it's a romantic retreat,
a family celebration, or a solo recharge before the new year.
Saint Croix, Saint Thomas and Saint thank John offer the
ultimate warm weather getaway. Lounge on sun drenched beaches, explore
vibrant culture and celebrate the holiday's island style. No passport,
(13:11):
no hassle, just warm weather, clear blue water and unforgettable memories.
This is where the stress melts away and you find
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Go to visit usvii dot com and book your trip today.
That's visit usvii dot com the US Virgin Islands, America's
(13:31):
Caribbean paradise. Your holiday escape starts here at 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 sixty six eight four eight five six
ninety nine. That's eight sixty six eight four eight five
(13:52):
six ninety nine.
Speaker 2 (13:55):
Welcome back into the legally Change with Todd Lutsky. I'm
Susan Powers of financial Advice with the Armstrong Advisory Group,
and I'm joined by Todd Letsky, a partner with a
law firm of Cushing and Dolan with a master's in taxation.
What's going on in Montana? Did you say, uh, yes, yeah, Montana, Montana.
Speaker 3 (14:14):
We're heading over to Montana. It's this case I like
to call undue influences always lurking, right, and so planning
obviously is very important. So this case seems starts off
kind of normal. Like David, you know, he's the dad,
and he did a will in August of two thousand
in which he a will, by the way, not a trust,
(14:36):
did just a will where he devised his his house
to his only daughter, Wendy. In twenty seventeen, David's had
some health issues resulting in his you know, inability to
care for himself really independently. So interestingly enough, friends and
some family sort of assisted him for a while until
(14:56):
twenty twenty three when he killed himself and so yeah,
I know, well you just brought the party down, I know,
but well he died, okay, it just by suicide, so
we need to know that part. Wendy then began living
in the house because that's the daughter, and she's believed
that she was the owner, which made sense to me. However,
(15:18):
David David's brother Philip comes lurking and he claims that
David actually signed a deed in twenty eighteen conveying the
home to David upon date upon I'm conveying the hometown, Philip,
upon David's death. It's like a life estate deed, is
(15:38):
what I'm what.
Speaker 2 (15:39):
I'm thinking, she rather than his daughter.
Speaker 3 (15:42):
If there's a deed, there's a deed, right, So Philip
then issues and notice to Wendy to vacate. It's not
your house. Well, Wendy then files that quiet title action.
Speaker 2 (15:53):
Quiet tight, Yeah, I even talked about that.
Speaker 3 (15:56):
Yeah, we got to get good title. We got to
settle as to who the owner of this property really is.
That's really what that means. Well, Philip files a summary
judgment saying this is clear, there's no issue of material
fact here, it's my house, and the trial court grants
the summary judgment motion for the brother. Well, Wendy, as
you might imagine, wasn't happy with that, so she appealed.
(16:18):
Philip then shows the existence of the deed to him. Well,
that's pretty clear. Wendy then says, well, there's evidence here
showing of Dad's mental and physical illness. Remember he had
illness at the time of the deed, and evidence showing
that David, and evidence further evidence showing that David, her father,
intended to devise the home to her. Well, the Supreme
(16:40):
Court reversed, stating that well, clearly, with all this evidence
being prevented, there must be an issue, a genuine issue
of material fact here, So you need to go hear
the case.
Speaker 2 (16:53):
You did it again, shows in one week. That is
unacceptable Lutsky.
Speaker 3 (16:58):
So but I'm glad they did because that's exactly what
a summary judgment means. That there's no issue of material fact,
nothing to discuss. You win on the merits. Well, well,
after the presentation of this evidence, there certainly is some
concern about whether or not there's a material fact. So
the Supreme Court said, go to court and have a hearing,
(17:19):
which I like. But again, folks, I think this all
comes back to you know, in my head, if I'm
the father and I want to protect the house from
my daughter, I'm thinking an irrevocable trust might have been
the way to go, not a simple will, right, But folks,
it's all about doing your planning and figuring out what
trust is right for you. And that's why this guide
is the top seven estate planning trusts that I think
(17:40):
are used most frequently. Yes, from nominee realty trusts, which
are not really trusts. So you got to learn about
those irrevocable trusts, revocable trust and by the way, many
kinds of irrevocable trusts, a pool trust, special needs trusts,
but more importantly how they work your dos and don'ts
and the tax is that go along with him, the
(18:01):
tax benefits that go along with him. I say all
those things, but in reality, I just want you to
get started with your estate plan and help you pick
the right trust for you. Or if you've done your
planning and you want to revise it, this will help
you pick whatever the new trust might be for you.
So call and get it eight six six eight four
eight five six nine nine or Legal Exchange Show dot com.
(18:24):
Top seven estate Planning Trusts eight six six eight four
eight five six nine nine or Legal Exchange Show dot com.
So what do we learn from this, Well, let's go
through your uncle. Well, this is the undo. This is
the lurking, undoing lange. So I say, I say, okay,
what is undue influence? Undue influences. Phillip in this case
(18:49):
likely took David the brother to the attorney, probably picked
out the attorney to use, and was probably present during
the transaction. And at the end of the transaction Philip
had way more than he had before the transaction was done.
By the way, that is the definition of undue influence. Yeah,
(19:14):
I mean, that is classic definition of undue influence. And
I feel like that's probably what happened.
Speaker 2 (19:20):
Here and meanwhile, the dart is taking care of him.
Probably not cool, Uncle Phil.
Speaker 3 (19:26):
Yeah, that's exactly right. Well, interesting that they didn't make
that argument. They talked more here about lack of capacity.
Remember that's what they brought up, because it did say
that in twenty seventeen, David did have some health issues
resulting in his inability to care for himself independently. I
don't know if that which may not be cognitive exactly
(19:49):
Susan exactly so, But I'm not really sure where they
went with that. But they were more about lack of capacity,
which is you need to produce in this case, to
get lack of capacity, you need to produce health records
showing what this person's level of cognitive capacity is to
prove that it didn't exist when the document was signed. Now, note,
(20:14):
here's why I'm not excited that they went down this road.
And by the way, maybe they won't remember this is
going to be remanded. When they remand it, maybe they'll
really focus on both of these arguments, not just the
lack of capacity, which I think they need to do.
And here's why, because I look at this and I say, well,
he signed that deed in twenty eighteen. Well, he only
(20:38):
began having health issues in twenty seventeen. It could have
been let's say it was dementia. It might have been
early dementia. He might have absolutely still had testamentary capacity
at that time, and so the deed could have been
valid under the capacity argument.
Speaker 1 (20:59):
Right.
Speaker 3 (21:00):
So, well, I think you will need to bring up
the capacity argument in the litigation that's going to follow here.
I think you can't ignore undue influence, which seems to
be the the you know, running right in the square
in the face of undue influence. I think that's your
stronger argument here. Anyways, the bigger issue is how do
(21:25):
we just not be in this situation? Ever? Well, why
wouldn't we have just set up an irrevocable trust. David,
you said you wanted this house to go to your daughter.
Maybe you want to protect it for your daughter. Why
not set up an irrevocable trust right from the get go.
Put the house in that way. You know it's going
to be protected from the nursing home in case he
gets sick, which, by the way, he did. Maybe it
(21:48):
didn't result in a nursing home, but he did, right
get sick, and so you know this would have actually
eliminated that whole concern probate nursing home. And I know
now it's protected from my daughter and number one.
Speaker 2 (22:03):
And if when he was doing that, Todd, if he
had any concerns about a brother lurking, or even about
his daughter, he could have had an impartial third party
be the trustee right to protect.
Speaker 3 (22:17):
In this case, let's say he had no trouble with
his daughter. So what will you do is Secondly, the
trustee on this irrevocable trust could have been the daughter.
And if it was the daughter as trustee, therefore, in
order to get the house out of the trust, the
trustee daughter would have had to sign the deed to
get it out. And then it can only come out
(22:39):
to certain people listed in the document.
Speaker 2 (22:42):
And it's not going to be Uncle Phil and it's.
Speaker 3 (22:44):
Not going to be Uncle Bill. So this would have
absolutely not only protected it from probate in the nursing home,
I really think, and not in all cases, but in
this case, I think it would have really protected it
from ever being unduly influenced to take make it to
uncle Bill.
Speaker 2 (23:01):
It's about the family for you, in your family.
Speaker 3 (23:04):
So you know, I think you really have that kind
of a check in balance when you do this. Now,
you know, even in this case, if the donor's daughter,
I'm sorry, if the power of the power to remove
and replace the trustee was in there, even then the
daughter would be removed and say hey, what's going on.
It would be a notice. It would be a wake
up call. Folks, planning is better. Learn what type of
(23:27):
trust is right for you to stay out of these situations.
Eight six six, eight four eight five six nine nine
or Legal Exchange show dot com.
Speaker 2 (23:36):
You've been listening to Todd Lutsky, a partner with a
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group, and Todd will
be answering your listener questions next when we return to
the Legal Exchange with Todd Lutsky.
Speaker 1 (23:52):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning, and asset protection.
This month, they're offering a free guide called Demistifying the
Top seven estate planning trusts This guide breaks down the
most common types of trusts, explains the pros and cons
(24:13):
of each, and helps you understand which might be right
for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(24:33):
the facts first. Call Cushing and Dolan now at eight
sixty six eight four eight five six ninety nine to
request your free copy, or visit legal exchange show dot com.
The proceeding's paid for in the views express or sole
leaders of Cushing and Dolin, Cushing and Dolan, d or
Armstrong Advisory may contact you're offering legal or investment services.
Cushing and Dolan and I'm Strong Advisory do not endorse
each other in or not affiliated. The holidays are just
(24:54):
around the corner, so now is the time to plan
your winter escape. Trade in the cold for sunshine, sea
breezes and island vibes in the US Virgin Islands, America's
Caribbean Paradise, Whether it's a romantic retreat, a family celebration,
or a solo recharge before the new year. Saint Croix,
Saint Thomas, and Saint John offer the ultimate warm weather getaway.
(25:17):
Lounge on sun drenched beaches, explore vibrant culture, and celebrate
the holiday's island style. No passport, no hassle, just warm weather,
clear blue water, and unforgettable memories. This is where the
stress melts away and you find yourself naturally in rhythm
with the heartbeat of the islands. Go to visit USVII
(25:37):
dot com and book your trip today. That's visit USVII
dot com the US Virgin Islands, America's Caribbean paradise. Your
holiday escape starts here at visit USVII dot com.
Speaker 5 (25:52):
This is Michael Valila, adjuedent 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
(26:13):
American heroes as well by making a donation today by
visiting dav five k dot Boston. That's dav five k
dot Boston.
Speaker 6 (26:22):
Hi, this is Mike Armstrong from the Armstrong Advisory Group.
When it comes to legacy planning, having a will is important,
but it may not be enough. A will only covers
probate assets, and the probate process can be slow, public,
and expensive. That's where trusts come in. Trust can help
you avoid probate, keep your wishes private, and control how
and when your assets are distributed. Whether you're looking to
support family, minimize taxes, or prepare for the unexpected, a
(26:46):
well designed plan can make a meaningful difference. Our new
free Guide Leaving a Lasting Legacy covers wills, trusts, and
other strategies to help you build a strong retirement plan.
Take the first step towards clarity by calling eight hundred
three nine three for zero zero one right now and
asking for your free guide today. That number again is
eight hundred three nine three four zero zero one, or
(27:07):
request it online at Armstrong Advisory dot com.
Speaker 1 (27:10):
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 Todd will answer
your questions about anything and everything that's included in the
(27:32):
estate planning process. Once again, here's Todd Lutsky and Susan Powers.
Speaker 2 (27:39):
Welcome back Todd. A few questions from listeners for you.
First question comes from Bonnie in Grafton, mass And Bonnie writes,
I am married, but my name is not on the
deed to the house. Only my husband's name is. Does
my name need to be on the deed to avoid
probate if my husband passes away. We've been married for
over twenty years, but he does have chill from a
(28:00):
prior marriage. So what happens if the husband dies and
she's not on that d Yeah.
Speaker 3 (28:08):
So I love when people come in all the time
and they say, let's not even use a husband wife situation.
They go, well, you know, I got this house that
I that I you know, I sort of it's my
son's house, but but you know I bought it and
but it's my son's go. But but whose name's on it?
Speaker 1 (28:25):
Right?
Speaker 3 (28:25):
My name? Well it's not your sons, then right doesn't
have right, you know, it's it's not your saying, but
we have this agreement. But agreements for real estate don't
matter because of something called the Statute of Frauds. Anything
that deals with real estate must be in writing if
you want it enforced. You can't say I orally said
this is going to happen or that's going to happen.
Does not work violate something called the Statute of Frauds.
(28:48):
So so you got to remember these little side deals
that everybody has in their head really doesn't matter. Okay,
when you die, it only matters as to how it's owned.
So in this case, how is it owned? Seems like
it's owned in husband's name only. And by the way,
it's not uncommon that, you know, especially in the older days,
(29:10):
you know one person's name is on the property.
Speaker 2 (29:14):
And in this case it was a second mag they've
been together for a long time, but he does have
kids from a primary So.
Speaker 3 (29:20):
Now what it doesn't say in here is anything about
a will or an estate plan for them.
Speaker 2 (29:27):
Doesn't sound like they've done anything. If the house is
still in his name.
Speaker 3 (29:30):
Yeah, so let's assume nothing was done, not even a will. Right, Well,
when he dies, it is absolutely going to go to probate.
So the first question is does it avoid probate? No,
it does not. It's going to go to probate. And
now where is it going to go? Well, if it's
in his name alone, it's not automatically going to go
(29:52):
to the spouse like it would if it was joint right,
what I think she's asking about here, If you put
a joint name on it, you would get the avoidance
of probate and the operation of law. It would move
to the to the surviving joint owner. The problem you
have here is with no will in a second marriage.
(30:12):
You have to look at the statute. Because every statute
every state is different. So when you have second marriages,
I believe half goes to the kids of the prior
marriage and then something goes to the spouse. I don't
know how they divide it. I don't know if you
get like a life estate for the wife or ematic.
(30:34):
It's definitely going to be a problem. Now, if it's
first marriage, it's not so bad. But if it's second marriage,
then you have to consider the kids from the second
marriage right away. So, yeah, this is a problem.
Speaker 2 (30:50):
So what should they do?
Speaker 3 (30:52):
So I think they should do sit down with a
lawyer and doing a state plan. I mean, there's a
whole state plan.
Speaker 1 (30:56):
You.
Speaker 3 (30:56):
You have more than probate and tax reasons to plan here.
You've got two families that need to be taken care
of and make sure that we not only provide for
each other, but we provide for both sides of the
family without one sort of screwing the other one if
one dies. Okay, So lots to do here from a
(31:17):
planning perspective. But again, the type of trust and the
type of plan they put together, the type of trust
they need is really going to be driven by their
family dynamics and their wishes. How will they know? They
need to get this guy the top seven estate planning
trusts so that they can pick which kind of trust
is right for them. But I say that for them,
for you, for everybody listening. If you've not done your planning,
(31:40):
this guide is going to help you figure out which
kind of trust works for you, how they work, the taxes,
the dos and don't swell you're living and when you
pass call and get It eight six six eight four
eight five six nine nine or Legal exchange show dot com.
The top seven estate planning trusts eight six six eight
(32:02):
four eight five six nine nine or Legal exchange Show
dot com.
Speaker 2 (32:08):
Our last question comes from William in Middletown, Connecticut, and
William writes, my mother and stepdad have a revocable trust
written thirty plus years ago in Connecticut, and then they
relocated to Florida. Their house in Florida is not in
their trust. My stepdad passed away three years ago. Would
my mother now be able to create a new trust
(32:30):
in Florida. Well, I think there's a lot more going
on here than that question.
Speaker 3 (32:36):
That's the easy question.
Speaker 2 (32:38):
So will it avoid probate?
Speaker 3 (32:40):
So so, I think the first problem we have is
I wonder how that Florida trust Florida property was owned.
Oh did that happen?
Speaker 2 (32:47):
Maybe they moved after so maybe they bought it together and.
Speaker 3 (32:51):
Then and so he died in that they already owned that.
Speaker 2 (32:54):
House, yes, correct, but not in the trust.
Speaker 3 (32:57):
If that house was owned jointly. We just talked about
that and it would have just went to the wife
who's still living, and the wife can do what she
wants with it, she can create her own trust and
put that property into it because it's hers. If it
was jointly owned, it's hers, and again it would have
avoided probate. And now it's time for her to plan
(33:18):
and protect it.
Speaker 2 (33:19):
Is there a reason why she couldn't put it into
the revocable trust that they did together thirty plus years ago.
Speaker 3 (33:25):
Yeah, yeah, there is because at the time when someone dies,
that trust becomes irrevocable, right, and so that's when you
create the marital share and the remainder share, and you
can't really just fund it. Well, I guess if there's
a marital bucket, she could perhaps put it into the
marital bucket, as long as the marital bucket is going
(33:47):
to be included in her estate when she dies. It'll
depend on what elections were made at the date of
death in terms of q TIP elections for tax purposes.
But again by the same token, I would say, even
if you could do that, I might say, well, you
did a revocable trust way back thirty years.
Speaker 2 (34:05):
Thirty plus years ago. They're older now for sure.
Speaker 3 (34:08):
You're much older exactly, Susan. I would be like, maybe
you should take that Florida property stick it in an
irrevocable trust since you already own it, get it protected
from the nursing home if that's now on your LISTEP
and then go back and revisit the joint revocable trust
(34:29):
that you had that's now irrevocable, and see if you
can do a disclaimer of principle in those trusts so
that those assets are still sheltered from estate taxes when
the survivor dies. But by turning off the right to
principle in that trust, which is the disclaimer, it starts
(34:52):
a five year waiting period for medicaid on those assets.
Speaker 2 (34:56):
So she wouldn't have to empty out those trusts.
Speaker 3 (34:59):
Correct, right, because if she did, then it's just subjecting
it to a state taxes when the survivor dies. Again,
so very important in a situation like this, And this
is another reason why when one spouse dies, you need
to call your lawyer. You need to say what do
I do now? Remember you set this up because you
(35:21):
wanted to take advantage of tax savings, probate savings, bloodline planning.
In order for that to happen when one dies, you
need to call up to effectuate that, to take the
documents that you paid for and make the plan happen.
So in this case more is going on than just that.
(35:46):
So here not only do I want to figure out
what to do with assets that mom has in her
own right, but what do I do with the old trust?
So where that's where this disclaimer comes in.
Speaker 2 (36:00):
So now Todd, we're just thinking, I know they're in Florida,
but in Massachusetts, where you have a two million dollar
per person exemption, do you find that you're doing more
joint irrevocable trusts at this point? So there's stuff that
has to be done when someone dies, right, absolutely, yeah, So.
Speaker 3 (36:18):
Do I do more joint trust? I do more joint
revocable trusts mainly because the federal exemption is so high. Right,
that's the sort of driving factor in when I do
one revocable trust versus versus two got to go trust.
So in the good news now is with the exemption
(36:41):
approaching fifteen million come twenty twenty six, more and more
people can do one joint trust and they are really
a great way to go folks. That's in the guide.
That's one of the revocable trusts in the guide. So
learn about revocable irrevocable get the trust to see what
trust is right for you eight six six eight four
(37:03):
eight five six nine nine or Legal Exchange Show dot com.
Speaker 2 (37:08):
If you have a question you'd like to ask Todd,
visit his website Legal Exchange Show dot com and click
on the ask Tod tap. 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 in Dolan. I'm Susan Powers,
(37:29):
a financial advisor with the Armstrong Advisory Group. We'll be
back with more after this quick break on the Legal
Exchange with Todd Lutsky.
Speaker 1 (37:38):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning, and asset protection.
This month, they're offering a free guide called Demistifying the
Top seven estate Planning Trusts. This guy breaks down the
most common types of trusts, explains the pros and cons
(37:59):
of each hand helps you understand which might be right
for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(38:19):
the facts first. Call Cushing and Dolan now at eight
six six eight four eight five six nine nine to
request your free copy, or visit legal exchange show dot com.
The proceeding was paid for in the views exprest Or Sole,
leaders of Cushing and Dolan. Cushing and Dolan, d or
Armstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and I'mstrong Advisory do not endorse each other,
in or not affiliated. The holidays are just around the corner,
(38:41):
so now is the time to plan your winter escape.
Trade in the cold for sunshine, sea breezes and island
vibes in the US Virgin Islands, America's Caribbean paradise, whether
it's a romantic retreat, a family celebration, or a solo
recharge before the new year. Saint Croix, Saint Thoma and
Saint John offer the ultimate warm weather getaway. Lounge on
(39:04):
sun drenched beaches, explore vibrant culture, and celebrate the holiday's
island style. No passport, no hassle, just warm weather, clear
blue water and unforgettable memories. This is where the stress
melts away and you find yourself naturally in rhythm with
the heartbeat of the islands. Go to visit USVII dot
com and book your trip today. That's visit USVII dot
(39:28):
com the US Virgin Islands, America's Caribbean paradise. Your holiday
escape starts here at visit USVII dot com.
Speaker 4 (39:38):
Hi, this is Chuck Zada from the Armstrong Advisory Group.
If you have an IRA, it's critical to understand the
tax rules that may affect your family as you plan
for retirement. Current law requires most non spouse beneficiaries to
withdraw the full balance of an inherited I ray within
ten years, which may lead to higher taxes and reduced
value over time. If beneficiary designations are outdated are incorrect,
(39:59):
they could possibly override your will and change how your
assets are distributed. That's why we're offering a new guide
called Leaving a Lasting Legacy, a resource to help you
better understand inherited iras and other legacy planning topics that
could affect your future. Make an informed choice and take
control of your plan. Call eight hundred thirty nine three
four zero zero one and ask for your free guide today.
(40:19):
That's eight hundred three nine three four zero zero one
A request your copy online at Armstrong Advisory dot com.
Speaker 1 (40:26):
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. 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
(40:47):
eight five six nine 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 (40:59):
Welcome back in 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
masters in taxation. So, Todd, you've got seven trusts in
this guide. Two of them I want to focus on
today are in the special needs world, so special needs
(41:21):
trust and sole benefit types of trust. So I know
that there are different types of special needs trust what
are the most common ones?
Speaker 3 (41:31):
So I guess that the two special needs trusts that
you would have would be I'm trying to think like
a self settled special needs trust.
Speaker 1 (41:42):
Right.
Speaker 3 (41:42):
That would be one likely where your child perhaps or
the individual was not disabled at birth.
Speaker 2 (41:49):
Yep, but had an accident, maybe got injured.
Speaker 3 (41:52):
Yeah, some kind of an accident occurred, and this child
now is disabled, this person is disabled, and they get
like a settlement, you know, and so here comes a
chunk of money. Well, this person either the court establishes
the special needs trust, the person, the injured party, disabled
party as long as they're competent and can do it,
(42:13):
establish it, or the parent or guardian establish the self
settled one self settled because it's the disabled person's money yep,
that's being used to fund it.
Speaker 2 (42:24):
Got it.
Speaker 3 (42:26):
A third party special needs trust is the parents doing
their own estate plan, and usually inside their revocable or
irrevocable trust, depending on what kind of planning they're doing,
says what happens when they both die, and when they
(42:47):
both die, there's usually buckets created for children. One of
the children's buckets would be this special needs trust bucket, right,
And that's a third party trust, okay, because it's funded
by them.
Speaker 2 (43:03):
Okay. So I know I have run into folks through
the course of working that have created a special standalone
special needs trust for their child where they haven't received
a settlement, but the parents created it and they may
have put money into it themselves, but that's done during
(43:24):
their life. It sounds like the language in the trust
that you're mentioning would be funded at death versus them
funding it during their lifetime.
Speaker 3 (43:34):
Correct, So while third party trust on both cases.
Speaker 2 (43:38):
But okay, correct, So why would you do one way
versus the other?
Speaker 3 (43:42):
So I don't see what you just said. That often
I don't see parents coming in to do an estate
plan and saying I do see it. It's just not
as often where they say we've already established, you know,
a special needs trust for our child, and we got
(44:03):
an ID number, and we got bank accounts and there's
money in it. Can you do that? Yes, that's what
you just described. Yes, I just the only reason I
can see to do that would be if you also
have aunts and uncles and grandparents and other people who
(44:24):
want to take care of this special needs person and
they want to contribute, so they can contribute now through
the years to this standalone trust. If you don't really
have people waiting in line to do that, I don't
(44:45):
need it if I'm the parent. Because I'm the parent,
I can just provide directly while I'm alive for my
special needs child. I don't need to put it in
a separate bucket to have the trust bucket provide for them.
I just do it myself.
Speaker 2 (44:58):
Because I know there are lots of grandparents out there
that have put language into their own trust documents that
special needs language for a grandchild, right, they can do
that as well.
Speaker 3 (45:09):
I'm different sort of, and that's sort of the idea
of Now grandparents are saying, I need to take care
of my kids and my grandkids, so I have it
set up. We're inside their trust, which is that third
party trust they create a special needs share for that
particular child or grandchild. Yeap, oh, absolutely right. So folks,
(45:30):
that's just one of the seven kinds of trusts that
are in this guide, and they explain from revocable to
irrevocable to pool trusts. More importantly, no many realty trusts.
Oh my gosh, those are a disaster. But got to
read them because a lot of people have them. This
guide is great for you to get started to pick
(45:52):
the right trust for your situation. And if you've already planned,
to review your plan and see if a different kind
of planning strategy maybe you've gotten older and you want
to switch, is right for you. So call and get
a top seven estate planning trusts eight six six eight
four eight five six nine nine or Legal Exchange Show
(46:16):
dot com again eight six six eight four eight five
six nine nine or Legal Exchange Show dot Com.
Speaker 2 (46:24):
Okay, so let's just compare the self settled in the
third party because those are probably the most common types
that yes, we see and you see throughout the course
of your business. So if you have a self settled trust,
that means there's money already in it. And let's say
mom or dad or both of them have passed away.
So now there's money in this third party trust that
(46:45):
share for that special needs child. What's the difference between
the two in terms of what the funds can be
used for, like they would if they're living like already
in like a group home or something like that. What
happens to benefits things like that, Like operationally, how does
that function?
Speaker 3 (47:02):
The good news is, operationally there's no difference. But payback
there's a difference. So let me explain.
Speaker 2 (47:09):
You don't like payback.
Speaker 3 (47:10):
I know you don't like that sound of that.
Speaker 2 (47:12):
I don't like that word.
Speaker 3 (47:13):
So two things. The two trusts generally are going to
have the same language and saying things like the trustee
of the trust, either one self settled or or third party.
The trustee holds the assets in trust for the benefit
of the disabled individual. The trustee and its sole discretion,
(47:39):
can make distributions to this child for any reason or
no reason or not at all. That way, you don't
have to guess why they need it or how much
they need it covers everything. The key is that the
child doesn't own it, and therefore the child benefits are
(48:01):
not disrupted during life. Right, Yeah, So if they owned
it and they were an asset based benefit, they would
go over over assets.
Speaker 2 (48:11):
Right if they're getting those benefits.
Speaker 3 (48:12):
So in this case, it protects it keeps them on
governmental benefits, but enhances their life through these discretionary distributions.
Got it.
Speaker 2 (48:21):
So do you need to have a special type of trustee,
Like do you need like a professional trust corporation kind
of thing, or you.
Speaker 3 (48:27):
Could put a child on that, maybe a sibling who
knows that person's needs and things like that. Yeah, I'm
not really worried about like divorce proofing it here, right,
So so no, you probably wouldn't have to go the
independent route.
Speaker 2 (48:39):
Yep.
Speaker 3 (48:41):
However, the difference between the two self settled versus third party. Remember,
the child is receiving these benefits during life. In a
self settled trust. If the child has received thousands and
thousands of dollars of benefits from the state, when they die,
whatever is left in the trust that they have not used,
(49:05):
there's a payback provision to the state. How much is
left in the trust? How much do I owe the state?
Speaker 6 (49:12):
Right?
Speaker 3 (49:12):
You gotta give it to him?
Speaker 2 (49:13):
And how about the third party that's funded by a
mom and dad's death? Are grand?
Speaker 3 (49:18):
Third party trusts have no payback provision. So in this case,
whatever is left after the child passes is generally directed
either to that child's children, the grandchildren if any, or
to the sibling, the other children, the other donors children.
Speaker 2 (49:38):
And you can decide where those funds go when that
special needs child passes away.
Speaker 3 (49:42):
It's listed right awayhen you got created. Yeah, when you
create the document, you put that language in there.
Speaker 2 (49:48):
So big difference for those folks out there that didn't
think that they could. Like let's say they have two
kids and they thought, I'm just going to leave everything
to my daughter because my son is special needs, She'll
take care of them. That's not what you'd recommend.
Speaker 3 (50:02):
I don't. I don't recommend that at all, mainly because
there's tax issues that every time you make it it's
a gift to the kid by the daughter. There's creditor issues,
divorce issues for the dot. I mean, you don't want
you don't want to go down that road. If you
can help it, I would just set up the trust
and don't just have it provided for by the child. Folks.
(50:22):
Top seven estate planning trusts. Find out which one's right
for you, and find out what how to get started
in your estate plan eight six six eight four eight
five six nine nine or Legal Exchange show dot com.
Top seven estate Planning Trusts eight six six eight four
eight five six nine nine.
Speaker 2 (50:44):
Todd Lutsky from the law firm of Cushing and Dolan,
thank you so much.
Speaker 3 (50:48):
Thank you, Susan. Always a pleasure.
Speaker 2 (50:49):
I'm Susan Powers, a financial advisor with the Armstrong Advisory Group.
We thank you for joining us and we'll be back
again next week on the Legal Exchange with Todd Lutsky.
Speaker 1 (51:00):
A trust isn't just a document. It's a powerful tool
that can help protect your assets from the nursing home
and even reduce or eliminate a state taxes. Cushing and
Dolan are leaders in elder law, estate planning, and asset protection.
This month, they're offering a free guide called Dmistifying the
Top seven estate Planning Trusts. This guide breaks down the
most common types of trusts, explains the pros and cons
(51:20):
of each, and helps you understand which might be right
for you and your family. Trust come with different rules, benefits,
and tax treatment, and choosing the wrong one could cost you.
Learning the differences now can help you make smarter decisions
for your future and your loved ones. Trusts are a
critical part of any well designed estate plan, but they
can be complex. Don't guess your way through it. Get
(51:41):
the facts first. Call Cushing and Dolan now at eight
sixty six eight four eight five six ninety nine to
request your free copy or visit legal exchange show dot
com the proceeding Who's paid for in the views? Express
or sole leaders of Cushing and Dolin, Cushing and Dolan
ind or Armstrong Advisory may contact you're offering legal or
investment services. Cushing and Dolan and Armstrong Advisory do not
endorse each other and are not affiliated HI.
Speaker 6 (52:00):
This is Mike Armstrong from the Armstrong Advisory Group. When
it comes to legacy planning, having a will is important,
but it may not be enough. A will only covers
probate assets, and the probate process can be slow, public,
and expensive. That's where trusts come in. Trust can help
you avoid probate, keep your wishes private, and control how
and when your assets are distributed. Whether you're looking to
support family, minimize taxes, or prepare for the unexpected, a
(52:23):
well designed plan can make a meaningful difference. Our new
free guide Leaving a lasting legacy covers wills, trusts and
other strategies to help you build a strong retirement plan.
Take the first step towards clarity by calling eight hundred
three nine three for zero zero one right now and
asking for your free guide today. That number again is
eight hundred three nine three four zero zero one, or
(52:44):
requested online at Armstrong Advisory dot com.
Speaker 1 (52:47):
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. The holidays are just around the corner, so
now is the time to plan your winter escape. Trade
in the cold for sunshine, sea breezes and island vibes
(53:09):
in the US Virgin Islands, America's Caribbean paradise. Whether it's
a romantic retreat, a family celebration, or a solo recharge
before the new year, Saint Croix, Saint Thomas and Saint
John offer the ultimate warm weather getaway. Lounge on sun
drenched beaches, explore vibrant culture and celebrate the holiday's island style,
(53:31):
no passport, no hassle, just warm weather, clear blue water,
and unforgettable memories. This is where the stress melts away
and you find yourself naturally in rhythm with the heartbeat
of the islands. Go to visit usvii dot com and
book your trip today. That's visit USVII dot com the
US Virgin Islands, America's Caribbean paradise. Your holiday escape starts
(53:56):
here at visit usvii dot com.
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