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 Legal Exchange with Todd Latzky. 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?
Speaker 3 (00:53):
I'm never better in you?
Speaker 2 (00:54):
I am great? Thank you. Ay have for us this week, got.
Speaker 3 (00:57):
A couple of cases we're going to go. It's actually
a Southern District of Ohio case where we're dealing with
a second marriage, a prenup and then changes that happen
after a prenup, and is the prenup enough to handle
divorce and dying? I think people mix up the two, Yeah,
(01:17):
a lot, and I think we need to clear that
up a little bit in this Southern District of Ohio
case and the planning that goes along with it. And
then we head over to Nevada where we have a
Supreme Court case where it deals with trust sitis and
no contest clauses. So what is that? So trust citis
is generally where the court what laws govern the trust.
Speaker 2 (01:39):
Like if you live in Massachusetts mass laws and you
move to Florida, then Florida does well.
Speaker 3 (01:44):
Maybe how do you do that? And how do you
change citis? And can you do it? And does it
affect a no contest clause? And is one state governing
no contest clause is different than another state? Yeah, it
should be interesting. And is there a way to ask
for a change of citis without triggering a no contest clause?
Stay tuned.
Speaker 2 (01:59):
I want an iron clad no contest, no shenan against
for these boys.
Speaker 3 (02:04):
But folks, these are just some of the issues that
come up in estate planning. And when we're talking about
estate planning, one of the bigger issues that come up
is how to deal with things like an IRA and
life insurance. So seem to be two problematic assets that
nonetheless are part of your estate and you have to
deal with them. So if you are thinking about protecting
(02:24):
assets from the nursing home, and you are doing your
estate planning, so you want to do both estate tax
planning and nursing home planning at the same time, and
you have an IRA, this guide is for you because
it's going to show how you can name the beneficiary
of your IRA your estate, how to do it, when
to do it, and why you can get not only
(02:46):
a state tax savings from the IRA, but also a
fifty percent chance i'm going to say, of protecting it
from the cost of long term care, which is not
hard to do with an IRA, and you can do
the same thing with life insurance. But with life insurance,
as soon as you die, it goes into a testamentary
trust and then it would be protected from the cost
(03:08):
of long term care. And yes, the trust testamentary trusts
are explained in here as well. Folks. I can't say
enough about the guide eight six six eight four eight
five six nine nine or Legal Exchange show dot com.
Name your estate, the beneficiary of your IRA, and why
it's important eight six six eight four eight five six
(03:30):
ninety nine or Legal Exchange show dot com. Let's head
over to Ohio, the Southern District of Ohio. So we
have Alex and Joanne who get married in June of
two thousand and eight. By the way, I'll just throw
out that he's fifty eight years old and she's eighty one,
(03:51):
So just yeah, a little little age difference there. And
the prenup is done, and the prenup states that Alex
would get Joanne's Florida condo following Joanne's death. I remember
she's the eighty one year old in exchange for his
waiving his spousal rights down the line against a will.
(04:12):
So he's giving up the right to challenge his forced
rights as a spouse in exchange for getting this hospital. Well,
in twenty fifteen, Joanne executes a will which followed the
terms of the prenup. Makes sense, house goes to Alex
twenty twenty. She starts to have some decline. Remember she
(04:35):
was eighty one way back when so twenty twenty, she's
like ninety something. Now, okay, she suffers a fall, and
in twenty twenty three, Joanne's adopted daughter rekindles the relationship.
Convenient adopted, not step will make a distinction of that
going forward. Then Joanne starts involving herself, you know, in
(04:59):
Joanne Laurie I'm sorry, starts out involving herself in Joanne's
legal financial, medical affairs. Joanne begins making changes to her
own estate planning documents. Well I'm not sure she's doing
it on her own. So the documents then come out.
There's a new power of attorney appointing Laurie the daughter,
a condicil to the will done.
Speaker 2 (05:20):
So she's still married at this point, right, oh yeah, yeah.
Speaker 3 (05:23):
Okay, a codicil to the wills done, appointing the condo
to Laurie. Ooh oh boy. And then indeed is executed
by Laurie as power of attorney for Joanne, transferring the
condo to Laurie's new trust that I'm sure benefits Laurie,
(05:44):
or condo to not Laurie's new trust, but to Joanne's
new trust, which probably benefits Laurie.
Speaker 1 (05:52):
Well.
Speaker 3 (05:52):
February twenty twenty four. About a year later, Joanne dies
Alex then files a declared judgment seeking for enforcement of
the prenup, which makes sense. Lourie files a motion to dismiss,
saying he failed to state a claim. The District Court
denies Lurie's motion, stating that you know, if a contract
(06:12):
exists and it's unambiguous, then the court consider emotion to dismiss.
But it found the terms of this this prenup to
be ambiguous and sufficient facts were pled to survive the
motion to dismiss. Send it back and let's find out
who gets what here. So I don't give you no
answer one.
Speaker 2 (06:33):
I told you about these cases that just never ending
stories over here.
Speaker 3 (06:38):
So this one is another no answer case and it
got to go back. But it makes sense. I mean,
you can't file emotion to dismiss. You've got to address
the prenup here. But folks, the tips and lessons we
want from this is, you know, whenever you have a
second marriage, clearly you got to get your estate plan
in order, right. You got to make sure you put
your estate plan together. And by the way, pups generally
(07:00):
covered divorces doesn't always need to cover estate planning or death,
but it covers divorce.
Speaker 2 (07:07):
Yeah. See, I never knew a prenup could cover anything
but a divorce.
Speaker 3 (07:11):
Yeah, And there's some gray area here, right, so you
should always, like I say, get your state plan in
order after a second marriage. Now, remember, Joanne could have
provided if she did her planning, got her plan updated,
that the house can be held in trust. Where was
the trust earlier, Joanne? Yeah, then you know, a year
(07:31):
before you died, could either go to Alex or in
the event, it could be held in trust for Alex,
provided he pays all the expenses, and then it could
go to the adopted daughter later. M hm. So you
could take care of that. Well, that's a problem, you
might say, because Todd, there's a huge age difference. It's
possible that the daughter is the same age as the stepfather, but.
Speaker 2 (07:52):
She already agreed to give him that place as part
of their prena.
Speaker 3 (07:56):
I know. And that's but I'm just playing out some facts, right,
So even if there was an age difference, they could
have agreed otherwise to say, the house goes directly to Alex,
but give all the money to the daughter right now
so that she doesn't have to wait as long, Yeah,
to get something, and the stepfather has a place to
live and taking care of which kind of makes sense
(08:18):
because even if is your stepfather, and what are you
gonna do make this guy homeless? I mean, it's kind
of if that's where they're living, then that's where they're living.
The bigger problem I have here is, yes, I would
say absolutely argue that you got to enforce the prena,
But where's the undue influence argument?
Speaker 2 (08:34):
Yeah, you're not kidding.
Speaker 3 (08:36):
I mean it seems to me that this is clear
under influence. The daughter has a fiduciary relationship because she's
the daughter, helps mom change her estate planning documents. M
H gets herself appointed power of attorney, then suggests a trust.
Then actually, as power of attorney, transfers the deed to
the trust. At the end of the day, she has
(08:58):
more assets than she would have ever had. While that
is the definition of undue influence, and she had been
estranged before eh, mom was on the deathbed. So it's like, yeah,
I agree, force pseudo and force suprenup agreement because that's
a contract. But it would seem to me that if
you challenge the validity of the documents because of undue
(09:22):
influence and those documents are no longer any good. Then
you fall back to the old will that was good,
and that will gives him the house, right, So I
think he's probably gonna win this because maybe in the
remand during the case that we're not hearing yet, he
will make these undue influence arguments. And just lastly, remember, folks,
(09:45):
step people step kids are usually automatically excluded unless you
include them. But in many documents ours included. We define
adopted child to be a child. Yes, an adopted child
is actually in So think of it that way when
you're doing your planning. And folks, when you're thinking about
(10:06):
your planning, think about life insurance and iras and how
to name them the IRA the beneficiary of your estate.
To get better planning eight six six eight four eight
five six nine nine or Legal Exchange show dot com.
Speaker 2 (10:22):
You've been listening to Todd Lutsky, a partner with the
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group. We've got much
more to come when we return to the Legal Exchange
with Todd Lutsky.
Speaker 1 (10:36):
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(10:58):
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can request it online from our website Legal exchange show
dot com. The proceeding was paid for and the views
expressed are solely those of Cushing and Dolan. Cushing and
Dolan d Ormstrong Advisory may contact you offering legal or
investment services. Cushing and Dolan and Armstrong Advisory do not
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Speaker 1 (13:24):
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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
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an expert in elder life planning and taxation. Need help
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Speaker 2 (13:53):
Welcome back into the Legal Exchange with Todd Latsky. I'm
Susan Powers, a financial advisor with the Armstrong Advisory Group,
and I'm joined by Todd Leutsky, a partner with a
law firm of Cushing and Dolan with a master's in taxation.
Where are we going now, Todd.
Speaker 3 (14:07):
We're going to head over to a Supreme Court case
in Nevada, Nevada. Okay, Yeah, what's going on there? So
in Nevada we have a trust citis case. What the
heck is that Richard is the sole benefit beneficiary of
the Richard H. Goldstein irrevocable trust, call it the rhG Trust.
(14:32):
This trust was created after his father's family trust. After
he died in the family trust, you know, this is
his share sure built in we talk about the parent
now drafting the documents all the time. Well, now we're
looking at it from the other end. We're looking at
it from the son who is a beneficiary under the
parent's estate.
Speaker 2 (14:51):
Plan, his inheritance.
Speaker 3 (14:53):
This is his inheritance. Well, Richard lives in Nevada, and
the trust is created in Missouri, and it's cited in Missouri.
That's where the r rhG Trust is governed. Bank of
America is the sole trustee and has the sole discretion
over the trust administration and the sole power to change
(15:15):
the trust citis. rhG Trust no has a no contest
clause in it that would simply cause Richard to lose
any of his interest in the trust if he files
a suit challenging the preparation, implementation, or execution of any
(15:39):
trust or a state planning document. Now that's interesting because
he obviously wants to do something. Let's find out. So
in May of twenty twenty one, Richard asks Bank of
America if they would simply change the situs of the
trust to Nevada, which is where he lives. Bank of
(16:01):
America denied the request. Well, in May of twenty twenty three,
Richard filed in Nevada's district court to try to have
Nevada assume jurisdiction over the trust and to construe for
him the trust in a way that permitted him to
file a petition to change the SITIS without triggering the
no contest clause. So query whether filing to change SITIS
(16:27):
is affecting the implementation of the trust. Don't really know.
It's kind of a gray area, but I could see
the connection there. Okay, well, Bank of America. So Bank
of America said no, files emotion to dismiss because the
court lacked personal jurisdiction over Bank of America because we're
(16:48):
not there. Richard argued that you don't need personal jurisdiction,
You only need what they call in rem jurisdiction, regardless
of what that is. The District court said no. Bank
of America granted Bank of America's motion, and the Supreme
Court affirmed it, saying you don't have to change, basically
(17:09):
stating that Richard failed to show that Bank of America
had sufficient minimum contacts with Nevada in order to get
the personal jurisdiction over Bank of America to gain the
ability to govern the trust. So you can't do it. Wow,
So this trust is going to stay, right, where it
(17:29):
is in Missouri, and Richard's going to have to live
with the terms.
Speaker 2 (17:33):
Well, I don't understand. I mean, maybe it's a tax
thing because Nevada is a tax free state. In Missouri.
If not, the trust easier.
Speaker 3 (17:41):
Well, taxes could always play a point, But I think
there was more to do with this no contest clause.
Didn't really tell us he probably doesn't want the no
contest clause. Maybe there's a different Maybe the laws of
one state view no contest clauses differently than other states,
more strict less strictly.
Speaker 2 (18:00):
How are they construed though, Because he's the only beneficiary,
it's not like he's challenging for a bigger share unless
there were others.
Speaker 3 (18:08):
It is strange. You're right, I did say he's the
sole beneficiary of the trust.
Speaker 2 (18:11):
Allot, that's just his share and there's a bigger trust
above it.
Speaker 3 (18:14):
Yeah, and we'll have to talk. That's what we're going
to explore now, folks, because.
Speaker 2 (18:17):
This hit them on the phone.
Speaker 3 (18:18):
I'd really like to know. I've got a lot of
questions on this case. So the bigger question, though, folks,
is this is this is a trust that was created.
We're going to see how it works. So, first of all,
trusts work. This is another example of it working, controlling
the beneficiary's enjoyment of these assets. And this guide we're
given away is another piece of the estate planning puzzle
(18:41):
is addressed here deals with life insurance and iras. So
if you're trying to do both estate tax planning and
nursing home protection, this guide's for you because it explains
how naming your estate the direct beneficiary of your life
insurance and or the direct beneficiary of your IRA, how
(19:02):
to do it, how it works, and how it works
with a testamentary trust involved, which is a trust built
into your will to provide you with nursing home protection
on these assets that are tough to protect and no
adverse income or state tax consequences. But you got to
follow the rules. Get the guide eight six six eight
(19:24):
four eight five six ninety nine or Legal Exchange Show
dot com again eight six six eight four eight five
six nine nine or Legal Exchange Show dot com. Let's
explore this, because you're right, Susan. There's a lot of
questions that seem to be unanswered in this case. You're right.
If he's the sole beneficiary of the trust, why are
(19:45):
we even fighting here, Well, maybe there's I think it
has to do with with the powers that may or
may not have been given to him in the trust. So,
first of all, what is citus citus is the state
laws that govern the trust. Now, generally, can you change
trustee citus, Yes you can, but you need to change
(20:10):
trustee sitis. There needs to be a trustee, a beneficiary,
a grant tour someone living in that state to be
able to have the state laws apply. So, for example,
donor here in Massachusetts creates a trust resides here, but
the kids the beneficiaries are out of state. Well that's okay,
(20:32):
the donor lives here at the donors trust and certainly
when certainly there's minimum contacts right now with the state.
Look at you, Susan jumping ahead.
Speaker 2 (20:42):
I have to because I have clients in the same
exact situation.
Speaker 3 (20:45):
So now if the donor dies and the trustees are
now out of state, and the beneficiaries are now out
of state, and let's say nobody lives in this state,
well now I don't think we have minimum contacts with
the state. So then you've got to look to the
state where the beneficiaries are, maybe where the trustees are
and say, there's minimum contacts there, so we want to
(21:08):
have those state laws apply change the state citus. And
remember a lot of states are motivated to do this
for what you said earlier, Susan. They want to be
able to tax the income generated by that trust. So
they want the laws of that state to govern.
Speaker 2 (21:29):
So that's where you pay your taxes wherever the citus is.
Speaker 3 (21:32):
Yeah, okay, so if the citus remained in Massachusetts, then
obviously it could be that the money could be taxed
in mass but they wanted taxed in another state. And
some states have better taxes.
Speaker 2 (21:44):
In some states has no tax, so I kind of
get that part of it.
Speaker 3 (21:47):
So Nevada doesn't have an income tax, now do they?
I don't know. So that's that's fine.
Speaker 2 (21:51):
How much gambling they've they've they fut the bill for that.
Speaker 3 (21:54):
I'm sure they do. So that would you know, that
would work and that might be part of the reason. Now,
remember this is a subtrust right, so the kids also
likely could have the trustee could also likely have control
over the distributions to this child. And so that says
sole discretionary distributions. But remember those are really great because
(22:16):
those allow you to have the child not own it. Yeah,
it could pass to grandchildren as state tax free divorce
proof that kid Richard could get divorced or have a
creditor chasing him of some kind and leaving the money
in here means it's not going to be taken from
him to pay the creditor. So to me, this is great.
I love this sole discretionary powers that are that are
(22:39):
in this trust. But remember when you're drafting this, and
you should think about it, and we do all the time,
that maybe there should be language giving the children great power,
the power to remove and replace.
Speaker 2 (22:55):
We have great power comes.
Speaker 3 (22:57):
Great responsibility, no Spider Man references. But in this case,
you know, if that's in there, then you could remove
Bank of America and put another independent trustee again independent,
not related or support it. So, folks, there's plenty of
power you could give the kids in there. And again
I don't know if that power existed in this trust
(23:17):
or not, but again, trust planning works, folks. Learn how
to protect your IRA and your life insurance from the
Nursing Home call and get the guide eight six six
eight four eight five six ninety nine or Legal Exchange
show dot com and you can download it for free.
Speaker 2 (23:34):
Right there, You've been listening to Todd Lutsky, a partner
with the law firm of Cushing and Dolan. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and Todd
is going to be answering your listener questions when we
return in just a few moments on the Legal Exchange
with Todd Lutsky.
Speaker 1 (23:52):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices
in the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance, Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate
(24:15):
is the beneficiary of your IRA or life insurance can
add a layer of tax efficiency in nursing home protection
while still allowing your spouse access when it matters. It's
about keeping more of what you've built, working for your
loved ones now and in the years to come. Get
your free copy today by calling eight six six eight
four eight five six nine nine. That's eight six six
(24:35):
eight four eight, five, six nine nine, or you can
request it online from our website Legal Exchange show dot com.
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
Ormstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.
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Speaker 1 (25:38):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
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Speaker 1 (26:54):
You're listening to the Legal Exchange and it's time for
Ask Todd, the segment where Tom will answer your questions
about anything and everything that's included in the estate planning process.
Once again, here's Todd Lutsky and Susan Powers.
Speaker 2 (27:10):
Welcome back, Todd. We have a few questions from listeners
for you. Our first question comes from Paul in Westboro,
mass And Paul writes, a married friend of mine with
assets of two to three million wants an estate plan,
but her husband is not interested Rowe. She has four
children from a previous marriage that she would like to
include in her estate. Her name is on the house,
(27:33):
but that's about all. Can she set up a trust
in her name only? She is sixty four and still
working and he is seventy five and retired. She is
concerned that if she were to die first, her kids
would be left out permanently from any assets.
Speaker 3 (27:48):
Well, that of course is the risk you have with
every second marriage if you don't plan, right, you have
to just assume, folks, if you get married and you
don't plan, that risk is going to exist, right, There's
no way around it short of planning. So yes, I
think at a bare minimum, your friend needs to to
(28:08):
do some planning. Now. The fact that the husband's not
interested is not helpful, but not completely going to foreclose
her ability to plan. So she would have to come
in and say, I'm doing a state planning only for me.
Problem is, doesn't sound like she has a lot of
other assets. At least from when I heard this, it
sounds like I'm going to assume the home is in
(28:31):
her name, which is what you said, and I'm assuming
it's all in her name.
Speaker 2 (28:36):
Maybe I don't know, maybe it is.
Speaker 3 (28:38):
So let's say she at least owns the entire house,
and maybe.
Speaker 2 (28:41):
Yeah, because it says her name is on the house,
but that's about all yep.
Speaker 3 (28:45):
So So if if that's the case, and she at
least owns the house, well she can put the house
in her trust maybe joint.
Speaker 2 (28:53):
Other assets could be joint. Do you think the not
the house, but the other assets could be joint. That's
why she's afraid her kids will be because it'll all
go back to him.
Speaker 3 (29:03):
Well, let's play out that string, right, So let's assume
the other assets are joint, the investment accounts, the bank accounts,
the brokerage accounts. She could technically set up the trust
on her own, and let's just say for now it's
a revocable trust. She could be the donor and the trustee.
We don't need him to sign. She could put her
house into that trust, and then she can actually go
(29:27):
because if they're joint, I believe the joint owner can
walk in and take out half the money. You don't
need the other joint owner's name to sign if it's
just joint, so she could go in. Technically, she could
go in and take all the money, but I'm not
suggesting that. Sure of course she should go in and
(29:48):
take her half and put it in to a new account,
but in her trust name. Now she can design that
trust to take care of her spouse. Is not saying
I don't want to not take care of my spouse.
I do, but at least this way I can have
the trust become irrevocable the moment I die. I could
(30:12):
put the trustee on as her kids yep. Arguably if
he doesn't want to participate. S I mean, I would
want him to be trustee if if he wanted to participate,
or him and one of her kids so that there's
two serving yep, so they each have some checks and
balances on each other. And then put language in the
(30:35):
trust that says, you know, the property located at XYZ
can be held in trust, maintained in trust as long,
you know, for the life of my spouse until such
time as he either moves out or doesn't want to
live there, dies, doesn't pay the bills, doesn't maintain the property,
you know, let's put some some strict language in there
(30:56):
for that. If any of those events happen, then the
property goes to my kids.
Speaker 2 (31:01):
Because she's not looking necessarily to kick her husband and
have me evicted if she dies. She's just looking to say, yes,
stay here, but ultimately I want to go to my kids.
Speaker 3 (31:10):
That's exactly what this language is do. And even the money,
the money that's in there could be held and invested
where he could have an income from it. Maybe principle
as needed to maintain his standard of living. So again
with a check and balance as trustee, with one kid
of hers and him serving, I think we can get there.
So and all of that done. Now we're taking care
(31:30):
of her side of the family, taking care of him,
and at the same time providing a state tax planning,
because whatever's in there at least is going to be
sheltered and that makes his estate less. And of course
those assets that are now joined that are in his
name alone, he'll have to figure out. That'll kind of
force him to figure out what he wants to do
(31:51):
with his stuff. So I think there's planning that can
be done. It's not as easy, but then again, state
planning isn't always easy, of which dealing with iras and
life insurance is also not always easy in your estate plan.
But this guide explains how to name life insurance the
direct beneficiary your estate and the IRA the beneficiary your estate.
(32:17):
Has to be done with following several rules based on
your age using a testamentary trust, but at the end
of the day, you'll be able to shelter these assets
from estate taxes. You'll be able to protect them from
the cost of nursing home care, which is a huge
hurdle for iras, and you can do it all without
(32:39):
causing any problems with required minimum distributions on the income
tax side and or any estate tax negative consequences. Folks,
it's relatively new. Stuff came out in twenty twenty two.
Learn how to do it eight six six eight four
eight five six nine to nine or Legal Exchange Show
dot com. Get the guide and learn how this works
(33:03):
eight six six eight four eight five six ninety nine
or Legal Exchange Show dot com.
Speaker 2 (33:09):
Our last question comes from Rita in Newburyport, mass And
Rita writes, my mom is eighty four and needs to
go into a nursing home. She has mobility issues, but
other than that, she is relatively healthy. She has around
four hundred thousand in the bank and we are wondering
if there's anything that can be done now to try
and protect this money. Are we too late?
Speaker 3 (33:31):
So it sounds like it says needs to go into
a nursing home now, So you're never too late, you know,
So eighty four, it seems like the facts are like
there's a big lift here. It's not too late. So
at this point, you know, I'm guessing that you said
she has just the four hundred thousand no real estate.
Speaker 2 (33:53):
Or she she didn't specify.
Speaker 3 (33:56):
So if she owns a home or not, Now that's
the big issue, right, Yeah, So if there's a home,
the home can be considered non countable. When you're entering
a nursing home, even if you're single, which I suspect
she is at this point, Yes, waidoed or whatnot, it
can be considered non countable as long as the value.
(34:16):
The new rule under the BBBA Act says that the
value of the home can't be more than a million dollars,
even though in mass it was higher than that before
this act. So if it's a million or less and
it's her primary residence and she intends to return home,
we can make the house at least non countable, not
(34:39):
necessarily non leanable, but non countable, so it won't prevent
her from getting on Medicaid, which I think is the goal. Yep.
Then we turn our attention to the four hundred thousand
dollars rights.
Speaker 2 (34:53):
What she can have two grand?
Speaker 3 (34:55):
Yeah, so how do you go from Yeah, so you
got to get that down to two thousand. Do so
you got three hundred and ninety eight thousand dollars to
deal with well in that front, at eighty four, I
would probably look into a medicaid annuity. I think she'll
be fine. You could probably still get seven eight year
(35:17):
term based on her life expectancy. If I had to guess,
I have to look at the tables. But as long
as we buy that medicaid annuity, we can convert that
into an income stream and she will be able to
become eligible for Medicaid.
Speaker 2 (35:33):
So it's no longer considered an asset.
Speaker 3 (35:35):
Right the moment you take that. Let's say there's three
hundred ninety eight thousand dollars, and we divided by eight years,
divided by twelve months, you're going to get a number.
That number is a monthly check that she will be
receiving for the next eight years every month. And because
of that, it converted that asset to an income stream.
(35:58):
And so now as long as that income coming from
that annuity, which is not going to be huge, plus
her Social Security is less than say sixty five or
seven sixty five hundred or seven thousand dollars up, she's
gonna get on Medicaid, okay, and there will be a
payback provision. So in the event she passes away, the
state will be named as the primary beneficiary for the
(36:20):
amount paid on her behalf, so there is a payback,
but it slows the bleeding. Folks. Learn how to protest
for money. You want to protect an IRA and life insurance,
you got to get the guide and learn how it
works eight six six eight four eight five six nine
nine or Legal Exchange Show dot com.
Speaker 2 (36:38):
If you have a question you would like to ask Todd,
visit his website Legal Exchange Show dot com and click
on the ask Tod tab. Maybe I'll be able to
read your question on the air, and hopefully his answer
will stop you from becoming one of his next real
life stories. You've been listening to Todd Lutski, a partner
with the law firm of Cushing and Dolan. I'm Susan Powers,
(36:59):
a financial advisor with the Armstrong Advisory Group. We're going
to take a quick break, but we'll be back with
more on the Legal Exchange with Todd Ludski.
Speaker 1 (37:09):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices,
and the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate
(37:31):
is the beneficiary of your IRA or life insurance cannot
a layer of tax efficiency in nursing home protection while
still allowing your spouse access when it matters. It's about
keeping more of what you've built, working for your loved
ones now and in the years to come. Get your
free copy today by calling eight six six eight four
eight five six nine nine. That's eight six six eight
(37:52):
four eight five six nine nine, or you can request
it online from our website Legal exchange show dot com.
The proceeding was paid for in the musics rest are
solely those of Cushing and Dolan. Cushingan Dolan, d Ormstrong
Advisory may contact you offering legal or investment services. Cushing
and Dolan and Armstrong Advisory do not endorse each other
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Artificial intelligence is changing the way companies invest in how
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on our website Armstrong Advisory dot com.
Speaker 1 (40:27):
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, intestate 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 six six eight four eight
(40:49):
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 (41:00):
Welcome back into Leal Exchange with Todd Lutsky. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and I'm joined,
of course by Todd Lutsky, a partner with the law
firm of Cushing and Dolan with a master's in taxation.
I have my own real life story for you today,
Todd to talk about. So we have mutual clients. They
(41:20):
are eighty one right, there's they are eighty one and
seventy four. They created two irrevocable trusts with you back
in twenty eleven, so we're well past the five years.
So in their trust they have their home worth around
six twenty five, they each own half, and then they
have two investment accounts worth around three million.
Speaker 3 (41:42):
So is the six twenty five half and half and
a million?
Speaker 2 (41:45):
Two no, no, no twenty five, so it's three in change,
got it go ahead? And then they each have around
one and a half million in their trust investment accounts
okay outside of their trust, very nominal bank accounts. But
then he has an IRA worth around eight hundred and
(42:07):
then she has an IRA worth around three hundred, and
both of their trusts have creditor protection language in there.
They have an only son, so they wanted to divorce
proof and creditor protect. So they were listening to the
show and they sent an email asking, right, well, they
(42:27):
heard you talking about the testamentary trust because they have,
you know, over a million dollars in iras they couldn't
protect in advance, So they wanted to know if they
consider doing this testamentary trust, would they still be able
to maintain the creditor protection language that is in their trust.
(42:49):
The arevocable trust for their son.
Speaker 3 (42:51):
Yeah. Yeah, so this has got a lot of stuff
going on, but the focus is just on the eight
hundred and.
Speaker 2 (42:57):
The three the iras.
Speaker 3 (42:58):
Yeah. So folks, remember they already have the two irrevocable
trusts that have assets in them, in this case a
good amount you know, a six twenty five house and
three million divide by two in these trusts.
Speaker 2 (43:09):
So yeah, a lot of money in the trust.
Speaker 3 (43:11):
You've got about a million eight in each trust in
terms of assets. So great, that's helping from the state,
tax planning, that's probate avoided, that's nursing home protected, that's
creditor controlled for their kids, divorce proofd right. So this
is these are doing all of those things, and I'm
(43:32):
just going to take them innute. I know it's not
part of the question, but just when I look at this,
I say, wow, because we've got all those benefits going on,
and they've had.
Speaker 2 (43:46):
This trust for twenty eleven.
Speaker 3 (43:48):
Wow, and their life hasn't been disrupted. No, not not
calling complaining about how burdensome the trust is or.
Speaker 2 (43:54):
No, and they don't they have I don't. They don't
use the assets in the trust. They've done a little
bit gifting but other than that, they don't rely on.
Speaker 3 (44:02):
But they could, by the way the money say for them.
Speaker 2 (44:05):
Yeah, there was a short time they took the income
out and they decided they didn't really need it anymore.
So yeah, life goes on.
Speaker 3 (44:11):
Yeah, So this is I think a side point, folks,
that these irrevocable trusts are doing all these things. This person,
this family has had it for years and basically their
life goes on unaffected. That for all you folks that
think you lose control and give up stuff, it's it's
not clearly not the case. Okay, So that's all off
the table. But and back then, we didn't have this
(44:32):
option we're about to talk about now. This option came
out in twenty twenty two under the Secure Act. Okay,
so the option is now to say, all right, what
do we do with his eight hundred or her three hundred?
Speaker 2 (44:44):
Actually, if I can interrupt you for one second, just
to kind of show how these trusts change with you
as your life changed. Sure, when they first did it,
their some was younger, he was not married, he wasn't
even thinking about that. They since went back in and
did an amendment with your firm to divorce proof and
to credit or protect so that was added on later on,
(45:06):
so that it's it's adapted with their life that's changed
throughout the years.
Speaker 3 (45:11):
Well, let me do this. Let me explain to you.
This is what I'm about to explain to you is
in this guide how to name your IRA the beneficiary
of your estate, what those rules are surrounding doing that,
How to name your life insurance if you have it.
The beneficiary is your estate coupled with that testamentary trust
(45:32):
which is also described in here, to show how those
two items work together to provide estate, tax planning, nursing
home protection on yes, an IRA, which has always been
hard to do, all without creating adverse income tax consequences
that surround iras. Folks, it's a mouthful. Get the guide
learn how it works eight six six eight four eight
(45:56):
five six nine to nine or Legal Exchange Show dot
com again eight six six eight four eight five six
nine nine or Legal Exchange Show dot Com. All right,
back to the these folks. All right, so we've got
let's take the eight hundred thousand dollars IRA. Looks like
it's husband's. First thing we would do is can we
(46:17):
name the estate the beneficiary? The first rule you need
to look at is how old is this person? Oh,
seventy four, eighty one.
Speaker 2 (46:24):
Eighty one, and in feeling health too, it's.
Speaker 3 (46:27):
Okay, so eighty one years old, as long as you
are seventy three. For the most part, I think there's
going to be some changes that make it seventy five
for younger people for older people. If you are age
seventy three, that is the required beginning date the RBD
(46:47):
in which you must take out minimum distributions from your IRA.
If you've reached that age, then you can name your
estate the beneficiary of the eye. That's important age because
the minimum distributions that will come out when you die,
(47:07):
right when you die will be based on your ghost
life expectancy. So if you died at eighty one, it
will come out over an eighty one year old's life expectancy. Okay,
if you had named a spouse. Now this is a
bigger age difference that I'm used to seeing, But if
you had named the spouse, it would come out over
the spouse's life expectancy. Generally, the age isn't too different,
(47:31):
and even here it's not too different enough to make
the minimum distribution an income tax problem. Okay, so that's great.
Now if you happen to name if you named your
estate thera, I'm sorry. If you named the beneficiar of
your IRA your estate and you were not seventy three
(47:52):
and died before you reached seventy three, yep, then these
IRA distributions will come out over five.
Speaker 2 (48:00):
Years, which wouldn't be so hot if you have a
larger iron.
Speaker 3 (48:03):
Eight hundred thousand dollars coming out over five years could
cause an income tax issue. So that's the income tax play.
But now we know what that rule is. Okay, no
problem here, then we simply put that together. The only
other change that this client's going to need to do
is their existing trusts are fine, that's not going to
be affected. That all the benefits that have been going
(48:24):
on with those existing trusts will remain unaffected. But if
I pull their file, I'm going to find a will
that is a poor overwill that puts assets into their
existing irrevocable trusts when they die, perfectly normal thing to
do until twenty twenty two. And now if they come in,
we can do a new will, and in the new
(48:46):
will there will be a trust built into the will.
That's the testamentary trust that we talk about. Yep. So
that's that new trust that's built into the will. So
now with the IRA not going directly to the spouse,
it will go directly to this will trust. Yes, it
will have to go to probate. It's one item, folks.
It's not a reason enough not to do this when
(49:08):
you compare it to the benefits you get. So now
that IRA hits this will trust change the account and
the language in this trust says income and principle both
better than the trust. They have. Income and principle can
go to the surviving spouse. So now the wife can
(49:29):
continue to enjoy this entire IRA, just like she could
the old way.
Speaker 2 (49:36):
So no limits to what she can take out.
Speaker 3 (49:39):
She can take out the income and the principle, and
the trustee can give it to her. Of course, the
regular income tax rules apply. It's now sheltered for a
state taxes, So in the event wife dies later, this
is tucked away in this trust, sheltered for a state taxes.
And more importantly, again wife's seventy four, maybe in a
year she has a nursing home need. It's protected from
(50:01):
the nursing home. Whereas right away, right away once he
passed no five year waiting period versus if it had
gone to the spouse, it would have created a it
would still be at risk. Yeah and so and lastly
when he when he dies and when she dies, the
assets can be held for the child. Same divorce proof
language as of the other trust folks. Lots you can get.
(50:24):
Lots of benefits come from learning how these iras and
life insurance ideas work coupled with your estate plan. Get
this guide IRA Naming your Estate the Beneficiary eight six
six eight four eight five six ninety nine or Legal
Exchange show dot com and download it there.
Speaker 2 (50:44):
Todd Lutsky from the law firm of Cushing in Doolan,
thank you so much.
Speaker 3 (50:47):
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 today and we'll be
back again next week on the Legal Exchange with Todd Lutskey.
Speaker 1 (51:00):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices
and the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate
(51:22):
is the beneficiary of your IRA or life insurance can
at a layer of tax efficiency in nursing home protection
while still allowing your spouse access when it matters. It's
about keeping more of what you've built, working for your
loved ones now and in the years to come. Get
your free copy today by calling eight six six eight
four eight five six nine nine. That's eight six six
(51:42):
eight four eight five six nine nine, or you can
request it online from our website Legal exchange show dot com.
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
Ormstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.
Speaker 5 (52:00):
Are you wondering where the economy is headed? GDP is growing,
but Tariff's inflation and job numbers are making headlines. Interest rates,
housing costs and policy changes are impacting all of us.
Even AI is changing. How markets move Hi. This is
Chuck Zauta from the Armstrong Advisory Group. We're hosting two
financial seminars this fall to help you make sense of
it all. Join us at Margaritaville Resort, Cape cod on
(52:20):
October ninth, or at the showcase super Lux in Chestnut
Hill on October sixteenth. To reserve your seat, call eight
hundred three nine three for zero zero one. We'll break
down the economic trends, market risks, and smart strategies you
need to plan for retirement and beyond. Diversification. Preparation and
smart decisions are several of the keys to navigating uncertainty.
Registered today by calling eight hundred three nine three for
(52:43):
zero zero one or on our website 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 any Armstrong
guide specific financial, legal or tax advice. Consult your own financial,
tax into state planning advisors before making any investment decisions.
Armstrong make contact you to offer investment advisory services.
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This is the Legal Exchange with Todd Lutsky from the
law firm of Cushing and Dolan and Susan Powers of
the Armstrong Advisory Group. Each week, Todd and Susan will
discuss many topics, including estate planning, how to avoid probate,
and protecting your money from a nursing home. If you
need assistance in any of these areas, or have a
question about another issue that may affect your future, call
(00:21):
eight six six eight four eight five six ninety nine
to make an appointment. That's eight sixty six eight four
eight five six ninety nine. Operators are standing by. Now
Here are your hosts, Todd Lutsky and Susan Powers.
Speaker 2 (00:37):
Welcome into Legal Exchange with Todd Latzky. 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?
Speaker 3 (00:53):
I'm never better in you?
Speaker 2 (00:54):
I am great? Thank you. Ay have for us this week, got.
Speaker 3 (00:57):
A couple of cases we're going to go. It's actually
a Southern District of Ohio case where we're dealing with
a second marriage, a prenup and then changes that happen
after a prenup, and is the prenup enough to handle
divorce and dying? I think people mix up the two, Yeah,
(01:17):
a lot, and I think we need to clear that
up a little bit in this Southern District of Ohio
case and the planning that goes along with it. And
then we head over to Nevada where we have a
Supreme Court case where it deals with trust sitis and
no contest clauses. So what is that? So trust citis
is generally where the court what laws govern the trust.
Speaker 2 (01:39):
Like if you live in Massachusetts mass laws and you
move to Florida, then Florida does well.
Speaker 3 (01:44):
Maybe how do you do that? And how do you
change citis? And can you do it? And does it
affect a no contest clause? And is one state governing
no contest clause is different than another state? Yeah, it
should be interesting. And is there a way to ask
for a change of citis without triggering a no contest clause?
Stay tuned.
Speaker 2 (01:59):
I want an iron clad no contest, no shenan against
for these boys.
Speaker 3 (02:04):
But folks, these are just some of the issues that
come up in estate planning. And when we're talking about
estate planning, one of the bigger issues that come up
is how to deal with things like an IRA and
life insurance. So seem to be two problematic assets that
nonetheless are part of your estate and you have to
deal with them. So if you are thinking about protecting
(02:24):
assets from the nursing home, and you are doing your
estate planning, so you want to do both estate tax
planning and nursing home planning at the same time, and
you have an IRA, this guide is for you because
it's going to show how you can name the beneficiary
of your IRA your estate, how to do it, when
to do it, and why you can get not only
(02:46):
a state tax savings from the IRA, but also a
fifty percent chance i'm going to say, of protecting it
from the cost of long term care, which is not
hard to do with an IRA, and you can do
the same thing with life insurance. But with life insurance,
as soon as you die, it goes into a testamentary
trust and then it would be protected from the cost
(03:08):
of long term care. And yes, the trust testamentary trusts
are explained in here as well. Folks. I can't say
enough about the guide eight six six eight four eight
five six nine nine or Legal Exchange show dot com.
Name your estate, the beneficiary of your IRA, and why
it's important eight six six eight four eight five six
(03:30):
ninety nine or Legal Exchange show dot com. Let's head
over to Ohio, the Southern District of Ohio. So we
have Alex and Joanne who get married in June of
two thousand and eight. By the way, I'll just throw
out that he's fifty eight years old and she's eighty one,
(03:51):
So just yeah, a little little age difference there. And
the prenup is done, and the prenup states that Alex
would get Joanne's Florida condo following Joanne's death. I remember
she's the eighty one year old in exchange for his
waiving his spousal rights down the line against a will.
(04:12):
So he's giving up the right to challenge his forced
rights as a spouse in exchange for getting this hospital. Well,
in twenty fifteen, Joanne executes a will which followed the
terms of the prenup. Makes sense, house goes to Alex
twenty twenty. She starts to have some decline. Remember she
(04:35):
was eighty one way back when so twenty twenty, she's
like ninety something. Now, okay, she suffers a fall, and
in twenty twenty three, Joanne's adopted daughter rekindles the relationship.
Convenient adopted, not step will make a distinction of that
going forward. Then Joanne starts involving herself, you know, in
(04:59):
Joanne Laurie I'm sorry, starts out involving herself in Joanne's
legal financial, medical affairs. Joanne begins making changes to her
own estate planning documents. Well I'm not sure she's doing
it on her own. So the documents then come out.
There's a new power of attorney appointing Laurie the daughter,
a condicil to the will done.
Speaker 2 (05:20):
So she's still married at this point, right, oh yeah, yeah.
Speaker 3 (05:23):
Okay, a codicil to the wills done, appointing the condo
to Laurie. Ooh oh boy. And then indeed is executed
by Laurie as power of attorney for Joanne, transferring the
condo to Laurie's new trust that I'm sure benefits Laurie,
(05:44):
or condo to not Laurie's new trust, but to Joanne's
new trust, which probably benefits Laurie.
Speaker 1 (05:52):
Well.
Speaker 3 (05:52):
February twenty twenty four. About a year later, Joanne dies
Alex then files a declared judgment seeking for enforcement of
the prenup, which makes sense. Lourie files a motion to dismiss,
saying he failed to state a claim. The District Court
denies Lurie's motion, stating that you know, if a contract
(06:12):
exists and it's unambiguous, then the court consider emotion to dismiss.
But it found the terms of this this prenup to
be ambiguous and sufficient facts were pled to survive the
motion to dismiss. Send it back and let's find out
who gets what here. So I don't give you no
answer one.
Speaker 2 (06:33):
I told you about these cases that just never ending
stories over here.
Speaker 3 (06:38):
So this one is another no answer case and it
got to go back. But it makes sense. I mean,
you can't file emotion to dismiss. You've got to address
the prenup here. But folks, the tips and lessons we
want from this is, you know, whenever you have a
second marriage, clearly you got to get your estate plan
in order, right. You got to make sure you put
your estate plan together. And by the way, pups generally
(07:00):
covered divorces doesn't always need to cover estate planning or death,
but it covers divorce.
Speaker 2 (07:07):
Yeah. See, I never knew a prenup could cover anything
but a divorce.
Speaker 3 (07:11):
Yeah, And there's some gray area here, right, so you
should always, like I say, get your state plan in
order after a second marriage. Now, remember, Joanne could have
provided if she did her planning, got her plan updated,
that the house can be held in trust. Where was
the trust earlier, Joanne? Yeah, then you know, a year
(07:31):
before you died, could either go to Alex or in
the event, it could be held in trust for Alex,
provided he pays all the expenses, and then it could
go to the adopted daughter later. M hm. So you
could take care of that. Well, that's a problem, you
might say, because Todd, there's a huge age difference. It's
possible that the daughter is the same age as the stepfather, but.
Speaker 2 (07:52):
She already agreed to give him that place as part
of their prena.
Speaker 3 (07:56):
I know. And that's but I'm just playing out some facts, right,
So even if there was an age difference, they could
have agreed otherwise to say, the house goes directly to Alex,
but give all the money to the daughter right now
so that she doesn't have to wait as long, Yeah,
to get something, and the stepfather has a place to
live and taking care of which kind of makes sense
(08:18):
because even if is your stepfather, and what are you
gonna do make this guy homeless? I mean, it's kind
of if that's where they're living, then that's where they're living.
The bigger problem I have here is, yes, I would
say absolutely argue that you got to enforce the prena,
But where's the undue influence argument?
Speaker 2 (08:34):
Yeah, you're not kidding.
Speaker 3 (08:36):
I mean it seems to me that this is clear
under influence. The daughter has a fiduciary relationship because she's
the daughter, helps mom change her estate planning documents. M
H gets herself appointed power of attorney, then suggests a trust.
Then actually, as power of attorney, transfers the deed to
the trust. At the end of the day, she has
(08:58):
more assets than she would have ever had. While that
is the definition of undue influence, and she had been
estranged before eh, mom was on the deathbed. So it's like, yeah,
I agree, force pseudo and force suprenup agreement because that's
a contract. But it would seem to me that if
you challenge the validity of the documents because of undue
(09:22):
influence and those documents are no longer any good. Then
you fall back to the old will that was good,
and that will gives him the house, right, So I
think he's probably gonna win this because maybe in the
remand during the case that we're not hearing yet, he
will make these undue influence arguments. And just lastly, remember, folks,
(09:45):
step people step kids are usually automatically excluded unless you
include them. But in many documents ours included. We define
adopted child to be a child. Yes, an adopted child
is actually in So think of it that way when
you're doing your planning. And folks, when you're thinking about
(10:06):
your planning, think about life insurance and iras and how
to name them the IRA the beneficiary of your estate.
To get better planning eight six six eight four eight
five six nine nine or Legal Exchange show dot com.
Speaker 2 (10:22):
You've been listening to Todd Lutsky, a partner with the
law firm of Cushing and Dolan. I'm Susan Powers, a
financial advisor with the Armstrong Advisory Group. We've got much
more to come when we return to the Legal Exchange
with Todd Lutsky.
Speaker 1 (10:36):
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can request it online from our website Legal exchange show
dot com. The proceeding was paid for and the views
expressed are solely those of Cushing and Dolan. Cushing and
Dolan d Ormstrong Advisory may contact you offering legal or
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Speaker 1 (13:24):
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Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax into state planning advisors before making
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Speaker 2 (13:53):
Welcome back into the Legal Exchange with Todd Latsky. I'm
Susan Powers, a financial advisor with the Armstrong Advisory Group,
and I'm joined by Todd Leutsky, a partner with a
law firm of Cushing and Dolan with a master's in taxation.
Where are we going now, Todd.
Speaker 3 (14:07):
We're going to head over to a Supreme Court case
in Nevada, Nevada. Okay, Yeah, what's going on there? So
in Nevada we have a trust citis case. What the
heck is that Richard is the sole benefit beneficiary of
the Richard H. Goldstein irrevocable trust, call it the rhG Trust.
(14:32):
This trust was created after his father's family trust. After
he died in the family trust, you know, this is
his share sure built in we talk about the parent
now drafting the documents all the time. Well, now we're
looking at it from the other end. We're looking at
it from the son who is a beneficiary under the
parent's estate.
Speaker 2 (14:51):
Plan, his inheritance.
Speaker 3 (14:53):
This is his inheritance. Well, Richard lives in Nevada, and
the trust is created in Missouri, and it's cited in Missouri.
That's where the r rhG Trust is governed. Bank of
America is the sole trustee and has the sole discretion
over the trust administration and the sole power to change
(15:15):
the trust citis. rhG Trust no has a no contest
clause in it that would simply cause Richard to lose
any of his interest in the trust if he files
a suit challenging the preparation, implementation, or execution of any
(15:39):
trust or a state planning document. Now that's interesting because
he obviously wants to do something. Let's find out. So
in May of twenty twenty one, Richard asks Bank of
America if they would simply change the situs of the
trust to Nevada, which is where he lives. Bank of
(16:01):
America denied the request. Well, in May of twenty twenty three,
Richard filed in Nevada's district court to try to have
Nevada assume jurisdiction over the trust and to construe for
him the trust in a way that permitted him to
file a petition to change the SITIS without triggering the
no contest clause. So query whether filing to change SITIS
(16:27):
is affecting the implementation of the trust. Don't really know.
It's kind of a gray area, but I could see
the connection there. Okay, well, Bank of America. So Bank
of America said no, files emotion to dismiss because the
court lacked personal jurisdiction over Bank of America because we're
(16:48):
not there. Richard argued that you don't need personal jurisdiction,
You only need what they call in rem jurisdiction, regardless
of what that is. The District court said no. Bank
of America granted Bank of America's motion, and the Supreme
Court affirmed it, saying you don't have to change, basically
(17:09):
stating that Richard failed to show that Bank of America
had sufficient minimum contacts with Nevada in order to get
the personal jurisdiction over Bank of America to gain the
ability to govern the trust. So you can't do it. Wow,
So this trust is going to stay, right, where it
(17:29):
is in Missouri, and Richard's going to have to live
with the terms.
Speaker 2 (17:33):
Well, I don't understand. I mean, maybe it's a tax
thing because Nevada is a tax free state. In Missouri.
If not, the trust easier.
Speaker 3 (17:41):
Well, taxes could always play a point, But I think
there was more to do with this no contest clause.
Didn't really tell us he probably doesn't want the no
contest clause. Maybe there's a different Maybe the laws of
one state view no contest clauses differently than other states,
more strict less strictly.
Speaker 2 (18:00):
How are they construed though, Because he's the only beneficiary,
it's not like he's challenging for a bigger share unless
there were others.
Speaker 3 (18:08):
It is strange. You're right, I did say he's the
sole beneficiary of the trust.
Speaker 2 (18:11):
Allot, that's just his share and there's a bigger trust
above it.
Speaker 3 (18:14):
Yeah, and we'll have to talk. That's what we're going
to explore now, folks, because.
Speaker 2 (18:17):
This hit them on the phone.
Speaker 3 (18:18):
I'd really like to know. I've got a lot of
questions on this case. So the bigger question, though, folks,
is this is this is a trust that was created.
We're going to see how it works. So, first of all,
trusts work. This is another example of it working, controlling
the beneficiary's enjoyment of these assets. And this guide we're
given away is another piece of the estate planning puzzle
(18:41):
is addressed here deals with life insurance and iras. So
if you're trying to do both estate tax planning and
nursing home protection, this guide's for you because it explains
how naming your estate the direct beneficiary of your life
insurance and or the direct beneficiary of your IRA, how
(19:02):
to do it, how it works, and how it works
with a testamentary trust involved, which is a trust built
into your will to provide you with nursing home protection
on these assets that are tough to protect and no
adverse income or state tax consequences. But you got to
follow the rules. Get the guide eight six six eight
(19:24):
four eight five six ninety nine or Legal Exchange Show
dot com again eight six six eight four eight five
six nine nine or Legal Exchange Show dot com. Let's
explore this, because you're right, Susan. There's a lot of
questions that seem to be unanswered in this case. You're right.
If he's the sole beneficiary of the trust, why are
(19:45):
we even fighting here, Well, maybe there's I think it
has to do with with the powers that may or
may not have been given to him in the trust. So,
first of all, what is citus citus is the state
laws that govern the trust. Now, generally, can you change
trustee citus, Yes you can, but you need to change
(20:10):
trustee sitis. There needs to be a trustee, a beneficiary,
a grant tour someone living in that state to be
able to have the state laws apply. So, for example,
donor here in Massachusetts creates a trust resides here, but
the kids the beneficiaries are out of state. Well that's okay,
(20:32):
the donor lives here at the donors trust and certainly
when certainly there's minimum contacts right now with the state.
Look at you, Susan jumping ahead.
Speaker 2 (20:42):
I have to because I have clients in the same
exact situation.
Speaker 3 (20:45):
So now if the donor dies and the trustees are
now out of state, and the beneficiaries are now out
of state, and let's say nobody lives in this state,
well now I don't think we have minimum contacts with
the state. So then you've got to look to the
state where the beneficiaries are, maybe where the trustees are
and say, there's minimum contacts there, so we want to
(21:08):
have those state laws apply change the state citus. And
remember a lot of states are motivated to do this
for what you said earlier, Susan. They want to be
able to tax the income generated by that trust. So
they want the laws of that state to govern.
Speaker 2 (21:29):
So that's where you pay your taxes wherever the citus is.
Speaker 3 (21:32):
Yeah, okay, so if the citus remained in Massachusetts, then
obviously it could be that the money could be taxed
in mass but they wanted taxed in another state. And
some states have better taxes.
Speaker 2 (21:44):
In some states has no tax, so I kind of
get that part of it.
Speaker 3 (21:47):
So Nevada doesn't have an income tax, now do they?
I don't know. So that's that's fine.
Speaker 2 (21:51):
How much gambling they've they've they fut the bill for that.
Speaker 3 (21:54):
I'm sure they do. So that would you know, that
would work and that might be part of the reason. Now,
remember this is a subtrust right, so the kids also
likely could have the trustee could also likely have control
over the distributions to this child. And so that says
sole discretionary distributions. But remember those are really great because
(22:16):
those allow you to have the child not own it. Yeah,
it could pass to grandchildren as state tax free divorce
proof that kid Richard could get divorced or have a
creditor chasing him of some kind and leaving the money
in here means it's not going to be taken from
him to pay the creditor. So to me, this is great.
I love this sole discretionary powers that are that are
(22:39):
in this trust. But remember when you're drafting this, and
you should think about it, and we do all the time,
that maybe there should be language giving the children great power,
the power to remove and replace.
Speaker 2 (22:55):
We have great power comes.
Speaker 3 (22:57):
Great responsibility, no Spider Man references. But in this case,
you know, if that's in there, then you could remove
Bank of America and put another independent trustee again independent,
not related or support it. So, folks, there's plenty of
power you could give the kids in there. And again
I don't know if that power existed in this trust
(23:17):
or not, but again, trust planning works, folks. Learn how
to protect your IRA and your life insurance from the
Nursing Home call and get the guide eight six six
eight four eight five six ninety nine or Legal Exchange
show dot com and you can download it for free.
Speaker 2 (23:34):
Right there, You've been listening to Todd Lutsky, a partner
with the law firm of Cushing and Dolan. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and Todd
is going to be answering your listener questions when we
return in just a few moments on the Legal Exchange
with Todd Lutsky.
Speaker 1 (23:52):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices
in the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance, Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate
(24:15):
is the beneficiary of your IRA or life insurance can
add a layer of tax efficiency in nursing home protection
while still allowing your spouse access when it matters. It's
about keeping more of what you've built, working for your
loved ones now and in the years to come. Get
your free copy today by calling eight six six eight
four eight five six nine nine. That's eight six six
(24:35):
eight four eight, five, six nine nine, or you can
request it online from our website Legal Exchange show dot com.
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
Ormstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.
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Speaker 1 (25:38):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal, or tax advice. Consult
your own financial, tax into state planning advisors before making
any investment decisions. Armstrong may contact you to offer investment
advisory services.
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Speaker 1 (26:54):
You're listening to the Legal Exchange and it's time for
Ask Todd, the segment where Tom will answer your questions
about anything and everything that's included in the estate planning process.
Once again, here's Todd Lutsky and Susan Powers.
Speaker 2 (27:10):
Welcome back, Todd. We have a few questions from listeners
for you. Our first question comes from Paul in Westboro,
mass And Paul writes, a married friend of mine with
assets of two to three million wants an estate plan,
but her husband is not interested Rowe. She has four
children from a previous marriage that she would like to
include in her estate. Her name is on the house,
(27:33):
but that's about all. Can she set up a trust
in her name only? She is sixty four and still
working and he is seventy five and retired. She is
concerned that if she were to die first, her kids
would be left out permanently from any assets.
Speaker 3 (27:48):
Well, that of course is the risk you have with
every second marriage if you don't plan, right, you have
to just assume, folks, if you get married and you
don't plan, that risk is going to exist, right, There's
no way around it short of planning. So yes, I
think at a bare minimum, your friend needs to to
(28:08):
do some planning. Now. The fact that the husband's not
interested is not helpful, but not completely going to foreclose
her ability to plan. So she would have to come
in and say, I'm doing a state planning only for me.
Problem is, doesn't sound like she has a lot of
other assets. At least from when I heard this, it
sounds like I'm going to assume the home is in
(28:31):
her name, which is what you said, and I'm assuming
it's all in her name.
Speaker 2 (28:36):
Maybe I don't know, maybe it is.
Speaker 3 (28:38):
So let's say she at least owns the entire house,
and maybe.
Speaker 2 (28:41):
Yeah, because it says her name is on the house,
but that's about all yep.
Speaker 3 (28:45):
So So if if that's the case, and she at
least owns the house, well she can put the house
in her trust maybe joint.
Speaker 2 (28:53):
Other assets could be joint. Do you think the not
the house, but the other assets could be joint. That's
why she's afraid her kids will be because it'll all
go back to him.
Speaker 3 (29:03):
Well, let's play out that string, right, So let's assume
the other assets are joint, the investment accounts, the bank accounts,
the brokerage accounts. She could technically set up the trust
on her own, and let's just say for now it's
a revocable trust. She could be the donor and the trustee.
We don't need him to sign. She could put her
house into that trust, and then she can actually go
(29:27):
because if they're joint, I believe the joint owner can
walk in and take out half the money. You don't
need the other joint owner's name to sign if it's
just joint, so she could go in. Technically, she could
go in and take all the money, but I'm not
suggesting that. Sure of course she should go in and
(29:48):
take her half and put it in to a new account,
but in her trust name. Now she can design that
trust to take care of her spouse. Is not saying
I don't want to not take care of my spouse.
I do, but at least this way I can have
the trust become irrevocable the moment I die. I could
(30:12):
put the trustee on as her kids yep. Arguably if
he doesn't want to participate. S I mean, I would
want him to be trustee if if he wanted to participate,
or him and one of her kids so that there's
two serving yep, so they each have some checks and
balances on each other. And then put language in the
(30:35):
trust that says, you know, the property located at XYZ
can be held in trust, maintained in trust as long,
you know, for the life of my spouse until such
time as he either moves out or doesn't want to
live there, dies, doesn't pay the bills, doesn't maintain the property,
you know, let's put some some strict language in there
(30:56):
for that. If any of those events happen, then the
property goes to my kids.
Speaker 2 (31:01):
Because she's not looking necessarily to kick her husband and
have me evicted if she dies. She's just looking to say, yes,
stay here, but ultimately I want to go to my kids.
Speaker 3 (31:10):
That's exactly what this language is do. And even the money,
the money that's in there could be held and invested
where he could have an income from it. Maybe principle
as needed to maintain his standard of living. So again
with a check and balance as trustee, with one kid
of hers and him serving, I think we can get there.
So and all of that done. Now we're taking care
(31:30):
of her side of the family, taking care of him,
and at the same time providing a state tax planning,
because whatever's in there at least is going to be
sheltered and that makes his estate less. And of course
those assets that are now joined that are in his
name alone, he'll have to figure out. That'll kind of
force him to figure out what he wants to do
(31:51):
with his stuff. So I think there's planning that can
be done. It's not as easy, but then again, state
planning isn't always easy, of which dealing with iras and
life insurance is also not always easy in your estate plan.
But this guide explains how to name life insurance the
direct beneficiary your estate and the IRA the beneficiary your estate.
(32:17):
Has to be done with following several rules based on
your age using a testamentary trust, but at the end
of the day, you'll be able to shelter these assets
from estate taxes. You'll be able to protect them from
the cost of nursing home care, which is a huge
hurdle for iras, and you can do it all without
(32:39):
causing any problems with required minimum distributions on the income
tax side and or any estate tax negative consequences. Folks,
it's relatively new. Stuff came out in twenty twenty two.
Learn how to do it eight six six eight four
eight five six nine to nine or Legal Exchange Show
dot com. Get the guide and learn how this works
(33:03):
eight six six eight four eight five six ninety nine
or Legal Exchange Show dot com.
Speaker 2 (33:09):
Our last question comes from Rita in Newburyport, mass And
Rita writes, my mom is eighty four and needs to
go into a nursing home. She has mobility issues, but
other than that, she is relatively healthy. She has around
four hundred thousand in the bank and we are wondering
if there's anything that can be done now to try
and protect this money. Are we too late?
Speaker 3 (33:31):
So it sounds like it says needs to go into
a nursing home now, So you're never too late, you know,
So eighty four, it seems like the facts are like
there's a big lift here. It's not too late. So
at this point, you know, I'm guessing that you said
she has just the four hundred thousand no real estate.
Speaker 2 (33:53):
Or she she didn't specify.
Speaker 3 (33:56):
So if she owns a home or not, Now that's
the big issue, right, Yeah, So if there's a home,
the home can be considered non countable. When you're entering
a nursing home, even if you're single, which I suspect
she is at this point, Yes, waidoed or whatnot, it
can be considered non countable as long as the value.
(34:16):
The new rule under the BBBA Act says that the
value of the home can't be more than a million dollars,
even though in mass it was higher than that before
this act. So if it's a million or less and
it's her primary residence and she intends to return home,
we can make the house at least non countable, not
(34:39):
necessarily non leanable, but non countable, so it won't prevent
her from getting on Medicaid, which I think is the goal. Yep.
Then we turn our attention to the four hundred thousand
dollars rights.
Speaker 2 (34:53):
What she can have two grand?
Speaker 3 (34:55):
Yeah, so how do you go from Yeah, so you
got to get that down to two thousand. Do so
you got three hundred and ninety eight thousand dollars to
deal with well in that front, at eighty four, I
would probably look into a medicaid annuity. I think she'll
be fine. You could probably still get seven eight year
(35:17):
term based on her life expectancy. If I had to guess,
I have to look at the tables. But as long
as we buy that medicaid annuity, we can convert that
into an income stream and she will be able to
become eligible for Medicaid.
Speaker 2 (35:33):
So it's no longer considered an asset.
Speaker 3 (35:35):
Right the moment you take that. Let's say there's three
hundred ninety eight thousand dollars, and we divided by eight years,
divided by twelve months, you're going to get a number.
That number is a monthly check that she will be
receiving for the next eight years every month. And because
of that, it converted that asset to an income stream.
(35:58):
And so now as long as that income coming from
that annuity, which is not going to be huge, plus
her Social Security is less than say sixty five or
seven sixty five hundred or seven thousand dollars up, she's
gonna get on Medicaid, okay, and there will be a
payback provision. So in the event she passes away, the
state will be named as the primary beneficiary for the
(36:20):
amount paid on her behalf, so there is a payback,
but it slows the bleeding. Folks. Learn how to protest
for money. You want to protect an IRA and life insurance,
you got to get the guide and learn how it
works eight six six eight four eight five six nine
nine or Legal Exchange Show dot com.
Speaker 2 (36:38):
If you have a question you would like to ask Todd,
visit his website Legal Exchange Show dot com and click
on the ask Tod tab. Maybe I'll be able to
read your question on the air, and hopefully his answer
will stop you from becoming one of his next real
life stories. You've been listening to Todd Lutski, a partner
with the law firm of Cushing and Dolan. I'm Susan Powers,
(36:59):
a financial advisor with the Armstrong Advisory Group. We're going
to take a quick break, but we'll be back with
more on the Legal Exchange with Todd Ludski.
Speaker 1 (37:09):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices,
and the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate
(37:31):
is the beneficiary of your IRA or life insurance cannot
a layer of tax efficiency in nursing home protection while
still allowing your spouse access when it matters. It's about
keeping more of what you've built, working for your loved
ones now and in the years to come. Get your
free copy today by calling eight six six eight four
eight five six nine nine. That's eight six six eight
(37:52):
four eight five six nine nine, or you can request
it online from our website Legal exchange show dot com.
The proceeding was paid for in the musics rest are
solely those of Cushing and Dolan. Cushingan Dolan, d Ormstrong
Advisory may contact you offering legal or investment services. Cushing
and Dolan and Armstrong Advisory do not endorse each other
and are not affiliated. This fall, why just watch the
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Speaker 4 (39:40):
Artificial intelligence is changing the way companies invest in how
markets move. Add to that global trends like international outperformance,
a weakening dollar, and shifting bond yields, and you've got
a complex landscape for investors. This is Mike Armstrong from
the Armstrong Advisory Group and we're hosting two financial seminars
this fall to help you understand what it all means.
Join us at Margaritaville Resort, Cape cod on October ninth,
(40:03):
or at the showcase Super Lucks and Chestnut Hill on
October sixteenth. Call eight hundred three nine three four zero
zero one to reserve your seat. We'll talk about how
diversification and preparation may help you navigate uncertainty. So your
plan is ready, don't miss this chance to get a
clearer picture of your financial future. Register today by calling
eight hundred three nine three four zero zero one. We're
(40:24):
on our website Armstrong Advisory dot com.
Speaker 1 (40:27):
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, intestate 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 six six eight four eight
(40:49):
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 (41:00):
Welcome back into Leal Exchange with Todd Lutsky. I'm Susan Powers,
a financial advisor with the Armstrong Advisory Group, and I'm joined,
of course by Todd Lutsky, a partner with the law
firm of Cushing and Dolan with a master's in taxation.
I have my own real life story for you today,
Todd to talk about. So we have mutual clients. They
(41:20):
are eighty one right, there's they are eighty one and
seventy four. They created two irrevocable trusts with you back
in twenty eleven, so we're well past the five years.
So in their trust they have their home worth around
six twenty five, they each own half, and then they
have two investment accounts worth around three million.
Speaker 3 (41:42):
So is the six twenty five half and half and
a million?
Speaker 2 (41:45):
Two no, no, no twenty five, so it's three in change,
got it go ahead? And then they each have around
one and a half million in their trust investment accounts
okay outside of their trust, very nominal bank accounts. But
then he has an IRA worth around eight hundred and
(42:07):
then she has an IRA worth around three hundred, and
both of their trusts have creditor protection language in there.
They have an only son, so they wanted to divorce
proof and creditor protect. So they were listening to the
show and they sent an email asking, right, well, they
(42:27):
heard you talking about the testamentary trust because they have,
you know, over a million dollars in iras they couldn't
protect in advance, So they wanted to know if they
consider doing this testamentary trust, would they still be able
to maintain the creditor protection language that is in their trust.
(42:49):
The arevocable trust for their son.
Speaker 3 (42:51):
Yeah. Yeah, so this has got a lot of stuff
going on, but the focus is just on the eight
hundred and.
Speaker 2 (42:57):
The three the iras.
Speaker 3 (42:58):
Yeah. So folks, remember they already have the two irrevocable
trusts that have assets in them, in this case a
good amount you know, a six twenty five house and
three million divide by two in these trusts.
Speaker 2 (43:09):
So yeah, a lot of money in the trust.
Speaker 3 (43:11):
You've got about a million eight in each trust in
terms of assets. So great, that's helping from the state,
tax planning, that's probate avoided, that's nursing home protected, that's
creditor controlled for their kids, divorce proofd right. So this
is these are doing all of those things, and I'm
(43:32):
just going to take them innute. I know it's not
part of the question, but just when I look at this,
I say, wow, because we've got all those benefits going on,
and they've had.
Speaker 2 (43:46):
This trust for twenty eleven.
Speaker 3 (43:48):
Wow, and their life hasn't been disrupted. No, not not
calling complaining about how burdensome the trust is or.
Speaker 2 (43:54):
No, and they don't they have I don't. They don't
use the assets in the trust. They've done a little
bit gifting but other than that, they don't rely on.
Speaker 3 (44:02):
But they could, by the way the money say for them.
Speaker 2 (44:05):
Yeah, there was a short time they took the income
out and they decided they didn't really need it anymore.
So yeah, life goes on.
Speaker 3 (44:11):
Yeah, So this is I think a side point, folks,
that these irrevocable trusts are doing all these things. This person,
this family has had it for years and basically their
life goes on unaffected. That for all you folks that
think you lose control and give up stuff, it's it's
not clearly not the case. Okay, So that's all off
the table. But and back then, we didn't have this
(44:32):
option we're about to talk about now. This option came
out in twenty twenty two under the Secure Act. Okay,
so the option is now to say, all right, what
do we do with his eight hundred or her three hundred?
Speaker 2 (44:44):
Actually, if I can interrupt you for one second, just
to kind of show how these trusts change with you
as your life changed. Sure, when they first did it,
their some was younger, he was not married, he wasn't
even thinking about that. They since went back in and
did an amendment with your firm to divorce proof and
to credit or protect so that was added on later on,
(45:06):
so that it's it's adapted with their life that's changed
throughout the years.
Speaker 3 (45:11):
Well, let me do this. Let me explain to you.
This is what I'm about to explain to you is
in this guide how to name your IRA the beneficiary
of your estate, what those rules are surrounding doing that,
How to name your life insurance if you have it.
The beneficiary is your estate coupled with that testamentary trust
(45:32):
which is also described in here, to show how those
two items work together to provide estate, tax planning, nursing
home protection on yes, an IRA, which has always been
hard to do, all without creating adverse income tax consequences
that surround iras. Folks, it's a mouthful. Get the guide
learn how it works eight six six eight four eight
(45:56):
five six nine to nine or Legal Exchange Show dot
com again eight six six eight four eight five six
nine nine or Legal Exchange Show dot Com. All right,
back to the these folks. All right, so we've got
let's take the eight hundred thousand dollars IRA. Looks like
it's husband's. First thing we would do is can we
(46:17):
name the estate the beneficiary? The first rule you need
to look at is how old is this person? Oh,
seventy four, eighty one.
Speaker 2 (46:24):
Eighty one, and in feeling health too, it's.
Speaker 3 (46:27):
Okay, so eighty one years old, as long as you
are seventy three. For the most part, I think there's
going to be some changes that make it seventy five
for younger people for older people. If you are age
seventy three, that is the required beginning date the RBD
(46:47):
in which you must take out minimum distributions from your IRA.
If you've reached that age, then you can name your
estate the beneficiary of the eye. That's important age because
the minimum distributions that will come out when you die,
(47:07):
right when you die will be based on your ghost
life expectancy. So if you died at eighty one, it
will come out over an eighty one year old's life expectancy. Okay,
if you had named a spouse. Now this is a
bigger age difference that I'm used to seeing, But if
you had named the spouse, it would come out over
the spouse's life expectancy. Generally, the age isn't too different,
(47:31):
and even here it's not too different enough to make
the minimum distribution an income tax problem. Okay, so that's great.
Now if you happen to name if you named your
estate thera, I'm sorry. If you named the beneficiar of
your IRA your estate and you were not seventy three
(47:52):
and died before you reached seventy three, yep, then these
IRA distributions will come out over five.
Speaker 2 (48:00):
Years, which wouldn't be so hot if you have a
larger iron.
Speaker 3 (48:03):
Eight hundred thousand dollars coming out over five years could
cause an income tax issue. So that's the income tax play.
But now we know what that rule is. Okay, no
problem here, then we simply put that together. The only
other change that this client's going to need to do
is their existing trusts are fine, that's not going to
be affected. That all the benefits that have been going
(48:24):
on with those existing trusts will remain unaffected. But if
I pull their file, I'm going to find a will
that is a poor overwill that puts assets into their
existing irrevocable trusts when they die, perfectly normal thing to
do until twenty twenty two. And now if they come in,
we can do a new will, and in the new
(48:46):
will there will be a trust built into the will.
That's the testamentary trust that we talk about. Yep. So
that's that new trust that's built into the will. So
now with the IRA not going directly to the spouse,
it will go directly to this will trust. Yes, it
will have to go to probate. It's one item, folks.
It's not a reason enough not to do this when
(49:08):
you compare it to the benefits you get. So now
that IRA hits this will trust change the account and
the language in this trust says income and principle both
better than the trust. They have. Income and principle can
go to the surviving spouse. So now the wife can
(49:29):
continue to enjoy this entire IRA, just like she could
the old way.
Speaker 2 (49:36):
So no limits to what she can take out.
Speaker 3 (49:39):
She can take out the income and the principle, and
the trustee can give it to her. Of course, the
regular income tax rules apply. It's now sheltered for a
state taxes, So in the event wife dies later, this
is tucked away in this trust, sheltered for a state taxes.
And more importantly, again wife's seventy four, maybe in a
year she has a nursing home need. It's protected from
(50:01):
the nursing home. Whereas right away, right away once he
passed no five year waiting period versus if it had
gone to the spouse, it would have created a it
would still be at risk. Yeah and so and lastly
when he when he dies and when she dies, the
assets can be held for the child. Same divorce proof
language as of the other trust folks. Lots you can get.
(50:24):
Lots of benefits come from learning how these iras and
life insurance ideas work coupled with your estate plan. Get
this guide IRA Naming your Estate the Beneficiary eight six
six eight four eight five six ninety nine or Legal
Exchange show dot com and download it there.
Speaker 2 (50:44):
Todd Lutsky from the law firm of Cushing in Doolan,
thank you so much.
Speaker 3 (50:47):
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 today and we'll be
back again next week on the Legal Exchange with Todd Lutskey.
Speaker 1 (51:00):
Every dollar you've saved in retirement accounts and life insurance
tells a story, a story of hard work, smart choices
and the future you envision for your family. One way
to help that story end well is to make a
beneficiary choice that does more. This month's free guide from
Cushing and Dolan IRA and Life Insurance Planning Estate tax
Strategies in Nursing Home Protection explains how naming your estate
(51:22):
is the beneficiary of your IRA or life insurance can
at a layer of tax efficiency in nursing home protection
while still allowing your spouse access when it matters. It's
about keeping more of what you've built, working for your
loved ones now and in the years to come. Get
your free copy today by calling eight six six eight
four eight five six nine nine. That's eight six six
(51:42):
eight four eight five six nine nine, or you can
request it online from our website Legal exchange show dot com.
The proceeding was paid for and the views expressed are
solely those of Cushing and Dolan. Cushing and Dolan and
Ormstrong Advisory may contact you offering legal or investment services.
Cushing and Dolan and Armstrong Advisory do not endorse each
other and are not affiliated.
Speaker 5 (52:00):
Are you wondering where the economy is headed? GDP is growing,
but Tariff's inflation and job numbers are making headlines. Interest rates,
housing costs and policy changes are impacting all of us.
Even AI is changing. How markets move Hi. This is
Chuck Zauta from the Armstrong Advisory Group. We're hosting two
financial seminars this fall to help you make sense of
it all. Join us at Margaritaville Resort, Cape cod on
(52:20):
October ninth, or at the showcase super Lux in Chestnut
Hill on October sixteenth. To reserve your seat, call eight
hundred three nine three for zero zero one. We'll break
down the economic trends, market risks, and smart strategies you
need to plan for retirement and beyond. Diversification. Preparation and
smart decisions are several of the keys to navigating uncertainty.
Registered today by calling eight hundred three nine three for
(52:43):
zero zero one or on our website 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 any Armstrong
guide specific financial, legal or tax advice. Consult your own financial,
tax into state planning advisors before making any investment decisions.
Armstrong make contact you to offer investment advisory services.
Speaker 6 (53:00):
Mark Vonner is the CEO of Veterans Development Corporation. Mark
is a career military man, having served for nearly twenty
years and we are so thrilled to have him and
his company as a key partner and the presenting sponsor of.
Speaker 7 (53:12):
The DAV five K Boston.
Speaker 6 (53:14):
Mark comes from a proud military family, including his father,
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Mark talks often about.
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How serving his country was one of the greatest achievements
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This special community.
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Mark is honored to continue his legacy that his father
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goal for Mark, and it's why he's taken the time
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DAV five K dot Boston.
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